Binance’s CZ advocates against self-custody wallets, while BNB loses 10%
Binance’s CZ advocates against self-custody wallets, while BNB loses 10%
YEREVAN (CoinChapter.com) – The FUD around the largest crypto exchange Binance continues, resulting in its native token, BNB losing ground. However, the exchange’s CEO Changpeng Zhao (CZ) urges users not to lose trust in centralized exchanges and says 99% of custody wallet holders could “end up losing” their funds.
Binance CEO says, “custody wallets are not risk-free.”
In detail, the CEO held a Twitter Spaces meeting on Dec 14, discussing relevant events in the field, the FTX demise, and the recent wave of client withdrawals that allegedly did not give CZ grief. Among other questions, CZ was asked about the shattered trust towards centralized exchanges. The CEO asserted that the distrust is based on generalization, which is not good for anyone.
If you’ve been hurt by a bank, you stop trusting all the banks. I get that. If one political is corrupt, you think all politicians are corrupt. But the fact is because one bank is bad, it doesn’t mean all other banks are bad.
commented CZ.
Custody wallets diminish the need for centralized exchanges
Most of Binance’s operations being are centralized. However, CZ also asserted that the exchange is “neutral” in its preference towards custody and self-custody solutions while saying self-custody wallets are not risk-free.
For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it. Most people don’t keep their security keys safely.
said the CEO.
Additionally, CZ commented that if “99% of the general population” can hold their custody wallets securely, “centralized exchanges will not exist or probably don’t need to exist, which is great.” But according to the CEO, that’s not the case. People often share their private keys voluntarily without realizing the risks. They might also store sensitive information on a device, which they can lose.
Also read: Binance FUD Continues With “Eye-Popping” Withdrawals — CZ Not Worried.
However, the argument on the high risk of custody wallets rings hollow for thousand of users that lost their funds in the FTX debacle. Furthermore, the FUD around Binance’s possible illicit activity worsened the exchange’s situation. As a result, its in-house token BNB dropped 10% since Dec 12.
BNB price risks dropping below crucial support
The BNB price stood at $265 on Dec 15, after a red week of 10% declines. However, the digital asset could see more pain in the upcoming sessions if it fails to hold the current $262 level of support. The said assistance line has been relevant since March 2021. But considering the declining trading volumes on the daily chart, a further drop to $255 is likely.
Binance coin (BNB) price is on its way to $255. Source:TradingVIew.com
Notably, BNB decoupled from Bitcoin since Dec 12, when the FUD around Binance first started. That exacerbates the bearish expectations, underscoring BNB’s dependency on its parent exchange.
Also read: Kevin O’Leary slams Binance’s CEO over role in FTX collapse.
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Filed under: Bitcoin - @ December 15, 2022 10:05 am