Binance CEO Changpeng Zhao (CZ), who was at the center of the FTX collapse, made statements about the lessons to be learned from the process.
As cryptocurrency followers know, in recent days Binance–FTX The events between the two countries dragged the market into a great chaos. Alameda Research’s The process, which started with balance sheet uncertainties, continued until the collapse of the FTX stock market. Binance CEO CZ, who is at the center of these events, gave a speech about the lessons he learned in the process. tweet shared.
in your post asset management and liquidity for crisis moments Underlining the holding issues, CZ continued his statement by stating that Binance never used BNB as collateral and did not borrow money from anyone:
Two big lessons: 1- Never use a token you create as collateral. 2- If you run a crypto business, don’t borrow money. Do not use capital “efficiently”. Have a large reserve.
FTX’s liquidity crisis in the previous period in Terra (LUNA) had lived. The LUNA platform, which did not have sufficient reserves for its positions and could not respond to customers’ withdrawal requests during the crisis, was the beginning of a collapse that affected many exchanges. As CZ stated, crypto companies need to work with more transparent and sustainable structures and be attentive to asset management so that these problems do not recur in the coming days.
Binance was established as a precaution against such situations. Security Fund’of (SAFU) 1 billion dollars disclosed that it contained assets of value.