Binance co-founder Changpeng Zhao has denied threatening Elon Musk over the cryptocurrency exchange's investment in SpaceX, saying his remarks about the stake were meant to demonstrate Binance's financial strength rather than signal a planned share sale. The clarification follows speculation about how the exchange would cover reported losses from a $6.3 billion security breach.

In an October 31 post on X, Zhao, widely known as CZ, rejected suggestions that Binance intended to use its SpaceX investment to pressure Musk. “I don't make threats,” Zhao wrote.

Zhao also described SpaceX as a strong long-term investment and praised Musk's technological achievements, noting that Binance's stake represented only a small portion of SpaceX's overall value.

Why CZ Discussed Binance's SpaceX Investment

The dispute followed Musk's public reaction to the reported $6.3 billion security incident. Musk posted “Everyday is Zeroday” and responded with laughing emojis during online discussions about the breach.

Some reactions compared the incident to the collapse of FTX in November 2022, when concerns over customer funds became central to the exchange's downfall. Zhao pushed back against the comparisons and argued that Binance needed support as it worked to recover from the security incident.

During the exchange, Zhao disclosed that Binance had invested $500 million in Musk's acquisition of Twitter, the platform since rebranded as X, and that the investment had since grown to more than $1 billion. The disclosure prompted speculation that Binance might sell its SpaceX holdings to help cover the reported losses, and it put a spotlight on how the exchange's holdings extend beyond digital assets into Musk's companies.

Zhao said the reference to the investment was meant to illustrate Binance's financial resources, not to announce an intention to liquidate the stake. He also urged Musk to take the security incident, and its impact on Binance customers, seriously.

Binance Says It Can Cover the Reported Losses

Binance co-CEO Yi He separately addressed concerns about whether the company could compensate affected customers without selling investments. She said Binance generates enough annual revenue to cover the reported losses associated with the breach.

Yi He also said Binance did not currently need to sell its SpaceX shares to meet its financial obligations. Zhao outlined calculations involving frozen assets, the exchange's Secure Asset Fund for Users (SAFU), an emergency reserve designated to protect customer funds, and the remaining funding requirements. In those calculations, the SpaceX investment was included among Binance's available non-cryptocurrency assets. No planned sale of the stake was identified.

CZ Urges Focus on Suspected North Korean Hackers

Zhao shifted attention toward the suspected perpetrators, urging Musk to prioritize action against the North Korean hackers believed to be responsible, groups that have been linked by researchers and authorities to a series of high-profile cryptocurrency thefts. He reiterated his respect for Musk while rejecting the idea that Binance was seeking a confrontation over its SpaceX shares.

Zhao continued to characterize the SpaceX investment as a valuable long-term holding. Binance's leadership has maintained that the exchange has sufficient financial resources to address the reported breach without selling its SpaceX stake, despite ongoing speculation about how the company will fund its recovery. For now, open questions include how Binance will detail its recovery funding and whether either party provides further information about the breach and its cost.

Source: Hokanews