Binance's CZ shares 'two big lessons' after FTX collapse

Quick Take

  • Binance’s Changpeng “CZ” Zhao shared what he said were two big lessons after the FTX implosion.
  • “Never use a token you created as collateral,” Zhao wrote on Twitter.

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."


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.