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CZ: Crypto Crash, FTX Deal Bad for Binance Ecosystem

  • Binance's CEO said the transaction wasn't preplanned. I just spoke to Sam Bankman-Fried, he wrote. He says the FTX issue will lead to further bitcoin exchange regulation. He also said licencing will be harder globally. CZ emphasised being honest regarding firm reserves. He called for increased transparency, reserve confirmation, and insurance funds.

  • To increase market transparency, the CEO of Binance suggested that other exchanges implement the merkle-tree proof-of-reserves technique. He foresaw Binance using proof-of-reserves in the near future.

10 Nov 2022 By: Divya Behl
CZ: Crypto Crash, FT

Binance CEO CZ said the FTX acquisition announcement-related crypto crash was detrimental for the overall crypto ecosystem.

The crypto market drop brought on by the announcement of the FTX acquisition, according to CZ, CEO of Binance, is detrimental to the industry. CZ claimed that the FTX crash is bad for all participants in the cryptocurrency market in a message distributed to Binance staff. Additionally, he claimed that the FTX scene has seriously undermined consumer confidence in the crypto business.

Anyone in the industry loses out if FTX falls. Don't consider it a "victory for us."

The FTX Deal: Why Is It Bad For The Crypto Economy?

The overarching concept of the acquisition was not preplanned, according to the CEO of Binance. I spoke to Sam Bankman-Fried only a little over 24 hours ago, he wrote in the note. He claims that the FTX problem will lead to more regulatory scrutiny of cryptocurrency exchanges. Additionally, he stated that obtaining a licence will be more challenging globally. CZ also emphasised the significance of being open and truthful about firm reserves. He emphasised the requirement for significantly more openness, confirmation of reserves, and insurance funds.

The CEO of Binance proposed that other exchanges use the merkle-tree proof-of-reserves method to improve industry transparency. He predicted that Binance will soon begin performing proof-of-reserves.

Ignore the Price

CZ advised his staff to avoid concentrating on cryptocurrency price movements at the moment. Let's put our heads down and concentrate on creating items that people will use. Binance intends to fully buy FTX, according to a CZ announcement made amid worries over FTX's liquidity problems. He admits that the Sam Bankman-Fried company was experiencing a severe liquidity crisis and that the acquisition will assist FTX address the crisis.

Following the two founders' announcement about the probable takeover, the cryptocurrency market experienced a carnage of price decreases. The FTX Token (FTT) has experienced a weekly loss of about 81%. FTT's price is currently $4.02, down 25.61% over the previous 24 hours, according to price monitoring site CoinGabbar. Additionally, the cryptocurrency crash resulted in a 10% reduction in Bitcoin (BTC) over the previous day.