Binance CEO, Changpeng Zhao has said the crypto crash that followed the announcement that Binance was going to buy FTX is not good for the market. He said the entire ecosystem is going to reap a bad effect.
No Good in an Exchange’s Fall
CZ, as he is widely called, voiced his opinion via a note to his exchange employees. CZ wrote that FTX’s fall is no good news for any crypto industry stakeholder. He equally noted that users’ trust in stability in the industry has taken a big hit with what is going on with the competing crypto exchange.
CZ, thus, cautioned Binance employees not to see it as a win for the company. He emphasized that it serves no one’s interest.
The CEO made clarifications that the recent acquisition move on FTX was not planned before. He stated that he only spoke with the FTX CEO, Sam Bankman-Fried, less than 24 hours before he sent out the note.
CZ also gave employees further heads-up about the latest travail with FTX. He said it will only cause more regulatory investigations of crypto exchanges. It will now become more difficult for exchanges to obtain operating licenses across the world.
Furthermore, CZ emphasized the need to open up on all company reserves and to be transparent about them. He said firms must improve on their transparency, insurance funds, and proof-of-reserve.
CZ recommended that every exchange should abide by the Merkle-tree PoR procedure. This would help them become more transparent for the benefit of the industry. Binance will begin to implement the PoR soon, he said.
CZ shared his opinion that it is important not to focus on crypto prices at this time. He encouraged employees to simply focus on building their products and keep their heads down.
While there are concerns about FTX’s future, CZ has said Binance is planning to acquire it. He said FTX is undergoing huge liquidity trouble and the acquisition is to help it cover the crunch.
Right after the two CEOs confirmed that an acquisition talk was going on, the crypto market descended into chaos. FTT has lost about 83% of its value in the past week. It currently trades at $4.42 as it suffered a 71.61% loss in the last 24 hours.
The general crypto crash also means that Bitcoin fell by some 10% in the past 24 hours.