In the words of Changpeng Zhao, “For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it.”
In a recent Twitter Space discussion, Changpeng Zhao, the CEO of Binance, stated that investors are more likely to lose their crypto assets by keeping them in private wallets instead of centralized exchanges.
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, backed up or properly encrypted
— LV@NFT (@davidbtc789) December 15, 2022
Zhao claimed that most users cannot create proper backups of their security keys. He reasoned that improper encryption of these keys can allow hackers to steal investors' crypto holdings.
“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don't need to exist.”
According to him, Binance maintains a “neutral” stance on the topic of custody and does not force its users to choose between private wallets or exchanges for storing their crypto.
CZ also blamed the arrest of FTX’s Founder Sam Bankman-Fried for the recent market sentiment.
Furthermore, Zhao claimed that he will “happily” shut down Binance’s operations if users switch to decentralized exchanges.
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Currently, Binance suffers from a high volume of withdrawals caused by “red flags” in its Proof-of-Reserves (PoR) audit and potential legal action from US regulators. Moreover, the exchange’s net outflows over the last seven days have exceeded the $3.66B mark. CZ, however, reassured investors by citing that this development was “business as usual” for the exchange.
