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."
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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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