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Changpeng Zhao “CZ” Zhao confirmed that Vitalik Buterin, Ethereum creator, will create a “proof of-reserves protocol” and Binance will be used as a “guinea bird.”
Key TakeawaysBinance CEO Changpeng Zhao (CZ) Zhao reiterated the importance transparency in the cryptocurrency industry after FTX’s fall.
He confirmed that Vitalik Buterin would create a “proof of-reserves protocol” that will be initially tested by Binance.
Zhao explained that Binance operates differently to FTX, but acknowledged that crypto exchanges are “inherently risky businesses.”
Share this articleCZ shared his thoughts on the FTX crash on Monday’s Twitter Spaces conversation with the Binance community. CZ, Binance CEO weighs in on FTX ImplosionDays. After a tweet storm that sparked a bank run against the now-bankrupt FTX Exchange, Changpeng “CZ”, Zhao, Binance CEO has added his thoughts on the company’s rapid decline. Binance hosted a Monday Twitter Spaces conversation where Zhao discussed FTX’s bankruptcy. After it was revealed that the firm was insolvent, FTX filed for Chapter 11 bankruptcy on Friday. Binance expressed interest in purchasing the exchange, but he walked away citing due diligence. Later, it was revealed that former CEO Sam Bankman Fried secretly transferred $10 billion worth customer funds to bailout his trading firm Alameda Research after Terra’s collapse. Zhao reaffirmed the need for greater transparency in the industry, commenting on the matter. He stated that “anything we can do is good” to increase transparency. After FTX’s collapse, Binance posted its crypto holdings in a blog. The world’s largest exchange also announced plans for proof of its balance sheet. Zhao stated that Vitalik Buterin, the creator of Ethereum, had agreed to create a proof-of-reserves protocol that will use Binance to act as a “guinea pig.” Zhao also referred to some of FTX’s questionable practices before last week’s meltdown and reassured listeners that Binance has a more conservative approach. He stated that Binance does not take loans from others and does not invest in VC funds. He said that he was not interested in taking VC investments and then giving the money back to VCs. He did admit that crypto exchanges were “inherently risky businesses.” Zhao also used the opportunity to warn of other potential dominoes to drop. He stated that if a company’s assets don’t include a large amount of stablecoins, it is a sign of trouble. Zhao’s warning comes amid fears that Crypto.com could face insolvency. Some have pointed to the exchange’s low stablecoin holdings. Kris Marszalek, the CEO of the company, dismissed the rumors during an “ask-me anything” discussion Monday. The cryptocurrency industry is still dealing with the FTX incident. It began in earnest when Zhao warned Binance that it would sell its FTT holdings. Recent developments include a suspicious hack that took place on the embattled exchange this weekend. This resulted in more than $400 million in crypto being moved to external wallets. Users are still not able to access their funds despite rumors and theories about how Bankman-Fried managed his empire circulating in the crypto space. Zhao commented on the shocking revelations during the Spaces call. Some believe they could be suitable for a Netflix drama. He said, “If I was writing fiction [novel], this stuff would be impossible to imagine.” Disclosure: The author of this article owned ETH and other crypto assets at the time of writing. Share this article. The information on this website or accessed through it is obtained from independent sources that we believe are accurate and reliable. However, Decentral Media, Inc. does not make any representations or warranties as to the timeliness, accuracy, completeness, or accuracy information on this website or accessed via it. Decentral Media, Inc. does not act as an investment advisor. We do not provide personalized investment advice or any other financial advice. This website’s information is subject to change at any time. The information on this website could become obsolete or incorrect. You may not be able to update any information that is outdated, incomplete or inaccurate. We also reserve the right to change any information that is incorrect, incomplete or outdated. If you need investment advice about an ICO, IEO or other investment, we strongly recommend that you consult a licensed financial advisor or other qualified financial professional. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.See full terms and conditions.Recommended News