Binance CEO: Crypto investors should not absolve themselves of all responsibility
Changpeng Zhao has said investors are ultimately responsible for their investment decisions
Binance CEO Changpeng Zhao has argued that cryptocurrency investors should take responsibility for their own decisions and not seek to completely apportion blame to others when their investments falter.
During a public ‘Ask Me Anything’ session on Twitter, Zhao was asked whether Binance should reimburse users who have lost money investing in the bankrupt cryptocurrency company FTX.
He replied: “As a user, you also have responsibility — you can’t just blame all of the responsibility to other people. When bad things happen, if you blame all of the responsibility, if it’s always to other people, you will never be successful. You are also always looking at the most responsible person to yourself, which is yourself.”
While Zhao said that Binance would help FTX users, he admitted that he did not want to “create a situation where anything that goes down in the industry, Binance has to pay for it”.
FTX scandal rocks the crypto sector
The Canadian billionaire has been at the centre of the FTX scandal, which has undermined confidence in the cryptocurrency sector.
Earlier this month, a report raised concerns about the relationship between FTX and the quantitative trading firm Alameda Research, both of which were founded by FTX’s then-CEO Sam Bankman-Fried.
In response, Zhao announced that Binance would sell its entire holdings of FTX’s utility token, FTX Token (FTT). This precipitated a stampede of FTX users attempting to withdraw their funds.
Binance initially agreed to acquire FTX in order to protect users. However, after the scale of the crisis facing FTX became clear, Binance announced it would not continue with the acquisition.
FTX filed for bankruptcy in the US state of Delaware on 11 November 2022 and is thought to have more than one million individual creditors. The filing admitted that “questions arose about Mr Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction.”
Having stepped down as CEO, Bankman-Fried is understood to be in The Bahamas and under the supervision of the Bahamian authorities.
Zhao admits that the crypto sector requires regulation
Later on in the AMA, Zhao said that users “should only be using discretionary cash” that they did not need “for a long time”.
He added: “So unless you’re very experienced, very mature, very confident, and can handle the risk, I would recommend most people just hold for this period of time.”
At the same time, the billionaire admitted that the argument that experienced institutional investors, including Binance, are partly responsible for the FTX scandal “was actually somewhat accurate.”
FTX’s collapse has led to increased calls for regulation of the volatile cryptocurrency sector. Speaking at a gathering of G20 leaders in Bali on Monday, Zhao admitted: “We do need some regulations, we do need to do this properly, we do need to do this in a stable way.”