Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, shared 6 principles that centralized exchanges must follow to remain secure and reliable.
Changpeng Zhao recently published the principles behind his management style, and now, in a post on Binance’s official website on October 15, principles used in the management of centralized exchanges He said he decided to share. The CEO underlined that companies should be transparent and take every precaution to keep customer funds safe, and argued that this still in its infancy should not be allowed to be polluted by a few bad actors.
Avoid Taking Risks with User Funds
CEO with users’ funds purchase and sale or investment He also stated that proactive risk alerts should be provided to users so that they understand the general volatility in the cryptocurrency market.
Never Use Native Tokens as Collateral
Changpeng Zhao said that native tokens play an integral role in running blockchains and provide strong foundations for the blockchain, but not to the native tokens users choose. to be able to trust Said it was important. In addition, local tokens widespread a use of to have underlined the importance of
Share Living Evidence of Assets
Stating that they have started to share the details of their important hot and cold wallets as part of Binance’s ongoing commitment to transparency, the CEO stated that the Merkle Tree funding proof, which will be shared with the community in the next few weeks, will be an important starting point in this area. He also congratulated other companies making similar moves in the industry and urged all exchanges to prove their reserves at this point.
Build Strong Reserves
approx. to meet emergencies. 1 billion dollars Stating that they have established a recovery fund worth of money, the CEO suggested that all players in the sector should undertake to take similar measures.
Avoid Excessive Leverage
Stating that it is not wise to borrow to finance growth, Changpeng Zhao said that there is too much volatility in crypto, so Binance’s capital structure in the clear reported that. He also urged all other companies in the industry to take a similarly conservative view.
Strengthen and Enforce Security Protocols
The CEO suggested that due to the rapidly changing nature of the industry, a coalition should be formed so that standards for the quality of security measures of exchanges and projects can be agreed upon. He also stated that it is very important to invest in adequate and appropriate incubation programs, a strong partnership with law enforcement to track down stolen funds, and on-chain analysis. Another point that Changpeng Zhao draws attention to is KYC (know your customer) and AML (Fight against black money) had protocols.
“We have a responsibility to your investors who put their hard-earned money into us,” the CEO issued a call to all centralized exchanges to join this principle. said.