Binance CEO Explains Cryptocurrency Manifesto from CZ: 6 “Golden Rules”!

world’s largest cryptocurrency Changpeng Zhao (CZ), founder and CEO of Binance exchange, announced 6 rules that he thinks should be followed for healthy exchanges in the crypto industry.

Binance CEO CZ began his speech by reiterating his recent statements, adding that he will be making further updates:

“A few weeks ago, I published the guiding principles behind my management style to answer questions about how I run Binance.

I also mentioned recently that we will be working with partners to create an industry recovery fund to support healthy businesses that have been unfairly affected by FTX’s blatant scam. More information on this will come soon.”

Binance founder continued his speech as follows:

In light of what happened last week, I felt compelled to extend these principles to the six most important conditions that Binance and all other centralized exchanges must adopt to gain the trust of our users. We cannot allow a few bad guys to tarnish the reputation of this industry while it is still in its infancy.

Our role should be, first and foremost, to protect users. User funds should never be mismanaged and all precautions should be taken to keep user funds safe. Exchange transactions should be transparent and we know Binance should set an example.”

Here are Binance Founder Changpeng Zhao’s 6 Golden Rules for Cryptocurrency Exchanges

CZ explained the rules it set as follows:

1) Avoid risk with user funds

“User funds should never be traded or invested.

We must proactively provide risk alerts for users so they can understand the volatility in crypto.”

2) Never use local coins as collateral

“Native coins are exchange tokens created by the company that operates the exchange.

Native coins play an integral role in the functioning of blockchains and provide strong foundations for the blockchain.

A healthy native coin is the lifeblood of a successful blockchain.

Users need to be able to safely trust the native coin on which their chosen blockchain is based.

It should also have widespread use. BNB An example is the BNB chain, a community-driven, decentralized and censorship-resistant blockchain powered by

3) Share living proofs of assets

“As part of Binance’s ongoing commitment to increasing transparency and trust in the ecosystem, we have begun to share details of key hot and cold wallet addresses.

This is a starting point as we work to create a Merkle tree proof of funds that we will share with the community over the next few weeks.

Our goal is to enable users of our platform to make informed decisions that are aligned with their financial goals.

Other industry players are already providing this transparency and we commend them for their efforts, and we now urge the entire industry to do the same to ensure we can show that a few bad apples do not represent this industry.”

4) Keep strong reserves

“We established the SAFU fund to meet the emergency. There is about $1 billion in the fund today.

Other companies in the industry should commit to doing something similar.”

5) Avoid excessive leverage

“It is unwise to borrow money to finance growth.

There is a lot of volatility in crypto, so Binance’s capital structure is debt-free.

We urge our partners in the industry to be fiscally conservative as well.”

6) Strengthen and Enforce Security Protocols

“Due to the rapidly evolving nature of industry and project protocols, there is a need for the industry to establish better collaboration to agree on standards for the quality of security measures for exchanges and projects.

A strong partnership with law enforcement is required to support investigations and recover stolen funds.

We need a better incubation program to equip new projects with appropriate security measures.

To gain a clearer understanding of the complex asset flow in the blockchain, we must be prepared to invest in on-chain analytics to address weaknesses in existing models. We must address these to ensure transparency.

All exchanges should have strict KYC and AML measures.”

*Not investment advice.