CZ shares the two big lessons from Binance-FTX Saga

Changpeng Zhao – CEO of leading cryptocurrency exchange Binance – outlined two important lessons after the saga between his company and FTX.

In his opinion, crypto exchanges should not use their tokens as collateral, and individuals should never borrow money to run a crypto business.

  • In a recent tweet, the Binance chief said that the company’s security should not consist of the coins it developed and launched. He confirmed that his trading venue had never used BNB for this purpose.
  • Another “big” lesson that Zhao learned was that people should not borrow money to run a crypto business. He added that having a “large reserve” was a key factor when operating such a unit.
  • More Czechoslovakia Think All cryptocurrency exchanges must “Proof of Merkle Tree Reserves.” He said that Binance will begin doing so soon, which could provide “complete transparency”.
  • FTX’s troubles started at the beginning of the week when Binance promised to liquidate all of its holdings from FTT due to the “recent disclosure.” As a result, the token’s valuation has gone south and is currently 75% lower than its pre-announcement figures.
  • Sam Bankman-Fried (SBF) – CEO of FTX – said price dumping should not be an issue because the trading venue has enough funds to cover users’ holdings. “FTX is good, assets are good,” he said at the outset.
  • In a surprising turn of events, SBF has confirmed rumors that Binance will acquire the troubled company. Czechoslovakia also made it clear that his organization would help FTX weather the current “liquidity crunch”.
  • The saga between the two leading entities and the collapse of FTT caused a major panic in the industry and a broad market crash. Bitcoin, for example, has lost more than 10% of its value in the past two days, while its global market value has fallen below $1 trillion.

The CZ post sharing the two big lessons from the Binance-FTX Saga first appeared on CryptoPotato.

Leave a Reply

Your email address will not be published. Required fields are marked *