Explosive: Binance Founder Denies 60,000 BTC BitMEX Profit Claims from 2020 Market Crash
Singapore, March 15, 2025: In a significant development for the cryptocurrency industry, Binance founder Changpeng Zhao has publicly rejected allegations that his exchange profited from 60,000 Bitcoin through trades on rival platform BitMEX during the notorious market collapse of March 12, 2020. The claims, which resurfaced in recent weeks, allege that Binance entities executed substantial trades on BitMEX that generated massive profits as Bitcoin prices plummeted nearly 50% in a single day. Zhao’s firm denial adds another chapter to the complex narrative surrounding one of cryptocurrency’s most dramatic market events.
Binance Founder Rejects 60,000 BTC Profit Allegations
Changpeng Zhao, commonly known as CZ in crypto circles, issued a detailed statement addressing what he called “baseless allegations” regarding Binance’s trading activities during the March 2020 market crash. The allegations suggest that Binance-connected accounts executed trades on BitMEX that resulted in approximately 60,000 Bitcoin in profits, equivalent to over $3.6 billion at current valuations. Zhao categorically denied these claims, stating that Binance maintained proper separation between exchange operations and any proprietary trading activities. He emphasized that the exchange’s primary focus during the market turmoil was maintaining platform stability and protecting user assets, not engaging in speculative trading on competitor platforms.
The March 12, 2020 crash, often called “Black Thursday” in cryptocurrency circles, saw Bitcoin’s price drop from approximately $7,900 to $3,850 within 24 hours. This unprecedented decline triggered a cascade of liquidations across leveraged trading platforms, with BitMEX experiencing particularly severe issues. During this period, trading volumes surged to record levels, and allegations of improper trading practices began circulating almost immediately. The recent resurfacing of specific profit claims has reignited discussions about market integrity during extreme volatility events.
Understanding the March 2020 Crypto Market Collapse
The COVID-19 pandemic created perfect storm conditions for financial markets worldwide, and cryptocurrency markets proved particularly vulnerable. Several key factors contributed to the dramatic collapse:
- Global liquidity crisis: Traditional markets experienced massive sell-offs as investors sought cash amid pandemic uncertainty
- Leverage unwinding: Over-leveraged positions on platforms like BitMEX created cascading liquidations
- Infrastructure strain: Trading platforms struggled with unprecedented volume and volatility
- Market psychology: Fear and uncertainty drove panic selling across all asset classes
BitMEX, as the dominant leveraged trading platform at the time, faced particular scrutiny. The platform’s insurance fund grew substantially during the crash, leading to questions about how these funds accumulated. Some analysts suggested that the platform’s liquidation engine and trading mechanisms might have created unusual profit opportunities for sophisticated traders who understood the system’s mechanics during extreme stress.
The Technical Mechanics of the Crash
From a technical perspective, the March 2020 crash represented a classic liquidity crisis in a relatively immature market. Bitcoin’s price decline triggered automatic liquidations on leveraged positions, which created selling pressure that drove prices lower, triggering more liquidations in a destructive feedback loop. Platforms with sophisticated trading systems could potentially anticipate these movements, though proving intentional profit-taking from market dysfunction remains challenging. The allegations against Binance suggest the exchange might have used this understanding to generate profits, but Zhao’s denial emphasizes the difficulty of distinguishing between malicious activity and legitimate risk management during unprecedented market conditions.
BitMEX’s Role and Regulatory Context
BitMEX operated differently from traditional exchanges during this period. The platform offered up to 100x leverage on Bitcoin perpetual swaps, creating enormous risk concentration. When prices moved against leveraged positions, BitMEX’s automatic liquidation system would close positions at the bankruptcy price, with remaining value flowing into the platform’s insurance fund. This mechanism came under intense scrutiny following the March 2020 crash, as the insurance fund grew from approximately 2,000 BTC to over 35,000 BTC within days.
| Metric | Pre-Crash (March 11) | Post-Crash (March 13) | Change |
|---|---|---|---|
| Bitcoin Price | $7,900 | $5,500 | -30.4% |
| BitMEX Insurance Fund | ~2,000 BTC | ~35,000 BTC | +1,650% |
| 24h Trading Volume | $32 billion | $75 billion | +134% |
| Open Interest (All Platforms) | $4.2 billion | $2.1 billion | -50% |
Regulatory attention increased significantly following the crash. The U.S. Commodity Futures Trading Commission (CFTC) had already been investigating BitMEX for allegedly allowing U.S. customers to trade on its platform illegally. The March 2020 events added fuel to these investigations, ultimately leading to charges against BitMEX and its founders in October 2020. This regulatory backdrop provides important context for understanding why allegations about trading activities during the crash period continue to surface years later.
Industry Implications and Market Structure Evolution
The allegations and denials surrounding March 2020 trading activities highlight broader concerns about cryptocurrency market structure and transparency. Since 2020, several significant changes have occurred:
- Increased regulatory scrutiny: Exchanges now face stricter oversight in multiple jurisdictions
- Improved risk management: Platforms have implemented circuit breakers and reduced maximum leverage
- Enhanced transparency: Many exchanges now provide more detailed data about liquidations and insurance funds
- Institutional participation: Traditional financial players have entered the space with different operational standards
These developments have made extreme events like the March 2020 crash less likely, though not impossible. The cryptocurrency market’s evolution means that future volatility events will occur within a more mature infrastructure framework. However, questions about potential conflicts of interest when exchanges might trade on competitor platforms remain relevant, particularly as the industry continues to consolidate and major players expand their operations across multiple business lines.
Expert Perspectives on the Allegations
Market structure analysts note that proving specific trading allegations from years ago presents significant challenges. Blockchain analysis can trace transactions between addresses, but connecting those addresses definitively to specific entities requires additional evidence. Furthermore, distinguishing between legitimate market-making activities, risk management operations, and improper profit-seeking depends heavily on intent and internal policies—factors that are rarely transparent to external observers. Most experts agree that while the March 2020 crash revealed structural vulnerabilities, assigning specific responsibility for profits generated during the turmoil requires more concrete evidence than currently appears available.
Conclusion
Changpeng Zhao’s rejection of the 60,000 BTC profit allegations from BitMEX trades during the March 2020 crash underscores the ongoing complexities of cryptocurrency market oversight and transparency. While the dramatic events of Black Thursday exposed significant vulnerabilities in market structure, proving specific improper trading activities remains challenging years later. The cryptocurrency industry has evolved substantially since 2020, with improved risk management and increased regulatory oversight. However, the persistent allegations highlight important questions about market integrity during extreme volatility that continue to resonate as digital asset markets mature. The 60,000 BTC figure, whether accurate or exaggerated, serves as a reminder of the enormous sums at stake during cryptocurrency market crises and the importance of robust, transparent systems to maintain confidence in these rapidly evolving financial markets.
FAQs
Q1: What exactly is Changpeng Zhao denying?
Changpeng Zhao denies allegations that Binance or entities connected to Binance profited by approximately 60,000 Bitcoin through trades executed on the BitMEX platform during the March 12, 2020 cryptocurrency market crash.
Q2: Why is March 12, 2020 significant in cryptocurrency history?
March 12, 2020, known as “Black Thursday,” saw Bitcoin’s price drop nearly 50% in 24 hours, triggering massive liquidations across leveraged trading platforms and exposing vulnerabilities in cryptocurrency market structure during extreme volatility.
Q3: How much would 60,000 Bitcoin be worth today?
At current Bitcoin prices around $60,000, 60,000 Bitcoin would be worth approximately $3.6 billion. During March 2020, when Bitcoin traded around $5,000, the same amount would have been worth about $300 million.
Q4: What was BitMEX’s role in the March 2020 crash?
BitMEX was the dominant leveraged Bitcoin trading platform in March 2020, offering up to 100x leverage. Its automatic liquidation system contributed to cascading sell-offs as falling prices triggered mass liquidations, which then drove prices lower in a destructive cycle.
Q5: Have there been regulatory consequences from the March 2020 events?
Yes, the March 2020 crash contributed to increased regulatory scrutiny of cryptocurrency derivatives trading. In October 2020, U.S. regulators charged BitMEX and its founders with operating an unregistered trading platform and violating anti-money laundering regulations.
Q6: How has cryptocurrency market structure changed since March 2020?
Since March 2020, cryptocurrency exchanges have generally reduced maximum leverage offerings, implemented circuit breakers, improved risk management systems, and faced increased regulatory oversight in multiple jurisdictions, making extreme volatility events less likely though not impossible.
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