Changpeng Zhaos comments come as billions of dollars of stablecoins continue to flow out of the Binance exchange. 6486 Total views 29 Total shares Listen to article 0:00 News Own this piece of crypto history
Collect this article as NFT Binance CEO Changpeng CZ Zhao has cautioned the crypto community about self-custody, suggesting that 99% of people choosing to take possession of their crypto will likely lose it one way or another.
CZ has been been a supporter of self-custody for years, referring to it as a fundamental human right, but has always urged users to do it right. He published a CZs Tips on self-storing crypto in February 2020.
During a Binance-run Twitter Spaces on Dec. 14, the Binance CEO continued to urge caution for those using self-custody wallets, arguing that more often than not, security keys are not stored securely, backed up or properly encrypted: For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it.
CZ reiterated that holding crypto in ones own wallet is not risk-free and postulated that more people lose money holding their own lose more crypto when theyre holding on their own than on a centralized exchange.
And we’re live!
Tune-in to our Twitter Space where @cz_binance is answering all of your questions. https://t.co/U0hJOWy74P https://t.co/CDDC20cHgt Binance (@binance) December 14, 2022
Most people are not able to back up their security keys; they will lose the device […] They will not have the proper encryption for their backup; they will write it on a piece of paper, someone else will see it, and they will steal those funds, he explained.
The Binance executive also stated that even when self-custody funds are properly managed, if a person passes away, they dont have a way to give to their next of kin, while custodians like Binance can implement a standard operating procedure to solve that problem,.
The Binance executive concluded that different solutions have different risk profiles and that it is up to the user to decide what is best for them.
Despite most of Binances operations being centralized, CZ iterated that the company remained neutral on its preference toward custody and self-custody solutions, having stated in an earlier Twitter Space discussion on Nov. 14 that hed happily shut down the centralized cryptocurrency exchange if users moved to decentralized alternatives.
If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great, CZ said.
Related: Crypto community members discuss bank run on Binance
Binances latest Twitter Spaces event comes amid a turbulent time for the exchange, which has seen significant withdrawals over concerns about its balance sheet and potential incoming litigation.
The Wall Street Journal reported Dec. 11 that there wereseveral red flags in Binances proof-of-reserves audit, while Reuters reported on Dec. 13 that the U.S. Department of Justice is nearing the end of a three-year investigation into Binance and could file criminal charges.
The last few days has seen a high volume of stablecoin outflows withdrawn from the trading platform, including $2.2 billion in outflows of stablecoins Binance USD (BUSD), Tether (USDT) and USD Coin (USDC) over a 24-hour period between Dec. 13-14, according to data from blockchain intelligence platform Glassnode. Outflows of BUSD, USDT and USDC on Binance Over 24 Hour Period Dec. 13-14. Source: Glassnode.
Interestingly, Bitfinexed a long-time Tether critic shared a screenshot to its 98,000 Twitter followers on Dec. 14 of Binance offering 50% APR on staked USDT to its customers, alleging that the exchange may be looking to shore up its allegedly fast dwindling stablecoin reserves.
Binance now offering 50% APR on Tether fraud tokens. Binance appears to be desperately attempting to increase deposits.
First cloud mining scams now 50% APR rates on Tether fraud tokens!
H/t @Tethertothe1 pic.twitter.com/TZ0oPKxvss Bitfinexed ????????? (@Bitfinexed) December 14, 2022
In the latest Twitter Space discussion, CZ attributed the weakened market sentiment particularly with reference to custodial solutions to the catastrophic fall of FTX. #Business #Wallet #Adoption #Changpeng Zhao #Cryptocurrency Exchange #Binance #Decentralized Exchange #Sam Bankman-Fried #FTX Related News How do you assess the value of an NFT? Will FTXs ill wind reach the Global South? Maybe not FTX collapse is Trust Wallet Tokens gain Why did TWT price soar 150% in six days? I knew he was desperate Binance CEO CZ opens up on SBF relationship Proof-of-reserves: Can reserve audits avoid another FTX-like moment?
