The CEO of crypto trading platform Binance has assured investors that the platform is secure and would refund users first over stakeholders in the case of bankruptcy.
In the wake of a recent admission by another top exchange, Coinbase, Binance issued an explanation to its users on Monday. At the time, there were several arguments about the safety of investor funds. The declaration implied that if Coinbase went bankrupt, its clients would be treated as “unsecured creditors.”
Alesia Haas, Coinbase’s chief finance officer, later stated that all investor assets are ‘completely safe.’ “There’s a very little chance it could still happen,” she remarked. The uncertainty stemmed from the risk that courts could order Coinbase to transfer user funds to its creditors.
Haas also stated at the time that there was no risk of a Coinbase run. Customers’ legal protections are plainly specified in the terms of service, she added.
User Security on Binance
Binance’s chief executive officer, Changpeng Zhao, or CZ, assured investors that the platform is secure. He said in a recent interview,
“If the trading platform goes bankrupt, users would be refunded first before considering the shareholders. Binance User funds are never mixed with operational funds. In the event of any bankruptcy or similar event, funds would be refunded to users first, before any shareholders.”
When challenged about Binance Chain’s centralized structure, CZ noted the network’s low validator count helps it achieve speedier transactions.
“Based on my limited technical knowledge, there is now a trade-off between the number of nodes and performance in our blockchain evolution.”
When asked for investment advice, the Binance CEO stated that his portfolio is not diversified and that he is not a good example.
“Investment wise, I am not a good example. I don’t diversify. I recommend most people to diversify. But for me, I am all in Binance. I am all in crypto, BNB, and BTC. I use my Binance Card everywhere I go.”
In a related move, Binance permitted direct crypto-to-fiat selling through its debit and credit cards on Monday.