CZ says industry is in pain but it’s business as usual at Binance
The FTX fallout hasn't affected Binance, which is working on establishing a "global industry organization" for the crypto space and act as a "guinea pig" for Vitalik Buterin's proposed Proof-of-Reserves protocol.
During an AMA on Twitter Spaces, CZ addressed burning questions from users and community leaders, noting that it’s been business as usual at the exchange.
When asked about the proposed recovery fund aimed at mitigating the effects of FTX losses, CZ said that four or five funds reached out to Binance. The CEO said that the fund is still being worked on but provided no new information.
However, CZ reiterated that the company will do anything in its power to help the industry recover, but won’t try to be a savior at the expense of its own users.
“Binance doesn’t have to pay for everything happening in the industry. I don’t want to categorically commit Binance to solve every problem.”
The ongoing market crisis hasn’t affected any of the companies in Binance’s portfolio. CZ specifically addressed Trust Wallet, a self-custodial crypto wallet acquired by Binance, saying that it was an example of how the companies it acquired remain separate from Binance’s core business.
When it comes to Binance’s core business, CZ reported no adverse effects.
The exchange has experienced a slight increase in withdrawals in the past week, but CZ noted that it was a normal occurrence when cryptocurrency prices drop. If withdrawals were to increase drastically, Binance would not experience any adverse effects either.
If users began withdrawing funds en masse Binance would experience a decrease in reserves but wouldn’t see its business threatened.
Binance is committed to transparency and will continue publishing its reserves to the public. CZ noted that he was ready to make Binance the guinea pig for the Proof-of-Reserve protocol suggested by Vitalik Buterin, the founder of Ethereum, and provide live insight into the exchange’s reserves.
Other Binance-branded exchanges, including Binance Turkey, will also begin publishing their reserves in the near future, CZ said.
He ended the AMA session saying that the ongoing market crisis caused by FTX is beneficial to the industry. Despite the short-term losses many users experienced, the increase in transparency and education about self-custody will make the industry better and more resilient in the long run.
To further strengthen the industry, Binance will be working on establishing a global industry association consisting of the largest players in the crypto space. The association will focus on creating and promoting best practices in the industry and act as a single point of communication for regulators.
CZ noted that Binance won’t be directly involved in running the association and that the role will be left to a separate company that ran similar associations for other industries. Such an organization was reportedly suggested and requested by “multiple regulators,” CZ said.