Confidence in centralized exchanges has declined drastically following the FTX saga. As more companies declare bankruptcy hanging on FTX, fear, uncertainty, and doubt hold more ground, and confidence in CEXs seems to be draining. Despite the FUD, Changpeng Zhao, Binance CEO, in a Twitter Interview, clearly stated that he cannot give support for people to disengage from centralized exchanges. “I cannot encourage people to withdraw from centralized exchanges,” he said. He pointed out that educating people about the risk is a better option.
Choosing to interact with non-centralized exchanges doesn’t guarantee funds security, CZ insinuated. There are a lot of other ways people lose their funds, like holding them on their own in hardwares or writing down their seed phrases on paper; “once it gets to a third party, their money is gone.”
The CEO affirmed that he is more suited to run a centralized exchange considering his background in trading and being a developer. However, he said he would move to DeFi next if he weren’t doing Centralized exchange.
Key reasons people choose centralized exchanges include they are not able to hold their crypto security passwords safely themselves and to have a next of kin access their funds when they die, CZ said. “99% of people I would ask to hold their crypto themselves will lose it; they are not able to back up the security, or write it in a piece of paper; someone else will see it and steal the fund.”
Most exchanges in the wake of the FTX event launched Proof of Reserve. This move was aimed at earning the trust and confidence of users; among the exchanges is Binance.
CZ also said the Binance team would be launching new updates to its Proof of Reserve in a couple of weeks. However, as users expect the updates to roll out faster, he said it is taking time considering Binance’s size in terms of cash, asset holdings, wallet structure, and the number of coins it supports, and many wallets are involved. “The team is fully working on it, but we ain’t have specific deadlines, but I do expect over the next couple weeks that you will see more updates.”
The picture for Binance in 2023, CZ said, is just to keep building products that people use and continue to be a stable source of positive energy.
Read also;
List of crypto exchanges with published Proof of Reserve
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