Shun Exchanges That Need Funding To Operate – Binance CEO
The CEO of giant crypto exchange, Binance, has weighed in on the recent events in the crypto sector. Several crypto firms have halted withdrawal services on their platforms in recent months.
Changpeng Zhao, Binance CEO, advised investors to shun all crypto firms that need funding for their operations. This is because there are very prone to liquidity.
Zhao Says Binance Exchange Is Sustainable
On the 21st of July, the CEO of Binance responded to a tweet on Twitter. The tweet talked about the recent stoppage of withdrawal services on Zipmex indefinitely.
Another one bites to the dust.
Choose exchanges wisely.
Avoid exchanges that need to raise money to survive. https://t.co/iSSDGGaUNL— CZ 🔶 Binance (@cz_binance) July 21, 2022
According to Zhao, crypto investors should choose exchange firms carefully. He told investors to shun all exchange firms that need funding to function.
Meanwhile, a Twitter user @ksacrypto2030 asked Zhao if Binance would not face the same fate soon. Responding to the question, the CEO stated that no business is totally risk-free.
However, he assured users that Binance is sustainable and very successful. Besides, the exchange is the largest in the crypto industry, with over $20 billion as daily trading volume.
In other news, Zipmex has joined other struggling firms in the crypto ecosystem. According to Zipmex, several variables above their control led to the present situation.
It also mentioned the bearish crypto market that started earlier this year. The company had to halt withdrawals to maintain its integrity and cope with the volatile market.
Crisis In The Crypto Industry
Meanwhile, Zipmex had advertised itself as a “global crypto exchange firm that provides high insurance and liquidity for clients’ assets. Unfortunately, the latest event has questioned the authenticity of that statement.
Besides, reports say Celsius is the first crypto lender to restrict withdrawals on its platform. Also, the company has been linked to several unscrupulous acts and Ponzi schemes.
The recent crypto market crisis all dates back to the fall of Terra. Since the fall of Terra’s ecosystem worth over $40 billion, several crypto lenders have gone bankrupt. This is because most of them had invested in the Terra ecosystem.
Examples of crypto lenders that have bankrupt include Babel Finance, Celsius, CoinFLEX, Three Arrows Capital, BlockFi, and Vauld. They have blocked withdrawal options on their platform due to liquidity issues.
The latest to join the list is the Asian-based crypto lender, Zipmex. The firm recently announced the stoppage of withdrawals on its platform.
Meanwhile, some lenders have been taking steps to ensure it refunds their users. Last week, the crypto lender applied for Chapter 11 bankruptcy.
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