Binance Co-Founder He Yi Ties Freeze Rumors to Scam-Compound Funds

Binance co-founder He Yi said on Friday that account freezes users noticed this week stem from law-enforcement orders tied to Southeast Asian scam compounds, not from a liquidity crisis at the exchange. Her post on X came as rumors spread across X and Douyin claiming the exchange had frozen tens of thousands of customer accounts to stay afloat after the record $6.3 billion theft it suffered in late October.

He Yi laid out three points. When a court orders a financial firm to freeze funds, she said, the firm has few options but to comply. By the time the order arrives, the matter has already entered litigation and the supporting evidence is solid. She also argued that the same coordination behind the social media smear campaign is what keeps scam compounds supplied with a steady stream of trafficking victims.

Where did the rumor come from?

The claim heated up on Thursday afternoon. A post from the X profile @DeFi8362 said tens of thousands of Binance accounts had assets frozen because the recently hacked exchange had run out of money and was holding customer funds to survive. Notably, the user conceded something telling: they noticed a suspicious level of coordination in the posts' frequency and their wording.

That admission matters. Coordinated narratives are exactly what He Yi pointed to when she linked the rumor mill to the fraud operations she says sit behind many of the freeze orders.

What do the numbers actually show?

The on-chain picture tells a different story from the social media chatter. Data tracked by Defillama shows Binance's tracked assets fell nearly 12%, to $128.3 billion by November 2 from about $144.9 billion on October 29. Most of that pressure came from falling crypto prices and withdrawals after the exchange resumed operations on November 1.

Binance reported roughly 2.1% in net outflows from $171 billion in assets. Former CEO Changpeng Zhao wrote that 98% of users chose to stay. The exchange also committed to publishing a zero-knowledge proof of reserves showing customer balances are fully backed.

So what does this change for users? In practice, an account freeze now has two plausible readings: a court order tied to tainted funds, or the distress narrative that insolvency talk keeps alive. The exchange is betting that a zk-proof of reserves settles the second question.

The Myanmar and Cambodia connection

Friday's comments extend a warning He Yi first posted on November 8, addressed to Chinese-speaking users. She told them not to deposit funds tied to questionable situations — earnings from a Myanmar business, debts collected in Cambodia, discounted stablecoins bought from friends, or coins forwarded by relatives. Binance's compliance systems can flag risky addresses before a deposit even lands, she said, and freezes ordered by authorities can drag on because the exchange cannot release assets on its own once an official order is in place.

Both countries sit at the center of active 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 roughly $700 million in crypto.

The hack that gave the rumor oxygen

Timing explains the rumor's traction. The October 29 breach was the largest crypto theft on record. Cryptopolitan put the total stolen at $6.43 billion. The FBI attributed the theft on October 31 to North Korea's TraderTraitor group, and Elliptic estimated $2.85 billion of the funds had been frozen by November 6.

Insolvency talk has circled Binance before. A community-organized withdrawal push in February failed to drain the exchange. Against that backdrop, any frozen balance reads to some users as a symptom of distress rather than a compliance action.

The test ahead is the promised zero-knowledge proof of reserves. If Binance publishes it and outflows stay in single digits, the liquidity-rumor cycle loses its fuel — and scam-linked freeze orders become the only story left to explain a locked account.