James Atkins
Editor
Editor
The CEO of Binance, Changpeng Zhao, said he wouldn’t perform the sort of deals Sam Bankman-Fried did with his FTX and Alameda Research firms. During a podcast conversation with Decrypt, CZ made this statement.
While speaking about the Binance-FTX deal. Zhao says that he would never have done such a thing because it’s not in line with Binance’s philosophy. He further explained that Binance believes in building things organically and slowly over time.
Zhao also took a dig at FTX by saying that Binance would never be “pumping and dumping” its users. He was referencing the recent drama surrounding FTX and Alameda Research. Where it was revealed that the companies had been involved in market manipulation.
Alameda just extended a $500 million line of credit to crypto broker Voyager Digital last month. Earlier this week, Voyager Digital filed for Chapter 11 bankruptcy and revealed that Alameda owes it $377 million.
In the past, Binance has been accused of market manipulation, but Zhao has always denied these claims. Binance is currently the world’s largest cryptocurrency exchange by trading volume.
When questioned about Voyager and Alameda, CZ says;
“That was surprising even to me, to be honest. I try not to comment on our competitors or industry peers. But I would never do that type of deal. I would never say, ‘I will invest in your company and then you loan me some money.’ I would just not invest in that company, I’ll keep my money.”
However, CZ didn’t want to talk about some of the other transactions done by Bankman-Fried. Binance wouldn’t do anything like that. He says;
“Personally, for me, and to a large extent for Binance, we like very simple deals. We like deals like, ‘What’s your revenue? What’s your user number?’ We don’t like deals where, ‘Hey, I owe you this money, you pay me back this much money, you invest in me, I give you more money in loans, and then you bail me out.’ Why don’t we just return all the money and go back to zero and talk about net, who owes who money?”
CZ has always said that bad companies should not be saved. He states that;
“Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will.”
Binance is a large cryptocurrency exchange. It has a daily trading volume of more than $12 billion.
The company has been on an expansion spree, recently setting up a crypto bank and announcing its plans to launch a public blockchain. Binance is also one of the most active investors in the blockchain space, with over 30 investments in companies such as Dapp.com and Trust Wallet.
In the interview, Binance’s CZ says that the company has a strict policy of not investing in or rescuing bad projects. He states that;
“We don’t want to put good money after bad. We don’t want to invest in a project that is failing and try to turn it around. We want to invest in good projects with good teams that have a chance to succeed.”
CZ also said that Binance will never undertake the risky deals that FTX does, such as lending tokens to margin traders. He states that Binance is a “risk-averse” company and that they would rather focus on “building things that last”.
These statements show that Binance is a company that is focused on long-term success, not quick profits. They are willing to forgo short-term gains. To ensure that their projects are solid and have a good chance of succeeding in the long run.
What do you think about CZ’s statement? Let us know in the comment section below.
I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.
