Ethereum's Vitalik Buterin Is Planning This Cryptocurrency Safeguard, Changpeng Zhao Tells Benzinga In Twitter Space

Zinger Key Points
  • Binance CEO Changpeng Zhao says Ethereum co-founder planning to come up with a protocol for proof of reserves.
  • Zhao says if Binance were to take responsibility for every mishap in the crypto industry, it would soon go bankrupt.
Ethereum's Vitalik Buterin Is Planning This Cryptocurrency Safeguard, Changpeng Zhao Tells Benzinga In Twitter Space

Binance CEO BNB/USD Changpeng Zhao on Monday said Ethereum ETH/USD co-founder Vitalik Buterin is planning to come up with a protocol for exchanges to automatically disclose their proof of reserves to users.

Asked by Benzinga whether exchanges are sending funds to each other to fudge their proof of reserves amid the FTX fiasco, Zhao said he does not know what other exchanges are doing — but Binance certainly does not.

“And I think there are no suspicious activities related to us. For other players, I have not seen their books so cannot comment but it is not a very good thing to do. They may or may not have a valid reason to do so but I really don’t know,” Zhao said in a Twitter space Monday. 

Also read: Why FTX's Collapse Is The Crypto Equivalent Of The 2008 Lehman Brothers Crisis

Buterin wants to come up with a new proof of reserves protocol and use Binance as the guinea pig, Zhao said, adding that he is connecting teams from both entities to initiate the process.

“We expect it (the Merkle tree) in a couple of weeks and therefore we have published all our cold wallet addresses. It is not as good as a Merkle tree but at least users know how much funds we have,” he said.

Trying To Solve Every Problem Will Bankrupt Binance 

Asked by a user if he thought it was fair to sell FTT FTT/USD tokens in Binance’s kitty and rake in the profits while average users were left with losses, and if he felt obligated to return that money to the FTX users, Zhao said his exchange had $580 million worth of FTT and only sold a small portion of it.

‘So I think we acted in very ethical ways ... We will try to help FTX users but it was the users who chose to use FTX right? And we don’t want to create a situation where if anything goes down in the industry, we have to pay for it. That is not right for our users,” Zhao said.

He added that he does not want to commit Binance to solving and be responsible for every possible issue plaguing the industry, or else “Binance will become bankrupt pretty soon.”

Regulations Cannot Stop A Bad Actor

Zhao said while regulations are necessary, they cannot stop a bad actor from being a bad actor, and that punishments only come in after a crime has been committed.

“But if a bad actor just wants to be a bad actor and you can't prevent it, in this case (FTX) I think they were lying ... FTX lied. I think Sam lied to his employees, his users, his shareholders and regulators all around the world, and all the users. So yes, he should make the most of the blame,” Zhao said.

NEXT: Canaan Net Income Nosedives 88% As Bitcoin Mining Suffers On Heels Of FTX Crumble

Photo via Shutterstock. 

Posted In: BinanceChangpeng Zhaocrypto regulationscryptocurrenciesFTXSam Bankman-FriedCryptocurrencyNewsTop StoriesMarkets

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