Binance CEO, Changpeng “CZ” Zhao has found himself defending his life on social media after a false rumor was spread claiming that he had been “shot” by the Federal Bureau of Investigation (FBI). The unfounded speculation rapidly spread across Chinese messaging platform, WeChat, prompting a response from the Binance CEO. Responding to the rumors in a tweet, CZ denied the rumor and re-emphasized the close collaboration between Binance and the FBI.
The rumor was so widespread that it even prompted CZ to provide some context to his previous tweet, with the number “4” a reference to his post on Jan. 3 where he outlined his goals for 2023, by summarizing another message to “ignore FUD, fake news, attacks, and other distractions.” The first three goals, however, were focused on education, compliance, product, and service.
CZ, who is widely respected in the cryptocurrency industry, was prompted to respond to the baseless rumor on Twitter, where he wrote: “Someone photoshopped this, and it got spread widely on WeChat in china. It says I got shot by the FBI, whom our team work with closely… ♂️ 4.”
Some users took the rumor seriously prompting CZ to respond with an additional tweet stating that he felt sorry for those who believed the fake news. The fake image, which featured a photograph of CZ accompanied by text alleging that he was killed by the FBI, was believed to have been created solely with the aim of manipulating the cryptocurrency markets.
Harry Denley, a Metamask security analyst, likened the event to a false rumor that was circulated about Ethereum co-founder Vitalik Buterin in 2017 of “dying in a car crash.” Denley referred to the rumor about CZ as the “2023 adaptation of attempted market manipulation” and suggested that CZ should provide proof of life with the latest Binance Smart Chain (BSC) block hash.
The false rumor about CZ is not the first time that the cryptocurrency industry has been targeted with false information in an attempt to cause market manipulation. The industry has been prone to such activities in the past, and the latest incidence highlights the need for caution among investors, traders, and stakeholders.
In Oct. 2022, Binance.US hired former FBI special agent BJ Kang to head up its investigation unit, aimed at combating illegal activity on the platform. Kang was once dubbed the most feared man on Wall Street by Reuters after being photographed arresting Bernie Madoff, who was convicted of running the largest Ponzi scheme in history. The hiring of Kang acts as a clear indicator of the high level of trust and confidence placed by Binance and its CEO in the FBI and the expertise of its agents.
The false rumor about CZ has prompted renewed calls for more stringent measures to counter market manipulation in the cryptocurrency industry. The industry is becoming increasingly regulated, and this trend is expected to continue as regulators around the world seek to protect investors and traders.
In more recent news, CZ, along with Binance.US CEO Brian Shroder, were sent a letter on Mar.1 by three United States senators, Elizabeth Warren, Chris Van Hollen, and Roger Marshal, demanding more information regarding Binance’s financials. The senators claimed that the “little information” available in regards to Binance’s financials signifies that the exchange is a “hotbed of illegal financial activity.” This situation is not helped by the unfounded rumors, which only serve to heighten the concerns of investors, stakeholders, and regulators regarding the cryptocurrency industry.
In conclusion, the spread of a false rumor that Binance CEO Changpeng “CZ” Zhao had been shot by the FBI is an example of market manipulation techniques that are becoming increasingly common in the cryptocurrency industry. The industry has been targeted by fake news and rumors in the past, and the need for caution and more effective measures to counter these activities cannot be overemphasized. However, the close working relationship that exists between Binance and the FBI is a clear indication of the high level of trust placed by the cryptocurrency industry in the abilities of law enforcement agencies to counter criminal activities.
