Does the unregulated CEX damage Bitcoin's reputation?

[UchihaSarada]

The huge decline happened in all crypto exchanges, it wasn't only in Binance. If you understand crypto market, the huge decline isn't something very surprising because crypto is very volatile. That's why we can crypto coins are risky because they can freefall at any time although they can also skyrocket massively. However, if you choose the spot market, you still can have a chance to get profits again if you keep holding the Bitcoin. There will be the time for big pumps again in the future. Learn the cycle!!

Cryptocurrency exchanges are like companies in other industries, they have their baby times, golden times and falling times. Even if a centralized exchange does not disappear, scam exit or die, it will not likely be able to maintain its leading position especially the first position in cryptocurrency market forever. After one or two market cycles, a centralized exchange will very likely lose its leading positions to other competitors and usually to newest exchanges.

It happened with Mt.Gox, Poloniex, Bittrex, BitMEX and Binance can become the next centralized exchange loses its leading role in this industry. Binance has performed well since 2017 and this market cycle is its third cycle with this leading role, though the technical crash in October 2025 might have longer lasting consequences on Binance reputation.

I don't think Binance will appear in cryptocurrency exchange graveyard but losing its first position is very possible.

[shinratensei_]

Binance as I know uses a high-leverage model of which resulted in a case like the liquidation that affected Bitcoin. However, we can't dispel the fact that Binance has been one of the leading CEX to have made Bitcoin a global macro asset as of date.

So much is changing and I think it is also for Binance, of whom are doing so much so fast to move towards a more regulated nest structure in this 2026 and it is to note that massive leverage is a core part of how they get their revenue and that's a part that cannot be overlooked if things need to be set right.

There weas liquidation caused by USDe, BNSOL, and WBETH that depegged during that event. They reimbursed the victim who got liquidated but it should be a good warning not to put too much money into an asset that can depeg or even worse using it as a collateral.
One other problem is how there are so many decentralized exchanges living on the blockchain that depends massively on Binance's price feed. This disaster hits hyperliquid hard that long position get liquidated and long position got auto deleveraged through their ADL mechanism.

Everything got leveraged that one simple market abnormalities trigger wide liquidation.

[goldphysicalbitcoin]

You must know that Binance has moved from China several years ago. So, Binance has nothing to do with China regulation.

This alone would be enough to make Binance a non-compliant exchange. China prohibits any exchange from offering unregistered cryptocurrency trading and leveraged contract trading to Chinese residents, regardless of whether the exchange is located in China. Just as Coinbase does not provide KYC verification for Chinese users, Binance follows US law and does not provide KYC verification for US residents. However, Binance is blatantly violating Chinese law, and the Chinese government could even punish Binance for illegal business activities and organizing gambling.

[davis196]

Investors on the X platform are furious! The crash on October 10th last year resulted in $28 billion in liquidations across the network. Binance's system malfunction is undeniably culpable, yet it has failed to provide a convincing investigation report, and the promised compensation is woefully inadequate.

Ironically, Changpeng Zhao (CZ) possesses a net worth of $92 billion, while countless users have lost everything. We cannot help but ask: Is Binance's unregulated, high-leverage casino model building the industry, or is it leeching off Bitcoin?
https://x.com/i/status/2016360586850771228

Are you suggesting that Binance is unregulated? You are wrong about Binance being unregulated, but regulation is not the problem here.
Every business goes thru technical difficulties and malfunctions. Government regulators cannot prevent a company from having malfunctions and making mistakes. If the customers are unhappy, they can sue Binance and CZ, but I have doubts that they can prove in court, that the October 10th Binance crash was deliberate. I'm not a lawyer and I can't dive deep into the legal aspect of the case. How can a centralized crypto exchange crash damage Bitcoin's reputation? The crypto bros aren't that stupid. They can make the distinction between a centralized crypto platform and the BTC blockchain.

[melinoe]

Whether regulated or unregulated
Bitcoin isn't supposed to be used via a centralized exchange.

I don't mind using CEX, but I feel it should be used as a marketplace. It should be a place where you just go to sell your bitcoin for cash if you must. Decentralised P2P services are not very popular, so people use the P2P services of exchanges.
Where I have a problem is when people store their Bitcoins in a centralised exchange. It makes no sense to me. It is so much better to have your bitcoinin your own wallet and only send it to an exchange account when you want to sell.
Wallets like Cake Wallet have features that change your address after every transaction, so you can still maintain a level of anonymity

It should remain an option, but, yeah, the logic behind it is beyond me too. Doing it is leaving a big risk hole behind yourself.

I mean, it's like with smoking. Is it advertised? - Sure. Are we obliged to do it due to that? Not at all.

[AbuBhakar]

Cryptocurrency exchanges are like companies in other industries, they have their baby times, golden times and falling times. Even if a centralized exchange does not disappear, scam exit or die, it will not likely be able to maintain its leading position especially the first position in cryptocurrency market forever. After one or two market cycles, a centralized exchange will very likely lose its leading positions to other competitors and usually to newest exchanges.

It happened with Mt.Gox, Poloniex, Bittrex, BitMEX and Binance can become the next centralized exchange loses its leading role in this industry. Binance has performed well since 2017 and this market cycle is its third cycle with this leading role, though the technical crash in October 2025 might have longer lasting consequences on Binance reputation.

I don't think Binance will appear in cryptocurrency exchange graveyard but losing its first position is very possible.

That's true and some of the exchanges you mentioned no longer exist and there are even others that haven't gotten all the balance left in their exchange accounts. If they still had some BTC left in their accounts back then, it could be worth a lot now, which is disappointing.

It's really normal that the top list exchanges always change because they can't keep the users to stay if the users themselves prefer the new ones with better service, so expect that even though they are popular now, they can be changed.

[Peanutswar]

It does not affect the bitcoin itself but if you tried to look back people already see a bad image of the bitcoin since then because some of them are already using the bitcoin when it comes with the dark web and illegal transactions so the bitcoin already received a bad reputation but imagine right now most of the people utilizing the purpose of the bitcoin so it does not affect the bitcoin itself just the exchange reputation if they created a bad situation with the bitcoin its the binance problem not about bitcoin.

[FortuneFollower]

It does not affect the bitcoin itself but if you tried to look back people already see a bad image of the bitcoin since then because some of them are already using the bitcoin when it comes with the dark web and illegal transactions so the bitcoin already received a bad reputation but imagine right now most of the people utilizing the purpose of the bitcoin so it does not affect the bitcoin itself just the exchange reputation if they created a bad situation with the bitcoin its the binance problem not about bitcoin.

Depends entirely on the case.. But usually it's not BTC problem - I would say it's even more like 99% of cases.

CEXes just echo what the regulations dictate And they are prone to errors/ hacks, and other stuff that goes to damage crypto rep as a whole.. not just BTC.