‘Anomalous’ Altcoin Trading on Binance ‘Just Market Behavior’ Says CEO

Cryptocurrency exchange Binance issued a notice on Sunday acknowledging reports that a handful of altcoins were trading “abnormally” on its platform. The exchange said it would investigate the matter and take appropriate action against “suspicious accounts”.

Binance CEO Changpeng Zhao, also known as “CZ”, later said that the price movements appeared to be “just the behavior of the market”. He explained that an account deposited funds into a trading account, started buying some coins, and others followed suit.

However, he said Binance had temporarily restricted accounts associated with the altcoin trading that had taken place, preventing them from being able to withdraw their funds. The decision was reversed after the company “received numerous complaints on social media” from users in various countries, Zhao said.

In a subsequent tweet, Zhao acknowledged that there is “too much intervention” in maintaining an exchange that operates in an industry centered on the notion of decentralization. There is a “balance” between the appropriate amount of intervention, he said, adding that sometimes it is worth letting similar situations “unfold”.

In its statement, Binance said the trading activity in question on Sunday did not appear to be the result of compromised customer accounts or stolen API keys, but said it would provide updates if more relevant information becomes available.

The clarification comes after one of Binance’s users, who has since had his account suspended, raised concerns last week that an API key had been leaked via intermediary trading platform 3Commas, leading him to lose funds.

The user, who goes by CoinMamba on Twitter, exchanged a series of tweets with Zhao about the missing funds. CoinMamba said “it would be nice” to get a refund, but was mostly upset about the lack of quick action.

Zhao replied that this was not a situation that warranted a refund, adding that it was important for everyone to keep their API key safe.

In a now-deleted Tweet, Zhao also said he was also considering restrictions on CoinMamba’s account in addition to 3Commas, as Binance doesn’t “want to serve people who are unreasonable.”

CoinMamba later claimed that his account was shut down due to statements he made on Twitter. Binance’s customer support team’s Twitter account responded, claiming that CoinMamba’s account was set to “withdrawal-only mode” due to “threats” allegedly made by the user.

3Commas had published a Press release Saturday to answer questions about attacks on their platform and API keys. The post urged users affected by the attackers to file police reports as soon as possible so that funds can be frozen and potentially recovered. He also warned 3Commas users to beware of phishing attacks.

On Sunday, 3Commas also released a statement on Twitter claiming “false rumours” were being spread online by “bad faith actors” who accused the platform of leaking users’ API keys. 3Commas said the rumors were linked to fake screenshots.

Binance, 3Commas and CoinMamba did not respond to immediate requests for comment.