Binance gets the face of a bank: after the collapse of FTX it defends that it is necessary to regulate cryptocurrencies
We have decided that we will not pursue the possible acquisition of FTX.” It’s been less than a week since those words from Changpeng Zhao, CEO of Binance, but the consequences are shaking the entire cryptocurrency market . Now the executive of the world’s largest exchange has the difficult role of keeping the sector calm, preventing the panic from spreading further.
We Need Regulation
In a recent interview, Zhao explained that “as an industry we need more transparency. We need to work together with regulators around the world to make the industry more robust. Regulators have an important role to play, although we cannot blame any concrete part.
Better known simply as CZ, the Binance CEO is especially active on social media these days . He is one of the most influential people in the crypto world and his vision can be understood as the unofficial position of the sector.
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“Regulation and innovation are not mutually exclusive. Cryptocurrency investors deserve secure access to emerging technologies and practices, including NFTs, stablecoins, gambling, yield mining, and more,” Zhao has long advocated. weather.
Fear of the magnitude of the cascade effect. “With the fall of FTX we will see a cascade effect”, CZ has anticipated. “There will be negative consequences, especially for those who have ties to the FTX ecosystem.”
The fall of FTX is not the first failed project of cryptocurrencies. The collapse of LUNA has been compared to the collapse of Lehman Brothers, although the collapse of FTX is more similar in economic scope. “We have gone back several years. The last few days are a revelation of the problems. The problems have been there for a long time,” explains CZ.
Binance Creates a Recovery Fund
Cryptocurrencies are a decentralized system, but the role of exchangers is essential to understand the crypto sector. And here the responsibility falls on fewer actors. The largest and most active is Binance. Following the collapse of FTX, Binance has announced a recovery fund for projects that may see their economic viability affected by the fall of FTX.
A reserve equivalent to 70,000 million dollars. For the sake of transparency, Binance has disclosed its financial reserve of him. That is, the money reserves on which Binance management is based. In total, Binance has the equivalent of about 70.675 million dollars, distributed in dollars, ETH, Bitcoin, stablecoin and its own tokens.
Almost 40% is based on their own tokens. 22.92% of Binance reserves are in dollars, about 17.6 billion. In established Cryptocurrencies such as Ethereum or Bitcoin they also maintain a strong reserve, with 10.22% and 8.97% respectively.
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But it is striking that a large part of its reservations are based on its own platform. 32.99% are from Binance USD, a dollar-pegged stablecoin. It is worth about 21,000 million dollars. 8.60%, worth about 58 million dollars, is in Binance Coin, which has slightly increased in value in recent days.