Binance CEO Changpeng “CZ” Zhao has warned the crypto community about self-storage, suggesting that 99% of people who choose self-storage will likely lose it one way or another.
CZ has been a supporter of self-storage for years, referring to it as a “basic human right,” but has always urged users to “do it right.” He published a “CZ’s tip” on self-storage of crypto in February 2020.
During a recently Binance-powered Twitter Spaces on December 14, the Binance CEO continued to urge caution for those using self-deposit wallets – suggesting that security keys are more often than not stored securely, backed up or properly encrypted, commenting:
“For most, for 99% of people today, who ask them to hold crypto on their own, they will end up losing it.”
CZ reiterated that holding crypto in one’s own wallet is “not risk-free” and postulated that “more people lose money holding their own – lose more crypto holding on their own than on a centralized exchange.”
And we live!
Tune in to our Twitter Space where @cz_binance answers all your questions. https://t.co/U0hJOWy74P https://t.co/CDDC20cHgt
— Binance (@binance) 14 December 2022
“Most people are not able to back up their security keys; they will lose the device […] They won’t have the right encryption for the backup; they will write it on a piece of paper, someone else will see it, and they will steal these funds,” he explained.
The Binance CEO also stated that even where self-custodial funds are properly managed, “if a person passes away, they don’t have a way to give to their next of kin,” but custodians like Binance can implement a “standard operating procedure to address that issue,” he said .
The Binance CEO concluded that “different solutions have different risk profiles” and that it is up to the user to decide what is best for them.
Despite the fact that most of Binance’s operations are “centralized”, CZ reiterated that the company remained “neutral” when it came to custody and self-storage solutions, and the CEO stated in an earlier Twitter Space discussion on November 14 that he would like to shut down. the centralized cryptocurrency exchange whose users moved to decentralized alternatives.
“If we can have a way for people to hold their own assets in their own custody securely and easily, that 99% of the general population can do that, centralized exchanges won’t exist or probably won’t need to exist, which is great,” CZ said .
Related: Members of the crypto community discuss banking on Binance
Binance’s latest Twitter pitches come amid a turbulent time for the exchange, which has seen significant withdrawals amid concerns over its balance sheet and potential incoming litigation.
A Dec. 11 report from The Wall Street Journal suggested several red flags in Binance’s proof-of-reserve audit, while a Dec. 13 Reuters report suggested that the US Department of Justice is nearing the end of a three-year investigation into Binance, which may bring criminal charges.
In recent days, a high volume of stablecoin outflows have been withdrawn from the trading platform, including $2.2 billion outflow of stablecoins Binance USD (BUSD), Tether (USDT) and USD Coin (USDC) over a 24-hour period between 13 .December. -14, according to data from the blockchain intelligence platform Glassnode.
Interestingly, Bitfinex’ed – a long-time Tether critic – shared a screenshot to his 98,000 Twitter followers on December 14 of Binance’s latest offer of 50% APR on stake USDT to its customers, claiming the exchange may be out after bolstering its allegedly fast-dwindling stablecoin reserves.
Binance now offers 50% APR on Tether scam tokens. Binance seems to be desperately trying to increase deposits.
First Cloud Mining Scam Now 50% APR Rates on Tether Scam Tokens!
— Bitfinex’ed Κασσάνδρα (@Bitfinexed) 14 December 2022
In the latest Twitter Space discussion, CZ attributed the weakened market sentiment – particularly with reference to custody solutions – to the catastrophic fall of FTX.