Vitalik Buterin will design a “proof-of-reserves” system and utilize Binance as a “guinea pig,” says Changpeng Zhao.
Binance CEO Changpeng “CZ” Zhao has made further views on FTX’s fast demise days after a Twitter storm sparked a bank run.
Zhao discussed FTX’s insolvency on Binance’s Twitter Spaces on Monday. Insolvent FTX filed for Chapter 11 bankruptcy on Friday. Binance showed interest in purchasing Terra but backed out claiming due diligence checks; it subsequently revealed that former CEO Sam Bankman-Fried fraudulently shifted $10 billion in client assets to bail out his trading business Alameda Research after Terra’s crash.
Zhao commented on the issue and urged more industry openness. “Increasing openness is excellent,” he remarked. Following FTX’s bankruptcy, Binance revealed its crypto holdings. The world’s leading exchange aims to prove its balance sheet money. Zhao claimed Ethereum developer Vitalik Buterin agreed to utilize Binance as a “guinea pig” for a “proof-of-reserves” system.
Zhao cited FTX and Alameda’s problematic activities before last week’s crash to reassure listeners that Binance is more cautious. “We don’t take loans or VC,” he remarked. “We don’t take VC money and give it back,” he remarked. All crypto exchanges are “risky companies,” he said.
Zhao warned of probable domino falls. If a company’s assets don’t contain stablecoins, it’s dangerous. Zhao’s warning comes amid fears Crypto.com might face bankruptcy due to its lack of stablecoins. Monday’s “ask me anything” session saw CEO Kris Marszalek deny the claims.
The cryptocurrency market is still analyzing the FTX crisis, which began when Zhao said Binance would sell FTT. Over $400 million worth of crypto was transferred from the exchange over the weekend in a suspected incident. Users can’t access their money while fresh stories and theories circulate about Bankman-empire.
Zhao said on the Spaces call that the unexpected disclosures may make a Netflix thriller. “I couldn’t picture this in a narrative,” he remarked.
Also Read: Elon Musk Says Bitcoin ‘Will Make It,’ But It May Be A Hard Winter’
Wallets