Binance CEO CZ Urges Users to Diversify their Investments
Zhao Changpeng, founder and CEO of the global cryptocurrency exchange platform, Binance, recommends that individuals diversify their investments. Although Zhao, also known as CZ, warned that he doesn’t necessarily follow his own advice as well. The CEO also assured that Binance users’ funds were “SAFU”, as users dread another Terra repeat.“Investment Wise, I’m Not a Good Example”
In a Reddit AMA – which means Ask Me Anything – the 44-year-old billionaire briefly discussed a myriad of topics in response to user questions.
In one answer, Zhao made it clear that he was not a model investor. CZ stated that he had no diversified investments. All of Changpeng’s resources currently reside in Binance and other cryptocurrency-related ventures, including BNB and BTC.
While investment diversification might be important in minimizing risk, and ultimately, maximizing returns, the CEO appears to have no problem with concentrating his investments. He reportedly owns about 30% of the Binance exchange and is the 19th richest person in the world.On LUNA and the Latest Loony Market
Also addressed in the AMA was Binance’s peculiar move to continue trading LUNA, despite its suspension by its validators. On May 8, Terraform Labs’ LUNA token saw a historic devaluation, with the coin plunging from about 116 USD to less than a penny. In response to seeing over 99% of the LUNA’s value disappear, the token’s validators halted the entire Terra blockchain. The move disabled all LUNA transactions on all platforms, prompting several exchanges to delist the token.
While Binance did initially halt the trade of LUNA to protect its users’ financial security, the exchange resumed trading soon after. It did, however, urge traders to proceed with extreme caution.
Zhao wrote that Binance’s decision to resume the token’s trade was the reason its validators chose to reopen the blockchain.User Funds Safety and Decentralization
In response to another question regarding the safety of user funds, Zhao clarified that in no case does Binance utilize user funds in the company’s operations. The CEO alluded to the clear separation of the two resources. He went on to add that the company prioritized user funds. According to Changpeng, in the event of bankruptcy or any other event which threatened the Binance’s financial stability, the company would refund users before investors or shareholders.User funds are kept separate from the exchange’s operating funds. And, if this were to happen, funds would be refunded to users first, BEFORE any shareholders. Funds are SAFU.”
In addition, Changpeng also briefly touched on the Binance Chain’s mode of operation. When asked about the chain’s centralization, the CEO answered that the blockchain’s fewer validators helped it achieve its record transaction times. Zhao did, however, promise to broach the topic with the company’s developers.Stay up to date with our latest articles