Background

In early October, the crypto market experienced one of its sharpest downturns in months. Billions in leveraged positions were liquidated across major exchanges, creating significant volatility and confusion among traders.

During the chaos, several trading firms, including Wintermute, were reported to have suffered large losses as automated liquidation systems executed trades at abnormal price levels.

The sudden and severe moves sparked a wave of speculation online about the possible causes, with some traders pointing fingers at Binance’s internal risk controls and liquidation engines.

Emergence of the Lawsuit Rumor

Soon after the crash, social media posts began circulating that Wintermute was preparing to take legal action against Binance. The claims suggested that the market maker was seeking compensation for alleged losses linked to the platform’s liquidation mechanisms.

These rumors quickly spread across crypto news outlets and influencer channels, suggesting that multiple firms might be considering similar actions. However, none of these claims were backed by verifiable information or official statements from either company.

Wintermute’s Response

Wintermute’s CEO publicly addressed the situation, making it clear that the firm had no intention of suing Binance. He described the reports as completely false and said that the company maintains a professional relationship with the exchange.

He also criticized the spread of misinformation, stating that baseless rumors only harm the credibility of the crypto industry and create unnecessary panic among investors and partners.

The firm confirmed that while it did experience losses during the market drop, these were part of normal trading risk and did not warrant any legal action.

Impact on the Market

The rumor initially contributed to uncertainty in an already fragile market environment. Some traders reduced exposure to Binance or related assets while waiting for clarification.

After Wintermute’s official denial, the situation stabilized, and attention shifted back to the broader market correction rather than any supposed conflict between the two firms.

Takeaway

The Wintermute vs Binance story highlights how quickly misinformation can move markets. In an industry driven by instant communication and high leverage, unverified claims can trigger waves of panic selling or buying.

For traders and investors, it is a reminder to rely on official announcements and verified data instead of reacting to online speculation. Transpare