During the recent AMA, Binance CEO Changpeng Zhao answered some questions regarding his employees’ decision to trade against the users. He also referred to the Terra project as “stupid’.
Recently, Binance CEO Changpeng Zhao has been quite vocal about the recent collapse of the Terra ecosystem. During the latest AMA session, Zhao suggested that some of the employees at Binance suggested trading against their own users during the LUNA crash and making massive profits.
Binance Employees Were Fired for Their Suggestions to Earn Money on Terra Crash
But instead of falling for the lure, the Binance CEO straight away fired those employees. Changpeng Zhao said that it would have been a “pyrrhic victory” chasing gains or profiting from the bets against its own users. He hinted that it would have been immoral after knowing what all was happening in the Terra (LUNA) ecosystem.
The CEO further added that ethics aside, it would have been an unwise decision for Binance as a business entity. Binance CZ said that the employees who suggested it have been immediately fired.
During the recent AMA, CZ also expressed his thought on the whole episode of the Terra collapse. The Binance CEO describes it as “Stupid” but believes that it was not a scam.
CZ believes that the major flaw in the Terra ecosystem was the mechanism that minting more UST would increase its value. Referring to some of the initial problems of the ecosystem design, CZ joking said that those who designed the UST-backing mechanism should have their “head checked”.
CZ seems to be basically against the UST backing mechanism involving volatile asset classes like Bitcoin. When UST failed to hold its peg amid rising selling pressure and falling liquidity, even the BTC reserves failed to hold the peg and provide enough liquidity.
Clarifying the Safety of UST
During the AMA session, CZ also answered one of the questions regarding the safety of UST and why did Binance promote it on its website and other social media accounts. The Binance CEO called this an “incident” and added that sometimes his employees make mistakes.
The Binance team used the wrong logo which also caused some confusion. CZ also added that users should do their due diligence before investing in crypto-related projects.
Someone also questioned why did Binance resume trading for UST and LUNA after the crash. Responding to it, CZ said that he was working in the best interests of his users and couldn’t keep trading halted when other exchanges were allowing it.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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