CEOs Seek to Assure Users of Safety, Transparency

In the wake of the spectacular collapse of Sam Bankman-Fried's FTX empire, the heads of two major centralized exchanges (CEX) held separate online AMA events to assure users that their companies operate differently from FTX and that funds deposited with them are safe.

Crypto.com CEO Kris Marszalek said the FTX debacle set crypto back "a good couple of years, in terms of our reputation and the efforts we put in. Trust was damaged if not lost."

Marszalek and Binance CEO Changpeng Zhao (CZ) both stressed the need for greater transparency by exchanges, starting with publicly audited Proof of Reserves (PoR).

Marszalek said: "I think people are way past taking anybody's word for granted. People want to see actions, so as a company, as a brand as a team, we have always focused on not what we say but what we do."

CZ said the timeline is for Binance to release fully audited PoR in a couple of weeks. Beyond that, he said he had spoken with Ethereum Co-Founder Vitalik Buterin about developing a new PoR protocol and testing it on Binance. He said Buterin is much deeper into technical details than he is, but CZ is on board with the idea.

"I will connect him to our team and see how it works. I want to be their guinea pig," CZ said.

Both CEOs emphasized that their business models are different from FTX, relying on maintaining one-to-one reserves on deposits while generating profits via user fees. Each reaffirmed that neither Crypto.com nor Binance uses customers’ assets to invest.

"Our business model is actually very simple. We provide access to the masses to digital assets and take a fee for it," Marszalek said.

He said the company will soon prove with audited statements that they maintain one-to-one reserves -- holding the same types and amounts of tokens (including, for example, Shiba Inu) that their customers deposit.

"Mixing up a hedge fund business together with an exchange is a terrible idea and it should be outlawed," Marszalek said.

CZ elaborated that Binance does not take out loans, does not take venture capital investments, and does not have debt.

Further, he said the CEX is just one line of business for Binance, and that he considers truly Decentralized Finance (DeFi) to be the future of crypto, with people holding their own assets independently on-chain.

"If everybody withdrew their funds from the centralized exchange, we'll just shut down the centralized exchange. We have many other profitable businesses. So it's fine," CZ said.

Elaborating upon Binance's recently announced crypto recovery fund, CZ said four or five other firms and projects have reached out saying they also wanted to participate in the relief effort.

In addition to the recovery fund, CZ said he is working to help form a global industry association of major crypto players, to maintain communications with regulators, promote best practices for the sector, and act as a point of contact for policy formation, etc.

"I'm actually very confident about the future of our industry," CZ said.

What is Crypto.com:

Crypto.com is a cryptocurrency exchange that was started operating in 2016. It has extended its reach to over 10 million users within 5 years. The platform was founded by Bobby Bao, Gary Or, Kris Marszalek, and Rafael Melo, with its headquarters in Hong Kong. In addition to the cryptocurrency application, the platform also runs the Crypto.com Visa card, one of the world’s largest cryptocurrency card programs, the exchange, and a DeFi wallet. The exchange operates across 3 continents, the Americas, Europe, and Asia.

For more information about the project:‍

Website | Twitter | Medium | Linkedin | Discord | Telegram | Reddit | Kakao |

What is Binance:

Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.

Where to find Binance:

Website | Twitter | Discord | Telegram |