Binance CEO: “Two big lessons to learn from the FTX crisis”. Binance CEO Changpeng Zhao (CZ) shared his thoughts on two important lessons to be learned from the problems in FTX.
Zhao said that cryptocurrency companies should not use their own tokens as contracts and should have high security. Binance CEO Changpeng Zhao (CZ) shared his thoughts on two important lessons to be learned from the problems in FTX. Zhao said that cryptocurrency companies should not use their own tokens as contracts and should have high security. In a Twitter message shared on November 8, the CEO of Binance said that there are two great lessons to be learned from this event, following the financial crisis that occurred on the FTX exchange. In addition to this, Zhao announced his intention to buy the FTX exchange.
Binance CEO Changpeng Zhao Describes Lessons to be Learned
Changpeng Zhao said the first lesson is that crypto companies should not use their own tokens as contracts. Zhao said that they never used Binance Coin (BNB) as an example, as a contract. The issue of FTX exchange arose after the statement of Binance’s CEO on Nov. 6. Changpeng Zhao has announced that Binance will sell all FTT, following news that FTX sister company Alameda Research is holding FTX tokens (FTT). Binance has not announced which of its securities it uses as collateral. However, in a Twitter message he shared on November 8, Zhao emphasized that Binance will follow a clear policy and said that it will soon announce what will be used as a contract, and added:
“Banks operate on very small reserves. Cryptocurrency exchanges should not do this.
On the other hand, Zhao said that the second lesson to be learned from the failure of FTX is that crypto companies should not lend money. Instead, Zhao emphasized that companies should choose to maintain their security. In fact, on November 7, FTX started having problems with withdrawals. It turns out that the exchange doesn’t have enough money for employees to cover their own expenses.
Bitcoin price falls below $20,000
The price of Bitcoin (BTC) on the FTX exchange fell from 19,956 on November 7 alone, the day Binance’s CEO announced on Twitter that he will sell all FTT, according to data from the CryptoQuant research platform.
At press time, FTT’s price was trading at $22.14 in the last 24 hours, down 75% to $5.70.