Binance CEO Talks About FTX, Working With Vitalik Buterin, And More
- Binance CEO Changpeng Zhao believes that the collapse of crypto exchange FTX is a cleansing event for the crypto industry and in the long term, investors will understand how it benefitted the space.
- CZ believes that Binance is not liable for making whole all the customers who lost their money in FTX or are unable to withdrawal but added that every crypto firm must share the responsibility to some extent.
- CZ’s exchange will serve as a “Guinea Pig” for Vitalik Buterin’s Proof-of-Reserves protocol that will be implemented in a few weeks time.
Crypto exchange giant Binance CEO Changpeng Zhao recently spoke during an ask-me-anything (AMA) session on Twitter where he answered community questions, including the FTX crisis and the crypto industry’s future.
CZ simply thinks that the FTX disaster is a cleansing event that will end up being a good thing. Even while he made a suggestion that the worst may be gone, at least in terms of the FTX consequences, he still maintains that there will be contagion. Binance CEO stated:
“Short-term it is painful, but I think this is ultimately good for the industry in the long term. Blockchain technology is not going away. The industry is not going away.”
CZ answered the question of whether withdrawals from Binance increased significantly after the FTX collapse. He revealed that his exchange is purely unaffected by the ongoing turmoil and that the “business is usual.” The founder of the world’s biggest crypto exchange stated:
“We published our cold wallet addresses a few days ago. There are many third-party platforms that track them very carefully. There’s no news about significant withdrawals from those addresses.”
One of the more intriguing questions came from a user who said that Binance’s investment in the now-defunct exchange FTX provided it legitimacy and pushed many people to use it. He questioned whether CZ would compensate those who had lost money. In response, CZ made it clear that there is a fine line between responsibility and that it should, particularly in the case of FTX, be shared to some level.
While blaming SBF for his fraudulent and criminal actions, CZ stated:
“FTX users choose to use FTX on their behalf. I don’t want to create a situation where if anything bad happens to the industry, Binance has to pay for it. I want to do what’s fair, and I don’t think that’s fair to our users. When bad things happen, if you only blame other people, you will never be successful.”
CZ cautiously stated that he believes this cascade’s main hit has already occurred. According to him, when something like this occurs, the largest performer typically falls first, followed by a slew of smaller actors.
In spite of this, he predicted that there will be some cascading contagion effects, and that “other players with money on FTX could cause trouble.”
On the other hand, he stressed that stronger and genuine industry participants will grow even stronger and that this would ultimately have a positive cleansing effect in the long term, even though it will be painful in the short term.
Working with Buterin
Binance team and Vitalik Buterin’s team are working together to on implementing a new Proof-of-Reserves protocol developed by the Ethereum co-founder. The protocol is capable of giving investors a clearer picture of the solvency situation of the exchange via a cryptographic-based reserves mechanism for accounting procedures.
“Typically, we need a third-party auditor to be involved. Unfortunately, our number one third party auditor was kinda busy as they are also the auditor for FTX reserves, and you know, there’s a bit of scrutiny there,” Binance CEO said during today’s Twitter Spaces AMA.