Binance founder and CEO Changpeng “CZ” Zhao believes that “bad” crypto projects should be left to fail rather than bailouts from crypto companies with healthy cash reserves.
In a June 23 blog post, CZ stated that companies that are poorly run, poorly managed, or release poorly designed products should not be bailout — but should be allowed to collapse:
“In short, they are just ‘bad’ projects. These shouldn’t be saved. Sadly, some of these ‘bad’ projects have large numbers of users, usually through inflated incentives, ‘creative marketing’ or purely obtained through a Ponzi scheme.”
“Also, in any industry, there are always more failed projects than successful projects. Hopefully the failures are small and the successes are big. But you get the idea. Bailouts don’t make sense here,” he added.
The comments come amid recent moves by the crypto billionaire Sam Bankman Fried and his company Alameda Research provides bailouts to companies and projects that have recently experienced liquidity problems, such as Voyager Digital offers revolving loans 350 million USD coins (USDC) and 15,250 bitcoins, worth $464.48 million at the time of writing.
However, CZ went on to point out that Binance may seek to support some cash-light companies that are “problematic but solvable” or “barely viable but have great potential.”
“Many projects that want to engage and talk come to us. Again, in real life these categories are not clearly labelled. All projects see themselves as a third category and we need to look at each project in detail to make Decision. It has some subjectivity,” he said.
Many companies are facing liquidity issues due to the current bear market, while others are Contact potentially insolvent companies As well as projects such as Three Arrows Capital and Celsius.
The Binance CEO’s comments echoed similar sentiments made by U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce on Tuesday. Totally oppose cryptocurrency bailouts.
In a June 21 interview with Forbes, the crypto-friendly commissioner dubbed “Crypto Mom” argued that rather than bail out struggling companies, it’s better to “make these things work” to create a more sustainable industry.
“When things are a little bit difficult in the market, you find out who’s actually building something that’s probably going to last a long time and what’s going to pass,” she said.
On June 23, CZ said period In an interview with Bloomberg Businessweek, his company’s mission is to support blockchain-based autonomous projects that can operate without a central authority or leadership, rather than the traditional centralized model.
As part of his mission to decentralize, the CEO also referred to his own company as an “organization” and his employees as “team members.”
However, the publication cited comments from an alleged anonymous former Binance employee that the company may not be as decentralized as claimed, noting that CZ has sole authority over the company and its business decisions.
“At the end of the day, he’s the holding company,” a former employee told the publication.
Given that CZ has never explicitly stated that Binance is a decentralized company, although he advocates the concept, the Bloomberg article’s angle may be taken with a pinch of salt.While Binance Smart Chain does claim to be a decentralized ecosystem, A valid critique of the lack of such conduct In the past.
Although CZ targeted mismanaged companies this week, Binance’s governance structure has also been called into question.