This summary text is fully AI-generated and may therefore contain errors or be incomplete.
The US Department of Justice (DOJ) has been falsely accused of blaming Binance for causing a liquidity crisis at rival cryptocurrency exchange FTX. The rumor started when a fake account on Twitter, posing as a popular crypto media platform, spread the news. Despite some people pointing out that it was fake, the rumor continued to circulate. In reality, Binance CEO Changpeng Zhao recently entered a settlement deal with the DOJ over allegations of breaking Anti-Money Laundering laws. As part of the deal, Binance agreed to pay $4.3 billion and Zhao stepped down as CEO. The accusations against Binance causing the liquidity crisis at FTX stem from a tweet by Zhao announcing the liquidation of FTX Token holdings due to revelations about risky financial practices at Alameda Research, FTX’s trading firm. This led to investors and traders withdrawing their funds from FTX, causing a liquidity crisis. While the recent tweet claiming the DOJ blamed Binance for the crisis is fake, sentiments of Binance’s involvement in FTX’s collapse do exist in the industry.