Binance has denied claims that it hired lawyers to threaten users over insolvency posts, calling viral cease-and-desist letters fake and misleading as rumors spread online. The denial followed social media posts alleging the exchange used legal pressure to force users to delete content questioning its financial health. Screenshots of an alleged legal notice circulated widely on X.
Binance said it never authorized or sent such letters and warned users to remain cautious as fabricated documents gained traction during a period of heightened market anxiety.
The rumors centered on a claim that Binance hired Al Tamimi & Company to issue legal threats against critics discussing insolvency. The exchange said the documents did not come from Binance. Binance Customer Support responded publicly, stating the letter was a forgery and urged users to watch for fake documents and misleading information spreading online.
The alleged notice demanded content removal by a set deadline. Despite this claim, the post remained live at publication time, according to public records.
Binance executives also rejected allegations that they contacted critics or threatened legal action. The claims were described by them as fake because they used fake screenshots as evidence. Co-founder Changpeng Zhao dismissed all accusations that connected Binance to legal threats and claims of insolvency during public discussions.
He described the allegations as both unrealistic and unproven. The exchange confirmed that no actual legal action exists regarding the posts related to insolvency. Binance maintained that the rumors had no credible evidence to support them.
Despite Binance’s denial, the rumors fueled fear within parts of the crypto community. Some users initiated withdrawals, often describing them as stress tests of exchange reserves.
Co-founder Yi He said a withdrawal campaign began among community members. She stated that assets held in Binance addresses increased after the campaign started.
She added that regular withdrawals across platforms can function as stress tests. The comments came as discussions around self-custody gained momentum online.
The October 2025 market crash occurred when insolvency rumors connected Binance to the event. Users experienced account freezes, order failures, and transaction delays during the time of extreme market volatility.
Reports from users described platform disruptions during the crash. Observers linked the turmoil to macro factors, heavy leverage, and thin liquidity across markets.
Binance denied playing any role in the crash. Zhao previously rejected the accusations during public Q&A sessions, calling them far-fetched.
The post that alleged the cease-and-desist letter remained live on X. The user behind it said he would host a livestream to present evidence supporting his claims.
In separate posts, the user also promoted an online casino while reiterating allegations against Binance. No verified evidence accompanied the claims.
The Block reached out to Binance for further comment. The exchange has not reported any change to its public position on the matter.
As misinformation spreads rapidly during market stress, one question remains: how should traders separate verified facts from fabricated screenshots during periods of fear?
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Binance denied issuing legal threats over insolvency claims and labeled the viral cease-and-desist letters as fake. Executives rejected the allegations while misinformation fueled fear and withdrawals. The episode shows how fast false documents spread during market stress, reinforcing the need to verify sources before reacting.