"Bad" cryptocurrencies should not be saved, says Binance founder CZ

“Bad” cryptocurrencies should not be saved, says Binance founder CZ – Mail Bonus

Binance’s founder and CEO, Changpeng “CZ” Zhao, argues that “bad” cryptocurrencies should fail and not be rescued by cryptocurrencies with healthy foreign exchange reserves.

In a blog post on June 23, CZ said that companies that have been poorly run, poorly managed or have released poorly designed products should not be rescued – and should instead be made to collapse:

“In short, these are just ‘bad’ projects. This should not be saved. Unfortunately, some of these “bad” projects have a large number of users, often obtained through inflated motivation, “creative marketing or pure Ponzi schemes.”

“In any industry, there are always more failed projects than successful ones. Hopefully the mistakes are small and the results great. But you understand the idea. “Rescue operations here are not sensible,” he added.

The comments follow the recent actions of cryptocurrency billionaire Sam Bankman Fried and his company Alameda Research to rescue companies and projects in recent liquidity problems such as Voyager Digital with a turnover loan of USD 350 million Coin (USDC) and 15,250 BTC, which is worth it. $ 464.48 million at the time of writing.

CZ continued to keep in mind that Binance could seek to support some money-light companies that are either in “trouble but can be fixed” or “barely surviving but have great potential.

“Many projects have come to us who want to participate and talk. Again, in real life, these categories are not clear labels. All projects are considered as the third category and we need to look at each project in detail to decide. There is some subjectivity in that, “he said.

Some companies are going through liquidity problems due to the current bear market, while others are struggling with potentially bankrupt companies and projects such as Three Arrows Capital and Celsius.

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The comments of Binance’s CEO echoed similar views from US Securities and Exchange Commission (SEC) Secretary-General Hester Peirce on Tuesday, who argued against crypto-saving altogether.

In an interview with Forbes on June 21, the crypto-friendly CEO, known as “Crypto Mom”, argued that instead of rescuing companies in difficulty, it would be better to “let these things play out” to create a more sustainable industry.

“When things get a little harder on the market, you discover who is actually building something that could last longer, longer and what’s going to happen,” she said.

Centralized Binance

On June 23, CZ said in an interview with Bloomberg Business Week that his company’s role was to support independent blockchain-based projects that can operate without a central authority or leader, as opposed to the traditional centralized model.

The CEO also referred to his own company as an “institution” and his employees as “team members” as part of this project of devolution.

However, the publication cited comments from alleged anonymous former Binance employees who said that the company could not be as decentralized as claimed, stating that CZ has sole control over the company and its business decisions.

“At the end of the day, he is the holding company,” a former employee told the publication.

The angle of the Bloomberg article may need a pinch of salt, given that CZ has never explicitly stated that Binance was a decentralized company despite its advocates for the idea. Although the Binance smart chain claims to be a decentralized ecosystem but has previously received valid criticism for its lack of it.

Although CZ has targeted poorly run companies this week, Binance’s governance has also been called into question.