Binance denies issuing legal threats over insolvency allegations

Binance has clarified that a widely circulated cease-and-desist notice addressed to an individual alleging exchange insolvency is fake.

On Wednesday, X user Lewsiphur claimed that the world’s largest crypto exchange is insolvent, and warned that this will have a “catastrophic” effect on the market, far worse than the FTX collapse.

Later that day, the user said he received a cease and desist from Binance, attaching an image of a document saying that the exchange would take legal action against him if he did not delete the social media post permanently by 5 p.m. ET.

This image shared by Lewsiphur gained significant traction on the social media platform, prompting many users to repost the allegation.

‘Forgery with active imagination’

“This letter is not from Binance,” the official account for Binance Customer Support wrote in a reply. “It’s a forgery with a very active imagination. Please stay alert to fake documents and misleading information.”

Although the purported cease-and-desist letter instructed Lewsiphur to remove the post by 5 p.m., it remains live as of publication time. In a separate post, the user said he would host a livestream to present evidence supporting his claims, while also promoting an online casino.

Beyond the alleged cease-and-desist order, rumors of Binance’s insolvency have been circulating in recent weeks, often tied to claims that the exchange played a significant role in the October 2025 crash.

During that crash, users reported platform issues such as frozen accounts, failed orders, and deposit and withdrawal problems amid extreme volatility, mainly triggered by macro factors, heavy leverage, and thin liquidity. Binance has repeatedly denied playing a role in the crash, with former CEO Changpeng Zhao calling such accusations “far-fetched” during public Q&A sessions.

The lingering distrust within the crypto community has led some users to call for mass withdrawals from Binance into self-custody wallets, contributing to the ongoing FUD (fear, uncertainty, doubt) surrounding the exchange.

“Some friends in the community have initiated a withdrawal campaign,” said Yi He, co-founder of Binance. “Although the number of assets in Binance addresses has increased after the campaign was launched, I believe that regularly initiating withdrawals from all trading platforms is a very effective stress test.”

The Block has reached out to Binance for further comment on the matter.