Just In: CZ Says Binance Protects Users Before Shareholders

Binance on Monday made a clarification to its users in the backdrop of a recent disclosure by another top exchange Coinbase. At the time, widespread debates emerged around safety of investor funds. The disclosure suggested that if Coinbase were to go bankrupt, it could treat its customers as ‘unsecured creditors’.

However, Coinbase’s chief financial officer Alesia Haas later said all investor assets are ‘absolutely safe’. “There is a very small tail risk that it still could happen,” she said. The doubts were centered around the possibility that courts could force Coinbase to divert customer money to its creditors.

Haas added at the time that there was no risk of a possible run on Coinbase. Legal protections are clearly stated in the terms of service with the customers, she added.

Binance User Safety

Changpeng Zhao, shortly called CZ, the chief executive officer of Binance, assured investors about safety on the platform. In a recent interview, he said,

“If the trading platform goes bankrupt, users would be refunded first before considering the shareholders. Binance User funds are never mixed with operational funds. In the event of any bankruptcy or similar event, funds would be refunded to users first, before any shareholders.”

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‘Faster’ Binance Chain

CZ said the low validator count of Binance Chain helps the network achieve faster transactions, when asked about its centralized nature. “My limited tech understanding is there is a trade-off between a number of nodes vs performance at this time of our blockchain evolution.”

When asked for investment advice, the Binance CEO said he is not a good example as his portfolio is not diversified.

“Investment wise, I am not a good example. I don’t diversify. I recommend most people to diversify. But for me, I am all in Binance. I am all in crypto, BNB, and BTC. I use my Binance Card everywhere I go.”

In a separate development, Binance had earlier on Monday enabled the direct selling of crypto for fiat through its debit and credit cards.

Anvesh is keen on writing about major announcements around crypto adoption by institutions and popular personalities. Having been associated with the cryptocurrency industry since 2016, his interest in this space helped pivot his journalism career to the blockchain ecosystem. Follow him on Twitter at @AnveshReddyEth and reach out to him at anvesh (at) coingape.com

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