Search

Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s back’ - TechCrunch

ponjotor.blogspot.com

Binance co-founder and CEO Changpeng Zhao, also known as CZ, commented on the collapse of FTX at TechCrunch Sessions: Crypto 2022. He played down his personal role in the series of events that ultimately led to FTX filing for bankruptcy.

“I still don’t think I have that much influence. I think we were the last straw that broke the camel’s back. It’s not a straw that is really strong,” he told TechCrunch’s Anita Ramaswamy. “There’s a whole bunch of stuff that built up to it. I just may have happened to be the last thing that pushed it.”

He repeated some of the concerns that he has already expressed over the past few days. CZ believes the implosion of FTX is a negative event in the short term, but it will have a positive effect over the long term.

“Many consumers are really hurt financially, they have money stuck on FTX, etc. That’s going to really shake confidence and credibility in the industry,” CZ said. “We will have a lot more education to do. We do need to increase transparency of our businesses — significantly. That itself is actually probably a good thing.”

In many ways, CZ tried to differentiate Binance from FTX, saying that they are very different exchanges by design. But what makes Binance different?

“We still run a profitable business today, we’re okay,” CZ said. “I was very surprised by the amount of money that [FTX] lost, and the amount of customer funds they moved, and the state of things there.”

But Binance is still very dependent on transaction fees on its main crypto exchange. CZ said Binance generates around 90% of its revenue from that activity. And it changes vastly depending on the price of bitcoin.

If the crypto winter lasts longer than expected, Binance could start generating revenue from its other products, such as CoinMarketCap and Trust Wallet.

“When we acquired CoinMarketCap, they were making $3 million per month in ad revenue. We removed all ads so there’s no banners, no pop-ups,” CZ said. “It’s a much cleaner experience. But we can turn that back on. That’ll give us $40 million a year. But we don’t need to today. We have many products we provide for free just to increase the speed of adoption. But if we want to monetize those we could.”

The second concern with Binance is that Binance also has its own token with BNB. FTX’s demise all started with concerns about the value of FTX’s own token FTT.

“Fair concern, but we have proof of reserve and are working with auditors, regulators. We want to be as transparent as possible. We are in a very different situation than FTX,” CZ said.

The industry recovery fund

During the interview, Changpeng Zhao also talked about his plans to launch an industry recovery fund. It sounds like the fund is still very much a work in progress.

“It’s not set in stone. Different numbers have been thrown around. I’ve seen numbers around $2 billion and I’m not sure if that’s enough or too much,” he said.

Almost all projects you hear about in the news, they will have talked to us. Changpeng Zhao

While it sounds like a relief effort, Binance is approaching the fund with a business mindset. “There’s different ways to get compensation. We can get equity or ask for other things,” CZ said. Binance could also help open source projects if they don’t have enough funding. In that case, it would be traditional grants.

Yesterday, Genesis halted customer withdrawals for its institutional client base dealing with Genesis Global Trading. According to their website, they have $2.8 billion in total active loans.

Could Genesis benefit from some help from Binance’s industry recovery fund. “I can’t comment on specific deals. I would assume that there would be NDAs in place but we are looking at a large number of projects. Almost all projects you hear about in the news, they will have talked to us,” CZ said.

Going forward, there is a lot of work to do to rebuild trust. Sure, CZ said Binance has 100% reserve for user assets. But a simple statement like that is no longer enough given FTX’s former CEO Sam Bankman-Fried’s recent statements.

“Publishing a cold wallet address is a short-term temporary method. It doesn’t mean that you’re 100% guarantee. And as we have seen in certain cases, it actually increases the amount of questions when things don’t really add up,” CZ said. “How secure is the wallet infrastructure? What kind of technologies do you use for your custody solution? How do you handle customer disputes? In which situations do you compensate users or not compensate users?”

Of course, he believes Binance is a cutting-edge exchange on all those questions. “And we actually would like to share many of them to make them industry standards — like how we manage wallets. I think we have one of the most secure technologies for managing wallets. We also manage the largest wallets in the world,” he said.

Many people believe FTX’s collapse will lead to more decentralization. In that case, FTX was a single point of failure. Many users lost some money because of that centralization.

But CZ doesn’t necessarily see that as an existential risk. According to him, there will always be centralized entities and decentralized technologies in the crypto industry.

“Today, if you ask everybody in the world who does not have crypto to hold crypto on their own, they are not technically capable of doing that,” he said. “So if we just force people to go from banks directly to DeFi, Most of them will lose their own money because they misplaced it, or they lost their keys, or they don’t know how to encrypt it, etc. That’s not the best way to grow the industry.”

Adblock test (Why?)



Business - Latest - Google News
November 17, 2022 at 10:49PM
https://ift.tt/2HaXE7O

Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s back’ - TechCrunch
Business - Latest - Google News
https://ift.tt/uYXjpWJ


Bagikan Berita Ini

0 Response to "Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s back’ - TechCrunch"

Post a Comment

Powered by Blogger.