Binance CEO Changpeng Zhao explained the 6 requirements for crypto money exchanges to be safe.
CZ continued to provide various recommendations to the industry following the FTX collapse.
Changpeng Zhao Listed Six Requirements
The CEO of Binance explained what needs to happen for a cryptocurrency exchange to be safe.
“In light of what happened last week, I felt compelled to expand on these principles with the six most important requirements that Binance and all other centralized exchanges should adopt to ensure the trust of our users. We can’t let a few bad people tarnish the reputation of this industry, which is still in its infancy.”
CZ, who made the statement through a blog post, determined the following principles:
a) Avoid risk with user funds
b) Never use local tokens as collateral
c) Share live evidence of assets
d) Keep reserves strong
f) Avoid excessive leverage
g) Strengthen security protocols
Changpeng Zhao, in the last part of the statement, called on the industry:
“We urge all other central exchanges to adopt these proposals. Because we all have a responsibility to the people who decide to invest their hard-earned money in us. It is our responsibility to prove to regulators and the community that a few bad actors are not emblematic of this industry.”