The head of the world’s largest crypto exchange Binance said no one could be protected from a “bad player” and called for more regulation of the sector.
At a meeting of business leaders in Bali on Monday following last week’s collapse of Sam Bankman-Fried’s FTX, Changpeng Zhao did not name his former archrival but said the crypto industry “as a whole has a role in protecting consumers.”
“To be honest, if a guy is very good at lying and very good at it . . . just pretend he’s what he’s not [if] someone wants to break the law, the law will not prevent it,” said Zhao, known in the industry as “CZ.”
FTX suffered an $8 billion liquidity crisis after being inundated with withdrawal requests from customers. The $24 billion personal fortune of Bankman-Fried, the 30-year-old head of the exchange, was wiped out and the exchange filed for bankruptcy on Friday, sparking contagion in the crypto sector.
“We need to improve regulatory clarity and regulatory sophistication in the crypto space,” said Zhao, who wore a zebra print shirt and neon yellow sneakers.
He urged the industry to improve transparency, saying that Binance will “lead the way” to provide proof of reserves. Other smaller competitors including Crypto.com, OKX and Deribit have also promised to release proof that they have sufficient reserves to cover their liabilities to customers.
On Sunday, Zhao tweeted that people who own crypto assets should use TrustWallet, Binance’s official crypto wallet where people can send, receive and store cryptocurrencies.
“Self-custody [keeping crypto in your personal digital wallet] is a basic human right. You are free to do so at any time. Just make sure you do it right,” he tweeted.
Investors have been retreating from crypto since the FTX collapse. Bitcoin, the most popular cryptocurrency, is down 22.8 percent over the past week to around $16,000.
Bankman-Fried tweeted on Friday that he had filed for bankruptcy at FTX.
“Once again, I’m really sorry that we ended up here. Hopefully things will find a way to recover,” he said.
https://www.ft.com/content/00105bdd-ab13-4416-b504-ce22bfe7b589 Binance boss says no one can be protected from ‘bad players’