The CEO of Binance, the largest online exchange for cryptocurrency trading, has said the sector is “going to be fine” and has set up a recovery fund to help people in the industry.
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The CEO of the largest online exchange for cryptocurrency trading said on Wednesday that the sector is “going to be fine,” adding that it has created a recovery fund to help people in the industry.
“We want the strong industry players today to protect the good industry players who may be hurt in the short term,” Binance CEO Changpeng Zhao said during an interview with CNBC’s Dan Murphy at Abu Dhabi Financial Week.
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“That doesn’t mean we can save everyone. If the project is mismanaged on multiple fronts, we won’t be able to help them anyway.”
Zhao said the cryptocurrency has “shown extreme resilience” and said he does not expect the recent turbulence in the industry to cause long-term damage. He did not give an exact figure for the size of the recovery fund.
His comments come just a week after Binance withdrew from the agreement To save the FTX from the exchange of competitors filed for bankruptcy on Friday🇧🇷
the price of bitcoin It falls below $17,000 for the first time since 2020, amid concerns about a so-called “crypto contagion” could lead to the downfall of other big industry namesLike Crypto.com. CEO of the company denied the claims and said the platform was “business as usual”.
“There’s a lot of pain in the short term, but the long term accelerates our efforts to make this industry healthier,” Zhao said.
On Monday, the CEO said Binance had seen a “slight increase in withdrawals” in the past week, but said this was consistent with other dips in the market.
“When prices fall, we see an increase in withdrawals,” Zhao said. “It’s quite normal.”
Regulations will help, but they won’t fix everything
Zhao said he wanted to create an organization that could “build best practices” in the industry known for its lack of regulation🇧🇷
“Regulations should be adapted for this industry,” Zhao said. “Regulation won’t fix it all, it’ll reduce it. It’s important, but we have to have the right expectations,” he said.
Zhao reflected on how there are elements of traditional finance that could help the cryptocurrency market become more regulated and more secure, but practices need to be adapted to be fit for purpose.
The “transparency” and “auditability” aspects of traditional finance may benefit the cryptocurrency industry, but there are “subtle but very important” differences, according to the executive.
“The extreme regulators are more of a traditional mindset, they need to get a cryptocurrency mindset,” he said.
The comments echo those of Ripple CEO Brad Garlinghouse, who said the idea of ​​cryptocurrency being “unregulated” is overblown, but that “transparency builds trust.”
“Crypto has never been sunshine and roses, and as an industry, it needs to mature,” Garlinghouse told CNBC’s “Squawk Box Europe” Wednesday.
Economist Nouriel Roubini took a different position in an interview with Abu Dhabi Financial Week and described cryptocurrency and some of its key players as “totally spoiled ecosystem”.
The New York University professor said there are “seven cryptocurrencies”: “Secret, corrupt, fraudsters, criminals, fraudsters, carnival barkers” and finally, Changpeng Zhao himself.
— CNBC’s Jenny Reid and Ryan Browne contributed to this report.
