A public dispute erupted between Elon Musk and Binance founder Changpeng Zhao (CZ) on the X platform, following the reported theft of $6.3 billion from wallets belonging to the major cryptocurrency exchange. The situation unfolded as U.S. law enforcement agencies, including the FBI and Secret Service, launched an investigation into the missing funds.
Twitter banter turns to finance
The exchange between Musk and Zhao started when a user posted a meme likening Zhao’s reassurances about Binance’s solvency to Sam Bankman-Fried’s infamous message before FTX’s collapse, which stated: “FTX has enough to cover all client holdings.” Musk responded with a grimacing emoji (😬), drawing public attention and triggering a wave of online jokes targeting Binance’s stability amid the crisis.
CZ responded directly to Musk with a statement that emphasized their past partnership: “Elon, have a lot of respect for you, but bad time to troll. Please stop.” He then shifted the conversation by reminding Musk and the public that Binance invested $500 million to support Musk’s acquisition of Twitter in 2022. That stake has since converted into a holding in SpaceX (SPCX), currently valued at over $1 billion.
Binance uses Musk’s SpaceX shares as proof of solvency
Seeking to reassure users and counter the negative attention, Zhao revealed details about Binance’s current financial buffer after the theft. He outlined that out of the $6.3 billion reportedly taken, stablecoin issuers managed to freeze approximately $3 billion. Another portion is backed by the exchange’s SAFU reserve fund, leaving an estimated shortfall of $2 billion.
Gap is about $2b, we have $1.x billion in SPCX alone. The remaining gap is (still painful, but) manageable. Would appreciate it if you show a little support. Thanks!
Binance’s leadership indicated that the SpaceX stake, which resulted from their investment in Musk’s acquisition of Twitter, now stands as a critical asset. This holding is potentially capable of covering about half of the current deficit.
Identifying the SpaceX shares as a safety net, Binance co-CEO Yi He added to the public discussion with a pointed remark directed at both Zhao and Musk. She wrote: “Reporting to the major shareholder: Our company’s revenue for the year is sufficient to cover the losses, so we do not yet need to sell the SpaceX shares you are bullish on.”
Mini dictionary: SAFU (Secure Asset Fund for Users) is an emergency insurance fund established by Binance in 2018 to protect users’ assets in extreme situations such as major security breaches or large-scale losses.
| Frozen by issuers | Covered by SAFU | SpaceX stake (SPCX) | Remaining gap | Total theft |
|---|---|---|---|---|
| $3 billion | Not specified | $1.x billion | Less than $1 billion | $6.3 billion |
Next steps for Binance
CZ later clarified that the purpose of disclosing the SpaceX stake details was to demonstrate Binance’s financial capacity and assure stakeholders of its stability. He stated that this was meant to show Musk and the wider crypto community that there is less reason for concern about the exchange’s reserves amid the ongoing investigation.
Elon Musk has yet to respond publicly to the comments from Binance’s executives. Meanwhile, Binance indicated that it intends to resume withdrawals within 45 to 48 hours, once it completes its internal checks. The company emphasized that the investment in SpaceX, originally made four years ago, has become a key reserve as it seeks to restore user confidence and stabilize trading activities.
