Binance CEO Changpeng “CZ” Zhao has warned the crypto community against self-custody, suggesting that 99% of people who choose to self-custody their crypto will likely lose it one way or another.
CZ has been a supporter of self-custody for years, referring to it as a “fundamental human right,” but has always urged users to “do it right.” He published a “CZ Tips” on self-storage cryptography in February 2020.
During a recent Binance-run Twitter Spaces on Dec. 14, the Binance CEO continued to urge caution for those using self-custody wallets, suggesting that more often than not, security keys are not stored securely, not back up or encrypt correctly, commenting:
“For most people, for 99% of people today, if they are asked to hold cryptocurrency on their own, they will end up losing it.”
CZ reiterated that having cryptocurrency in one’s wallet is “not risk free” and posited that “more people lose money on their own; they lose more cryptocurrency when they hold it on their own than on a centralized exchange.”
And we are live!
Tune in to our Twitter space where @cz_binance is answering all your questions. https://t.co/U0hJOWy74P https://t.co/CDDC20cHgt
—Binance (@binance) December 14, 2022
“Most people can’t back up their security keys; they will lose the device […] They will not have proper encryption for your backup; they will write it down on a piece of paper, someone else will see it and they will steal those funds,” he explained.
The Binance executive also stated that even when self-custodial funds are properly managed, “if a person passes away, they have no way of passing it on to their next of kin,” but custodians like Binance can implement a “standard operating procedure.” ”To solve that problem, he said he.
The Binance executive concluded that “different solutions have different risk profiles” and that it is up to the user to decide what is best for them.
Despite most of Binance’s operations being “centralized”, CZ repeated that the company remained “neutral” in its preference for custody and self-custody solutions, with the CEO stating in an earlier Twitter Space discussion on 14 November that would happily shut down the centralized cryptocurrency exchange if users moved to decentralized alternatives.
“If we can have a way to allow people to keep their own assets in their own custody safely and easily, that 99% of the general population can do, then centralized exchanges won’t exist or probably don’t need to exist, which is great,” said CZ.
Related: Crypto Community Members Discuss Run on Binance Bank
Binance’s latest Twitter feeds come amid a turbulent time for the exchange, which has seen significant withdrawals due to concerns about its balance sheet and potential incoming litigation.
A Dec. 11 report from The Wall Street Journal suggested several red flags in Binance’s proof-of-reserves audit, while a Dec. 13 Reuters report suggested that the US Department of Justice is reaching the bottom line. end of a three-year investigation into Binance. that he may come with criminal charges.
In recent days, a large volume of stablecoin outflows have been pulled from the trading platform, including the $2.2bn outflow of Binance USD (BUSD), Tether (USDT) and USD Coin (USDC) stablecoins during a 24-hour period between December 13 -14, according to data from blockchain intelligence platform Glassnode.
BUSD, USDT, and USDC outputs on Binance over a 24-hour period from December 13-14. Source: Glassnode.
Interestingly, Bitfinex’ed, a longtime Tether critic, shared a screenshot with its 98,000 Twitter followers on Dec. 14 of Binance’s latest offer of 50% APR on USDT staked to its clients, claiming that the The exchange may be looking to shore up its alleged rapidly dwindling stablecoin reserves.
Binance is now offering 50% APR on Tether fraud tokens. Binance seems to be desperately trying to increase deposits.
Early Cloud Mining Scams Now Have 50% APRs on Tether Fraud Tokens!
— Bitfinex’ed Κασσάνδρα (@Bitfinexed) December 14, 2022
In the latest Twitter Space discussion, CZ attributed the weakened market sentiment, particularly with reference to custody solutions, to FTX’s catastrophic slump.
This post Only 1% of People Can Handle Crypto Self-Custody Right Now: Binance CEO
was published first on https://cointelegraph.com/news/only-1-of-people-can-handle-crypto-self-custody-right-now-binance-ceo