“I got a cease and desist from Binance,” an X user by the name Lewsiphur, shared a cease and desist notice he allegedly received from Binance for defamation.
“Binance is insolvent, and they are solely responsible for 10/10,” his post said on February 3, 2026. The very next day he received a ‘formal demand’ to immediately take it down.
Fake legal threat targets Binance
Lewsiphur claimed that the world’s largest crypto exchange, Binance, is insolvent and warned that its failure will have a “catastrophic” effect on the market, far worse than the FTX collapse.
The next day he posted a notice from Binance stating legal actions would be taken against him for defamation. The post gained momentum and spread widely. Binance clarified that the circulating notice addressed to the individual alleging exchange insolvency is fake.
“This letter is not from Binance. It’s a forgery with a very active imagination,” the official Binance help desk responded.
The exchange asked their users to stay alert to fake documents and misleading information.
Binance linked to October 2025 crash
Rumors of Binance’s insolvency have been circulating in the headlines for weeks, often tied to claims that the exchange played a significant role in the October 2025 crash.
CEO of crypto exchange OKX, Star Xu, has said that Binance partly bears responsibility for the losses with their promotions.
Binance launched a temporary user acquisition campaign offering 12% APY on USDe, the dollar stablecoin developed by Ethena Labs on the Ethereum blockchain, giving it the same benefits as USDT and USDC.
“When volatility hit, USDe depegged quickly. Cascading liquidations followed, and weaknesses in risk management around assets such as WETH and BNSOL further amplified the crash,” Xu wrote on his X post.
The X user, Lewsiphur, said he would go live to prove his claims. However, there is no verified evidences to support claims of their insolvency.
Binance has repeatedly denied any involvement in the crash, with former CEO Changpeng Zhao or CZ calling these accusations “far-fetched” during public Q&A sessions. However, Bitcoin and other cryptocurrencies have struggled to make any meaningful gains since the crash.
