While the crypto ecosystem has been paralyzed for weeks by the FTX affair, one of its players is rubbing their hands. Changpeng Zhao, CEO of Binance, has thus raised doubts about the reliability of its competitors, and seems to take pleasure in maintaining doubt. But the strategy is perilous for “CZ”, which could see confidence in the ecosystem waver. Back on his maneuvers in recent days.
Changpeng Zhao capitalizes on FTX crisis
Needless to say: the FTX affair is the biggest crisis that the crypto ecosystem has experienced. Major players are shaken, but even more significantly, it is investor confidence that has been damaged the most. Can we still trust central companies, even though the second largest global platform turned out to be a house of cards? This is the question that is being asked, and Changpeng Zhao has understood it well.
Binance’s CEO raised questions about the solvency of Grayscale, whose product GBTC is the subject of controversy this week. In a since-deleted tweet, Changpeng Zhao questioned the solvency of Grayscale… Tackle Binance’s competitor, Coinbase, which provides the funds in question. To the point of eliciting a public reaction from Brian Armstrong:
If you see FUD out there – remember, our financials are public (we’re a public company) https://t.co/ayzN0zaqgT
—Brian Armstrong (@brian_armstrong) November 22, 2022
Officially, Changpeng Zhao does not however seek to weaken the competition . He communicated that he was not happy about the fall of FTX… Even though Sam Bankman-Fried opined in a leaked private conversation that the CEO of Binance had coordinated an attack, and won the war.
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Changpeng Zhao’s role in the ecosystem
This is the ambiguity of Changpeng Zhao’s positioning. Man has built a hegemonic empire, and communicates on his desire to secure the ecosystem. But you would have to be blind not to see that the CEO of Binance transformed the current crisis into a communication operation particularly effective.
Within weeks, he announced raising the threshold of Binance’s emergency fund, proposed to create an interexchange emergency fund to deal with these types of crises, published Binance’s addresses – where tens of billions of dollars are stored– and reminded that the company continues to hire… Among other communications aimed at highlighting the solidity of Binance.
This week, however, Changpeng Zhao regretted that the crisis has shaken the ecosystem to such an extentand investor confidence:
Some (including me) say this will “set the industry back a few years.” But thinking about it, this is natural. There will be failures with progress. Happened in regulated TradFi in 2008, after 70+ years of development. The industry will recover quickly, and become stronger.
— CZ 🔶 Binance (@cz_binance) November 23, 2022
“Some (myself included) say this will “hold the industry back for years to come”. But thinking about it, it’s natural. […] It happened in traditional regulated finance in 2008, after more than 70 years of development.»
Changpeng Zhao therefore sees the current crisis as a purge , and if this can make it possible to weaken some competitors, why not? It is of course impossible to judge the sincerity of the CEO of Binance, but we note that the platform, which was already crushing the competition, will come out of the case even stronger.
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Source: Changpeng Zhao via Twitter – Image: Web Summit via Flickr (CC BY 2.0)
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