Binance founder Changpeng Zhao has stepped in to cool down one of crypto's most popular side hustles: minting and trading meme coins inspired by influencers' social media posts. Basically, CZ told his followers that buying any meme coin based on his tweets is "almost guaranteed" to lead to losses.
CZ said he is into memes, but he does not want people creating meme coins for every random tweet he posts.
It is interesting that this comment came after the incident on Jan. 1, when someone apparently took over a market maker's Binance accounts, used stolen money to buy spot BROCCOLI and then ran a coordinated scheme using futures contracts.
Broccoli is the name of Zhao's dog, which he revealed on X last year, triggering a wave of meme coins. Now, one of them has turned into a problem.
What's happened?
The setup was pretty standard: they bumped up the price of a coin with low liquidity using internal volume, then rode the inflated futures position, and finally exited through some orchestrated trades. With not-so-deep order books and demand that was not entirely real, BROCCOLI turned out to be the ideal choice.
The irony is that CZ's tweets — ranging from crypto jokes to food pics — have long been treated as alpha by the community. And as can be seen in the Broccoli example, Zhao himself is not against shaking up the space in such a manner. But the billionaire founder made it clear this week: he is not giving out financial advice, he is just posting whatever he feels like.
This warning comes at a time when traders are using meme reactions as signals. This time, though, the signal is coming from CZ himself — and it is a stop sign.
Gamza Khanzadaev
Arman Shirinyan
Vladislav Sopov
Alex Dovbnya