TLDR
- Binance says a cease-and-desist letter shared on social media is fake
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The user who posted the letter also alleged Binance’s insolvency
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Yi He confirmed a community-led withdrawal campaign is underway
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Binance maintains financial strength despite rising market rumors
A social media user identified as Lewsiphur posted on X alleging that Binance is facing insolvency. He warned of a market collapse greater than the FTX event. Later, he claimed the exchange sent him a cease-and-desist letter threatening legal action unless he deleted the post.
The image of the alleged legal notice gained wide attention, prompting further reposts and discussion within the crypto community. The user announced plans to host a livestream to present supposed evidence supporting his claims, alongside promotions for an online casino.
Well looks like it’s all unfolding and the truth is coming out
Binance is insolvent and they are solely responsible for 10/10.
The effect this will have on the market will be catastrophic.
This is far worse than the FTX collapse. https://t.co/kD0ZXt8sNn
— Lew (@Lewsiphur) February 3, 2026
Binance responded quickly through its official customer support account. “This letter is not from Binance,” the platform stated.
“It’s a forgery with a very active imagination. Please stay alert to fake documents and misleading information.”
Binance Maintains Position as Rumors Grow
The exchange has dismissed all insolvency allegations, labeling them false and misleading. Binance emphasized that it has not sent any legal warnings or demanded the removal of social media content.
Despite this, speculation continues to spread on social media. The original post remains online, fueling concern among some users about the platform’s stability. These rumors add to ongoing claims tying Binance to platform disruptions during the October 2025 market crash, though no evidence has confirmed any direct link.
Changpeng Zhao, Binance’s former CEO, previously rejected such accusations, calling them unrealistic. Binance has also continued making strategic purchases, including the acquisition of 1,315 BTC to bolster its Secure Asset Fund for Users (SAFU).
Withdrawal Campaign Gains Momentum
Amid the speculation, Binance users have initiated a campaign to withdraw funds from the platform into self-custody wallets. Binance co-founder Yi He acknowledged the trend in a public X post.
“Some friends in the community have initiated a withdrawal campaign,” she wrote.
Yi He added that the total assets held in Binance wallets have increased despite the campaign. She described routine withdrawals as a practical stress test for centralized platforms. She encouraged users to double-check wallet addresses during withdrawals to avoid errors, as funds cannot be recovered once sent on-chain.
These developments come as part of a broader shift in user behavior toward more cautious fund management following major market events.
Community Distrust Persists Despite Reassurances
While the crypto exchange has consistently denied the insolvency rumors and dismissed the legal threat letter as fake, community skepticism remains.
Continued references to past platform issues, combined with public withdrawal activity, indicate that a portion of the crypto market is still wary.
The exchange has reiterated its financial strength and urged users to verify information through official channels.
