Binance co-founder He Yi has dismissed rumors that the exchange is indiscriminately freezing user funds to shore up liquidity, pointing instead to a warning she issued earlier in the week about funds linked to Southeast Asian scam compounds.

In a post on X on Friday, the executive cited law-enforcement orders to explain any actions users may have noticed on their accounts, rather than the talk spreading on social media about a cash crunch at the exchange.

What the freeze rumors claim

A rumor that gained traction on X and the Chinese social media platform Douyin from Thursday afternoon claimed that tens of thousands of Binance customer accounts had assets frozen. According to a post from the @DeFi8362 profile on X, those spreading the narrative said the recently hacked exchange was holding onto customer funds to keep itself afloat after running out of money.

Notably, the account itself conceded that it noticed a suspicious level of coordination in the frequency and wording of the posts.

He Yi's response

In her response to the post, He Yi presented three points, noting that when a court orders a financial firm to freeze funds, the firm has little choice but to comply. She added that by the time such an order reaches a company, the matter has already entered litigation and the evidence supporting it is solid.

The Binance co-founder also highlighted the influence of the Southeast Asian scam compounds she linked the freeze orders to, arguing that the same reach that lets them coordinate social media smear campaigns is what keeps a steady stream of people flowing in to be trafficked.

Reserve data and outflows

The social media rumors are one thing; the exchange's on-chain reserves are another. Reports citing DefiLlama data noted that Binance's tracked assets fell nearly 12% to $128.3 billion by November 2, from about $144.9 billion on October 29.

Most of the pressure on reserves came from falling crypto prices and withdrawals after the exchange returned on November 1, following the $6.3 billion theft it suffered in late October. Binance reported net outflows of about 2.1% from its $171 billion in assets. Former chief Changpeng Zhao (CZ) wrote that 98% of users chose to stay, and the exchange committed to publishing a zero-knowledge proof of reserves demonstrating that customer balances are backed. That proof, once published, will give users a way to check those balances for themselves rather than relying on the claims circulating on social media.

The Myanmar and Cambodia context

Friday's remarks extend a warning He Yi issued on November 8, when she told Chinese-speaking users not to send funds to Binance if they were tied to questionable situations, including earnings from a Myanmar business, debts collected in Cambodia, discounted stablecoins bought from friends, or coins forwarded by relatives.

She said Binance's compliance systems can flag risky addresses before a deposit lands, and that freezes ordered by authorities can drag on because the exchange cannot release assets subject to an official order on its own. For ordinary users, the practical takeaway is that funds can be caught by a flag or a court order even when the transfer itself looks routine — the scenario her warning was designed to head off.

Both countries feature in fraud investigations. A September 2026 FinCEN review examined $12.7 billion in activity tied to Southeast Asian investment scams. In April, the US Justice Department announced charges over a fraud compound in Myanmar and said it had restrained about $700 million in crypto.

Timing gives the rumor oxygen

The October 29 breach was the largest crypto theft on record. Cryptopolitan put the total stolen at $6.43 billion, a theft the FBI attributed on October 31 to North Korea's TraderTraitor group, with Elliptic estimating that $2.85 billion had been frozen by November 6.

Insolvency talk has dogged the exchange before; a community withdrawal push in February failed to drain it, as Cryptopolitan reported. Against that backdrop, any frozen balance can read to some users as a symptom of distress.