Binance CEO Changpeng “CZ” Zhao shared what he said were two big lessons after confirming earlier in the day that FTX had agreed to sell its non-U.S. assets to the rival exchange amid a liquidity crunch.
"Never use a token you created as collateral," he wrote on Twitter. "Don’t borrow if you run a crypto business. Don't use capital 'efficiently.' Have a large reserve."
He said that Binance had never used its BNB token for collateral and has never taken on debt. The news earlier in the day triggered a broad selloff in crypto markets, as traders worried about broader contagion.
"Stay #SAFU," he said, referring to a term used by crypto enthusiasts to denote that "funds are safe."
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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