Binance, the world’s largest crypto exchange, has refuted claims that it has been dumping some Solana in the wake of the latest market downturn. The rumours emanated from users who saw Arkham Intelligence’s report on February 24 that showed Binance transferred roughly 103,570 SOL and 25,000 ETH to the market maker Wintermute.
The transactions from Binance also coincided with a significant market crash on February 25, which fuelled FUD among investors. Crypto analysts like Marty Party and Jacob King alleged that the cryptocurrency exchange was selling off its Solana and Ethereum holdings for various reasons.
The digital asset exchange argued that its market surveillance program, designed to detect and prevent market manipulation, ensured a fair trading environment for all users. The firm also maintained there was no conclusive evidence to support the claims, and the rumours seemed to stem from misinterpretation of the data.
Binance refutes rumours of selling Solana amid market crash
Crypto analyst Marty Party had alleged that Binance was dumping its Solana for various reasons. Founder and CEO of Whale Wire, Jacob King, also referred to transaction receipts from Binance and alleged that the firm was mass dumping Ethereum.
The rumours were also fueled by the February 25 market crash, which saw Bitcoin plummet below $90,000, leading to over $1 billion in liquidations.
Binance addressed the speculation on February 26 and denied the rumours on social media of selling Solana and Ethereum holdings. The crypto exchange argued that it only functions as a marketplace that facilitates transactions, with no control over users’ trading decisions, including those of market makers.
“Binance hasn’t dumped or sold large amounts of tokens as some tweets have misunderstood. As an exchange, we simply help users match trades and we have no visibility into our users’ decisions, including market makers who may move their assets according to their strategies.”
– Binance Customer Support.
The cryptocurrency exchange urged users against drawing conclusions based on transaction screenshots. Arkham Intelligence revealed data on Feb 24 that showed market makers made significant transactions from Binance hot wallets. The market maker Wintermute withdrew over 100,000 SOL ($16.32 million) and 25,000 ETH ($80 million) from Binance.
Binance says transactions from market makers were for liquidity support
Crypto analyst Solid Intel highlighted that the withdrawals were due to the market maker removing liquidity or buying SOL from the order books. The withdrawals also happened days ahead of Solana’s $2 billion token unlock, which is scheduled to release over 11.2 million SOL tokens into circulation on March 1.
The company said the transactions caused speculations that it was selling its token holdings in over-the-counter (OTC) trades. Binance acknowledged that similar market makers operate based on their own strategies unrelated to the world’s largest exchange.
The firm highlighted the importance of recognizing trading strategies that could be misinterpreted as market manipulation. Binance stated that users should “learn to recognize FUD” and also encouraged the community to learn more about what market makers do.
Market makers work to provide liquidity in the crypto market by placing buy and sell orders, which tighten bid-ask spreads and enable smoother trading activities. The market makers play a crucial role in absorbing large orders, reducing price volatility, and contributing to market stability. Binance argued that exchanges often partner with market makers by providing them with tokens as incentives to continuously boost their inventory.
The crypto exchange highlighted that despite blockchain’s transparency, it was important not to jump to conclusions about screenshots of transactions. Binance also encouraged the community to fully understand more about the role of an exchange as they always encourage users to do their own research.
Crypto analyst Artchick.eth also iteratedthat $7.5 billion of Solana unlocks was coming over the next three months. The analyst also said the majority of the SOL was purchased from FTX auctions at $64 by Galaxy Digital, Pantera Capital, and Figure. Crypto trader RunnerXBT argued that it was a “dangerous” time to purchase Solana. The trader highlighted that Galaxy Digital, Pantera Capital and Figure would gain $3 billion, $1 billion, and $150 million, respectively, in unrealized profits once their SOL was unlocked.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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