{"id":543070,"date":"2023-01-24T21:21:58","date_gmt":"2023-01-24T18:21:58","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-crypto-exchanges-keep-failing-so-why-do-we-still-trust-changpeng-zhao\/"},"modified":"2023-01-24T21:21:58","modified_gmt":"2023-01-24T18:21:58","slug":"opinion-crypto-exchanges-keep-failing-so-why-do-we-still-trust-changpeng-zhao","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-crypto-exchanges-keep-failing-so-why-do-we-still-trust-changpeng-zhao\/","title":{"rendered":"# Opinion: Crypto exchanges keep failing, so why do we still trust Changpeng Zhao?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a279b2a2fb52\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a279b2a2fb52\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-crypto-exchanges-keep-failing-so-why-do-we-still-trust-changpeng-zhao\/#%E2%80%9D_Opinion_Crypto_exchanges_keep_failing_so_why_do_we_still_trust_Changpeng_Zhao_%E2%80%9C\" >&#8221; Opinion: Crypto exchanges keep failing, so why do we still trust Changpeng Zhao? &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Opinion_Crypto_exchanges_keep_failing_so_why_do_we_still_trust_Changpeng_Zhao_%E2%80%9C\"><\/span>&#8221; Opinion: Crypto exchanges keep failing, so why do we still trust Changpeng Zhao? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDEvZmYzZDAyNDItZmRhYy00NTEzLTlhOTItZDExNGI2MmIzYTFkLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a4050f8>Cryptocurrency has faced more than its fair share of catastrophes, nearly all of which seemed as though they might end or at least seriously impede the continued growth of the sector. Yet despite the many \u201cteachable moments,\u201d the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> layer of crypto refuses to learn its lesson and continues to place its trust in the hands of individuals rather than fully utilize the technologies it claims to support.<\/p>\n<p>Since the early days of the industry, crypto has faced major blows at the hands of centralized actors \u2014 Mt. Gox, which handled 70% of global Bitcoin transactions, lost track of 25,000 Bitcoin (BTC) in 2011. The most recent debacle with FTX is only the latest iteration of a longstanding pattern within crypto. Just last year, we saw Terra implode and be written off as a Ponzi scheme. In the past, we\u2019ve seen major exchanges unable to account for vast sums of user deposits, as was the case in 2018 with Canada-based exchange QuadrigaCX. <\/p>\n<p>These incidents all made waves in mainstream <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> publications, working to erode crypto\u2019s public image and further instilling an air of mystery and heightened risk surrounding the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>. Ironically, adherence to the underlying ethos of crypto would have averted such catastrophes, and concepts such as \u201cdon\u2019t trust, verify\u201d along with permissionless, publicly visible blockchain scanners should have barred centralized actors from being able to conduct clandestine operations and risking customer funds.<\/p>\n<p><strong><em>Related:<\/em><\/strong><strong><em> <\/em><\/strong><strong><em>Mass adoption will be terrible for crypto<\/em><\/strong><\/p>\n<p>Unfortunately, these centralized players often don\u2019t follow the rules or core beliefs of the industry they claim to be furthering and promote trustless transparency. Yet the social layer continued to show support and shower such actors with praise and rebuke anyone who dared question the project or the founder \u2014 such as Terraform Labs founder Do Kwon\u2019s cult.<\/p>\n<p>In the most recent development, it came to light in January that Binance USD (BUSD) \u2014 the third-largest stablecoin by market capitalization \u2014 was undercollateralized at various times to the tune of more than $1 billion. BUSD is issued by Binance, one of the leading crypto exchanges in the industry, and serves as a trusted stablecoin throughout the BNB Chain ecosystem. Despite the importance of BUSD, the news fell on mostly deaf ears, with strangely few questions for Binance CEO Changpeng \u201cCZ\u201d Zhao.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Ok I missed the part where this topped $1B?<\/p>\n<p>What kind of operational delays lead to $1B in assets being minted unbacked&#8230;.<\/p>\n<p>So at least 6% of all BUSD was unbacked at one point, or all BUSD was worth only $0.94&#8230; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/MQvyrOJrA0\">https:\/\/t.co\/MQvyrOJrA0<\/a><\/p>\n<p>\u2014 Adam Cochran (adamscochran.eth) (@adamscochran) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/adamscochran\/status\/1612871972425273344?ref_src=twsrc%5Etfw\">January 10, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>Just as has h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened many times in the past with centralized players, CZ has been largely accepted as a good-faith actor in the space, allowing him to operate with reduced oversight by the public. While there\u2019s no reason to believe CZ allowed BUSD to become undercollateralized for nefarious purposes, no one should be beyond rebuke, especially in matters that could pose an existential threat to the crypto industry as a whole. The collapse of the Terra-LUNA ecosystem in 2022 should be enough to elucidate the potential fallout of a stablecoin that has not been properly collateralized, and BUSD is used far more than TerraUSD (UST) ever was.<\/p>\n<p>Despite CZ\u2019s social standing, there\u2019s no reason he shouldn\u2019t be held accountable or at least have to explain the discrepancy and offer solutions to avoid such an event in the future. Yet, the social layer doesn\u2019t seem capable of asking hard questions or learning from past mistakes. This lack of oversight within the industry only provides fodder and further justification for regulators. <\/p>\n<p><strong><em>Related:<\/em><\/strong><strong><em> <\/em><\/strong><strong><em>From Bernie Madoff to Bankman-Fried, Bitcoin maximalists have been validated<\/em><\/strong><\/p>\n<p>Due to the lack of due diligence at the social layer, the future of crypto is now increasingly in the hands of regulators. But it\u2019s not too late to change. The regulators are coming, there\u2019s no doubt there, but we still have time to temper their fervor by being more proactive and holding centralized players accountable when there are discrepancies in their business practices. <\/p>\n<p>Schemes that resulted in billions of dollars disappearing overnight have blown crypto into the mountainous cliffs of overregulation. We were swayed by the claims of grifters hiding behind cults of personality, like ancient Greek sailors serenaded by sirens. We can still release ourselves from their hypnosis and correct course to ensure crypto has a bright future where founders can experiment and try new financial methodologies. But if we do not hold our industry accountable, we are leaving the door wide open for overzealous regulators to set the bar for what is acceptable, which will almost certainly stifle progress and innovation.<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Sam Forman <\/strong>is the founder of Sturdy, a DeFi lending protocol. He became passionate about cryptography in high school before studying math and computer <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">science<\/a> at Stanford. When he\u2019s not working on Sturdy, Sam practices Brazilian jiu-jitsu and roots for the New York Giants.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article is for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/opinion-crypto-exchanges-keep-failing-so-why-do-we-still-trust-changpeng-zhao\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Opinion: Crypto exchanges keep failing, so why do we still trust Changpeng Zhao? &#8220; Cryptocurrency has faced more than its fair share of catastrophes, nearly all of which seemed as though they might end or at least seriously impede the continued growth of the sector. Yet despite the many \u201cteachable moments,\u201d the social layer&#8230;<\/p>\n","protected":false},"author":1,"featured_media":543071,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/ff3d0242-fdac-4513-9a92-d114b62b3a1d.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75014,75166,138848,77672,74863,74860,75917,135234,78821,117],"class_list":["post-543070","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-binance","tag-binance-coin","tag-binance-usd","tag-changpeng-zhao","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-exchanges","tag-ftx","tag-quadrigacx","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/543070","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=543070"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/543070\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/543071"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=543070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=543070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=543070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}