CEO of biggest exchange made controversial statement that sounds hostile to some extent
A statement by the CEO of the largest cryptocurrency exchange Hundreds of investors in the market space puzzled. Changpeng Zhao said that those who transfer their digital assets to self-custody will still lose them. The statement was made during a Twitter Space talk, amid the massive outflow of funds from Binance.
The main claim of users was a conflict of interest that CZ has in speaking about this topic. From a technical standpoint, funds in self-custody are significantly safer than funds on cryptocurrency exchanges, considering the frequency of attacks on trading platforms, the dishonesty of the exchange’s lead and mismanagement quite often lead to a loss of users’ funds.
losing money in self custody
The only scenarios in which users can lose their coins are unintentional loss of keys, use of wrong recipient addresses when transferring funds, and other cases of poor fund management. However, if a wallet owner stores their private keys properly, double-checks an address when transacting funds, and takes all necessary steps, loss of funds is nearly impossible.
Obviously, the CEO of the biggest cryptocurrency exchange on the market knows the aforementioned things, which means that the phrase has been taken out of context. What Zhao really meant is that holding assets in your own wallet is not risk-free and users will still lose their funds, even without the third-party due to an extremely low level of education and a lack of user-friendly interfaces that would make storing crypto as easy as storing funds on centralized exchanges.
However, many community members did not care to listen to the full recording and instead jumped to conclusions, including even some influential people. At the same time, the numbers CZ showed when he made his speech are unlikely to be close to reality.
