Does the unregulated CEX damage Bitcoin's reputation?

[SilverCryptoBullet]

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?

What will happen with me if you scammed other people and will I be considered as a scammer too?

No, life does not work like this. Bitcoin is Bitcoin, and CZ is CZ, Binance is Binance, other exchanges are themselves. If they scammed, it's their responsibility and they will get bad reputation while Bitcoin is just a decentralized blockchain, transactions can be confirmed without censorship, and it can not be affected by any centralized exchanges. Bitcoin can not scam any people, it's just there and available for use by everyone.

If CZ did something wrong, find him, sue him, and wait for legal win in order to receive compensation from him, that's it. You can not blame your loss on Bitcoin while you stored your bitcoin on a scam exchange and they pulled their scam exit for example.

[Cryptomultiplier]

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.

[Ambatman]

I'm curious. How is it supposed to be used? P2P? As a personal user of Bitcoin, how many times have you been able to buy what you needed in the real world via P2p? We all have to face the reality that fiat is king in our countries and that Bitcoin does not YET have the level of adoption that could make us circumvent fiat or even stablecoins. More so, the volatility of Bitcoin makes it difficult for anyone to depend solely on it despite how much we hype it.

I don't know if you understand why Bitcoin was created
But it was made to have a money that doesn't require a third party
So if you need a third party why not just settle with Fiat.

Imagine an asset that could lose 10% of its value in a few hours. You definitely need a sort of hedge to protect the investor. This is why we all cannot depend solely on p2p.

So centralized exchange helps in reducing the volatility. Wow.
Like I said if Bitcoin isn't for you there are options like Fiat and gold.
Everything boils down to your preference.

[snowpega]

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

I remember that day. It was like a disaster that ate a lot of users' portfolios literally in no time, and the worst part was that no one even got a little chance to make them safe by making a selling order so that they would be able to make them safe from more worse condition. And you are right; this is still unclear. Like, what was the reason for that dump? Like, was that a play in a game of manipulation or some other reason?

Well, anyway, who cares about that matter? I mean, expecting something good from big hands or regulators in favour of those users who lost their well-earned funds is equal to expecting something unexpected. They have money, they have market control, and they are making themselves rich by making this kind of liquidation and manipulation in their favour. This is my point of view on this; DYOR!

[asriloni]

Is Binance's unregulated, high-leverage casino model building the industry, or is it leeching off Bitcoin?

Binance is a regulated exchange site. It has been granted ADGM license to operated globally. Beside that to think they're leeching off Bitcoin is just pure your assumption. They helped Bitcoin adoption a lot by promoting it ever since they were still a small entity. Don't you see how CZ keeps shlling to always buy Bitcoin when it's dipping? although i also aware his company is also gonna be benefited from the bull trend of Bitcoin, but it's what it's.

[bitbollo]

The nature itself of bitcoin could lead to any kind of use and adoption, I would call as "neutral" item.
Plus you can "shape" as you prefer, by using some of intrinsinc functions.

Unregulated CEX are always presents and even a regulated one MtGox has created crazy troubles to the industry.
Some big collapse in the past have clearly an impact to the price of coins. I would not focus too much.
People that understand bitcoin would use CEX with any possible caution. This cannot be enough to avoid a lose or some generic issue...
Of course no one want deal with these options but we have not yet a full bitcoin economy but only proxies.

[Patikno]

If we discuss whether it has an impact on Bitcoin's reputation, I don't think so because Bitcoin's reputation doesn't depend on them.. but it's just that when CEX faces problems, such as what happened in the FTX case some time ago, it causes the Bitcoin market to drop badly and causes a decrease in the confidence of some investors, especially from retail investors who don't fully understand the difference between Bitcoin and CEX. So indirectly, the problems that occur at CEX can disrupt the Bitcoin market.

If that is considered "damaging Bitcoin reputation", then I also disagree. Bitcoin reputation would only be damaged if the problem occurred within Bitcoin itself. For example, like a hack of the Bitcoin network, but I am highly skeptical that Bitcoin could be hacked, and I think it is impossible. Therefore, we can conclude that Bitcoin reputation cannot be damaged by any external party. Cases like the OP mentioned are simply about "impact", meaning market volatility can affect Bitcoin price, not the Bitcoin reputation. I am also certain that the impact wouldn't be felt for long, as people trust in Bitcoin is already strong. Only people who don't understand Bitcoin would immediately withdraw their money when an incident like the OP mentioned occurs, and those people are probably like those you mentioned.

[Mia Chloe]

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.

I don't believe there's really a thing like unregulated CEX because literally all CEX remit back to the government. A topic I was expecting to see is how bitcoin is actually becoming more and more centralized. The whole thing is actually becoming worse ever since more countries and governments began showing interest.

Currently is seems like price is stuck in a never ending bearish trend. Fundamentals are stopping an upward push making every bull seem orchestrated.

[Miles2006]

The practice is a continuous one, next time people will still make use of an exchange to store bitcoin when they’re fully aware about the records. Nothing is trusted not minding the regulation instead the community might just desire to do something funny and those who trust exchange enough will regret because they refuse to prioritize privacy, it’s becoming too obvious, anyone who understands the basic will know exchange is not a place to store rather buy and sell is more suitable, the scam pattern using exchange is not a threat to Bitcoin reputation.

[Ivystar5]

CZ is more like someone who puts Bitcoin in front of BNB while selling BNB only, definitely leaching off bitcoin but yet it's not like CZ owes anyone an explanation on what happened on finance platform during the crash, the Finance application probably was not able to handle the panic that could be an excuse that no one will be able to sue or make case against but they are making it look like of people file case against them they will be victim but of course not they are immuned but however, we all know the risk on the centralised exchange so if you lost whatever due to the glitch of the platform I think you should know that's one of the risk in using them.

[EL MOHA]

I don't believe there's really a thing like unregulated CEX because literally all CEX remit back to the government. A topic I was expecting to see is how bitcoin is actually becoming more and more centralized. The whole thing is actually becoming worse ever since more countries and governments began showing interest.

Currently is seems like price is stuck in a never ending bearish trend. Fundamentals are stopping an upward push making every bull seem orchestrated.

Yeah most exchanges must be actually regulated before they can actually operate freely in a country but not all are actually regulated and that’s why we have some exchanges which are actually not allowed in other countries.

But seriously the damage done by centralized exchanges is just growing everyday but I don’t think bitcoin is actually been centralized even though it’s the intention of this platforms and government too. I will only accept that there is centralization when the bitcoin network (miners to be precise) actually starts to censor transactions.

[Z-tight]

Nothing that happens in centralized exchanges should affect BTC's reputation to anyone who understands the network. BTC is decentralized, it is not like cex answer or report to it, they run their business independently. So any praise or damage should rest on them. That's why a cex could go bankrupt, collapse and go out of business, but it'd only affect BTC's price temporarily and in a short time the price will rise up again.

However, as for the October 10 crash of last year, it is possible that it was not caused only by Binance's technical vulnerabilities. Take note that Donald Trump also slapped a 100% tariff on Chinese goods on that same day, so that report also played a part in the crash too, plus the other global situations at the time.

[Sanitough]

Binance established as a solid crypto exchange in time that exchange suddenly bankrupt while trapping users funds. Binance insurance feature that secure users funds in event of system exploit is a good assurance for funds safety.

Overall, Binance is very helpful for crypto industry.

This situation is quite different though, because this wasn’t a hack, it was a glitch, and it directly caused selling pressure. People panicked, positions got affected, and a lot of users ended up losing money because of that reaction. For some, this might look like a normal issue, but Binance is a huge exchange moving billions in volume, so this kind of incident should really be reviewed by independent experts to see what actually happened and whether they benefited from it in any way.

What I said is the feature which Binance use to establish their reputation despite having a negativity on crypto exchange back then.

I’m not comparing this feature to the current issue raise by the OP. I only state one of the contribution given by Binance to make user trust them. This helps the crypto industry to achieve adoption since newbie have a reliable platform back then. Now, most of the CEX already follow the Binance standards.

No question about that, they insured their own funds and we’ve already seen that system work as intended. And yes, this is a separate issue since users didn’t lose funds because of a hack or a system failure.

The real problem here is the panic it caused. Some people probably reacted that way because they’re still new to the space and don’t fully trust Bitcoin yet, even though we’ve already seen massive ups and downs before. Still, Binance has to address this properly and explain what really happened and make the regulators judge whether they should compensate or not.

[kawetsriyanto]

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.

Sorry, what's happening on October 10th? Bitcoin crashed? It isn't caused by Binance, Bitcoin crashed because of many factors. The issues around the world, many people sold their Bitcoin, and many other things can be the triggers. Bianance is just a media (place) for selling/buying Bitcoin. Why blame them?

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?

People lost their money because they didn't really understand crypto market. They probably used the wrong approach, so they got losses. By the way, it makes sense if CZ can be rich because he is Binance owner. Binance is number 1 CEX in the world, almost all people have account there. IMO, CZ becomes rich because of running his business, it isn't caused by the lose money of people.

I'm not sure why you stated Binance has a casino model? It is totally different with casinos. 

[coupable]

Centralized exchange as a whole are not best for the use of bitcoin because of the intention of having privacy secure, because there's no benefits that using a decentralized coins should be found under a custodial means making it more prone for attack and control under regulated authority, maybe we could see more to the reasons why we keep seeing peoples fund being confiscated, because they are controlled by the centralized exchange instead of the rightful owner,

In a global system based on centralized powers, it's almost impossible to use bitcoin or anything outside this circle. Bitcoin is still not a recognied asset in majority of countries and stores don't support bitcoinj for daily use. So it is mandatory to go through a centralized channel to move funds from crypto to fiat and from fiat to crypto.
I read opinions that bitcoin is not supposed to be used in a centralized service, but it is designed to be used in different ways like any type of money or as a commodity.

[X-ray]

This is why yall need to do P2P. Centralized exchange got too much control and they can manipulate the price, as for now exchange like Binance got too much control of the market with them constantly introducing shitcoin listing everyday.

It sucks the crypto market dry with all those shitcoins and could be one of the reason why bitcoin can't sustain its rally at All Time High.

Nothing that happens in centralized exchanges should affect BTC's reputation to anyone who understands the network. BTC is decentralized, it is not like cex answer or report to it, they run their business independently. So any praise or damage should rest on them. That's why a cex could go bankrupt, collapse and go out of business, but it'd only affect BTC's price temporarily and in a short time the price will rise up again.

However, as for the October 10 crash of last year, it is possible that it was not caused only by Binance's technical vulnerabilities. Take note that Donald Trump also slapped a 100% tariff on Chinese goods on that same day, so that report also played a part in the crash too, plus the other global situations at the time.

As much as I want to say that is right and bitcoin is independent to those centralized exchanges, the average people still gonna label bitcoin bad if collapse like mt.gox is happening again.

I always remembered how people trying to fud bitcoin after the collapse of FTX. Centralized power is always not a good news if they somehow collapsed.

[Publictalk792]

Hugely large forced selling events have led to huge anger due to feeling that users are being hurt by fact that during very shaky market, site breaks, and owners are extremely rich. When people cannot spend their money due to some failure of system, trading site has to pay back losses and many people think that small coupons cannot cover billions of money lost. This situation brings out casino way in which risky trading is harmful to normal users and some may feel that sites are taking advantage of business instead of helping the business. They will continue to leave these large trading sites and move their money to private systems, which they have greater power to control without honest checkup reports and better levels of working trust. This crisis shows that group will keep losing its trust until trading sites are more worried with protecting its customers than with taking easy money on high risk betting.

[goldphysicalbitcoin]

Sorry, what's happening on October 10th? Bitcoin crashed? It isn't caused by Binance, Bitcoin crashed because of many factors. The issues around the world, many people sold their Bitcoin, and many other things can be the triggers. Bianance is just a media (place) for selling/buying Bitcoin. Why blame them?

People lost their money because they didn't really understand crypto market. They probably used the wrong approach, so they got losses. By the way, it makes sense if CZ can be rich because he is Binance owner. Binance is number 1 CEX in the world, almost all people have account there. IMO, CZ becomes rich because of running his business, it isn't caused by the lose money of people.

I'm not sure why you stated Binance has a casino model? It is totally different with casinos.  

On October 10, 2025, Binance and the entire crypto market experienced the largest "flash crash" and liquidation event in history.

Market Crash: Bitcoin plummeted from a high of $122,000 to below $105,000 within hours, while many altcoins saw declines exceeding 80%（For example, ATOM plummeted from $4 to $0.001 in an instant, causing all leveraged users of the token to lose all their funds.）.
Multiple users reported experiencing issues such as being unable to log in, deposit margin, or close positions during this period.

CEXs like OKX and Bybit, relying on Binance’s price oracle, mirrored the crash. Conversely, Coinbase, Binance US, and the decentralized Hyperliquid remained stable, avoiding the extreme volatility.
Liquidation Scale: Approximately $19 billion to $40 billion in leveraged positions were forcibly liquidated across the network overnight.

Public Sentiment: The event was widely described by the community as "CZ (Changpeng Zhao) declaring war on retail investors"—an extreme deleveraging action that resulted in total asset loss for a massive number of investors.

Furthermore, Binance profits from high-leverage trading (up to 125x), explicitly disregarding laws in China, its primary market, where such derivatives are banned. Unlike compliant exchanges like Coinbase, Binance knowingly facilitates these prohibited activities for Chinese citizens.

[Call_Me_Guru]

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.

Furious investors means nothing, it is not the first tiem they are furious and nothing happened. Binance system malfunction during a major market crash is suspecious but who is going to fight for the masses when the regulation is the weakest?

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?

It is not new, nearly everything electronic and online trading-linked platforms are fraudulent in many ways to cheap are present. This explains why their owners are extremely rich, like CZ. The good part for exchanges is that they are highly underregulated, they can do many things and get away with it, no serious oversight.

Those customers who are slightly shielded from this are the customers from the countries that compulsory a dedicated service for their residents, like US where we have binance.US. They are well-regulated and regulators do the thorough follow-up to ensure everyone is being treated fairly. Many of them have profited so much on bitcoin creation to gain insane wealth.

[kawetsriyanto]

On October 10, 2025, Binance and the entire crypto market experienced the largest "flash crash" and liquidation event in history.
Market Crash: Bitcoin plummeted from a high of $122,000 to below $105,000 within hours, while many altcoins saw declines exceeding 80%（For example, ATOM plummeted from $4 to $0.001 in an instant, causing all leveraged users of the token to lose all their funds.）.

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!!

Multiple users reported experiencing issues such as being unable to log in, deposit margin, or close positions during this period.

I'm not sure what they were experiencing, however sometimes there is maintenance in an exchange. So, we may have a problem with log in or deposit funds. However, it will be no problem if the team can solve the problems and handle the reports in a proper way.

Public Sentiment: The event was widely described by the community as "CZ (Changpeng Zhao) declaring war on retail investors"—an extreme deleveraging action that resulted in total asset loss for a massive number of investors.

How can people conclude that CZ declared the war? I think it is something impossible. People just misunderstood!

Furthermore, Binance profits from high-leverage trading (up to 125x), explicitly disregarding laws in China, its primary market, where such derivatives are banned. Unlike compliant exchanges like Coinbase, Binance knowingly facilitates these prohibited activities for Chinese citizens.

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

Please take a look: https://en.wikipedia.org/wiki/Binance