‘Crypto experiences its Lehman Brothers moment’

The devastating wildfire raging in the crypto markets today is similar to the global banking crisis of 2008 and will require even more victims, Binance CEO Changpeng Zhao said. “But for us, now is the time to grow more aggressively.”

Even a crypto king has to take care of the little ones these days. As CEO of Binance, 44-year-old Changpeng Zhao heads the world’s largest cryptocurrency exchange, which trades for more than 20 billion virtual coins every day.

But during his visit to Brussels last weekend, apparently only a faded McDonald’s menu was available. “We’re at a bear market,” the Binance boss joked over a picture of a fish burger and a packet of fritters on Twitter.

Just before that, seven hundred loyal Binance users and fans of Changpeng Zhaos hung every word during a ‘Super Meetup’ hosted by the crypto exchange on Sunday at Brussels Docks Dome.

There is no such thing as a crisis mood. Although bitcoin had fallen below $ 20,000 for the first time in a year and a half last weekend, champagne flowed abundantly at the reception afterwards. Dozens of people waited patiently in line for a selfie with CZ, as the Binance boss prefers to be called. In the background, a hyperactive presenter was toasting that visitors were getting another free NFT of a picture of Atomium.

“Clearly, today are not the best times for many people investing in crypto,” CZ said just before the start of the Binance event. “But we have already been through several of the difficult periods, we know that such a thing can happen. When Binance started, bitcoin was worth $ 2,000. Today it is still ten times more. ‘

Binance is looking at Belgium

Binance is talking today with the Belgian regulators about the conditions for opening a branch in our country. Binance CEO Changpeng Zhao said this on Sunday during an event on the crypto exchange in Brussels. At the same time, the company wants to profile itself as an investor in Belgian tech start-ups.

Binance already claims to be the largest crypto exchange in Belgium – although it does not provide any figures – but it is currently not regulated by any regulator.

If Binance were to open an office in our country, that would change. Crypto exchanges wishing to open a branch in Belgium have recently come under the supervision of the financial watchdog, FSMA. If Binance wants to open a Brussels office, it has until July 1 to register.

In May you had the implosion of stablecoin terraUSD, last week the lending platform Celsius ran into problems. Does crypto experience its Lehman Brothers moment? The explosion of this investment bank in 2008 set in motion a chain reaction in the financial sector.

CZ: ‘It’s actually very similar to what happened after the implosion of Lehman Brothers. There is a lot of leverage, borrowed money, in the system. When a company goes bankrupt, it can hurt or pull other financiers into its trap. With the price drop that we have now seen, there will certainly still be companies with high leverage that will go under. ‘

“But in contrast to the Lehman period, the number of companies that get into trouble is small in relation to the total number of players. And no one should be saved with public money. By the way, the imploded terraUSD and sister coin luna were larger than Lehman Brothers in size. At terraUSD, $ 80 billion went up in smoke, at Lehman Brothers it went up to $ 60 billion. ‘

This malaise has no implications for Binance at present. We do not owe any money, nor have we provided loans to the companies that are most vulnerable right now. The exception was Luna, in which we initially invested $ 3 million. ”

You tweeted earlier that Binance will hire while your competitors cut thousands of jobs.

CZ: ‘During the boom, we kept our fingers crossed, but now is the time to grow more aggressively. We want to recruit a lot of people. During the boom, the need for talent was so great that wage demands became ridiculous. A newly trained programmer could charge up to half a million dollars a year for a thesis that someone with some talent can learn in two weeks. ‘

‘At the same time, we want to invest more and we are looking at possible acquisitions. We can buy other crypto exchanges. ‘

Planning for a European conquest after Binance received the green light from French authorities in May to open an office in Paris

CZ: “After the United States, Europe is the most important market for us. People are embracing crypto here faster, and yet the region is more open to innovation in financial technology. Working closely with regulators is very important to us. I believe that collaboration is necessary to grow as a sector. We also see this in our figures. Wherever we have a license, our user numbers are steadily rising. This is how it is in France, but also in Italy, for example. ‘

© Christophe De Muynck

Does Binance have a money laundering problem? According to Reuters, Binance has made it possible for fraudsters and criminals to launder more than $ 2 billion in the last five years.

CZ: ‘That report is really fake news. All transactions are tracked on a blockchain and are therefore in principle traceable. We asked Reuters reporters how they got the detailed number and if they could give us a list of suspicious transactions. But they did not. “
“I do not mean that one cent will not be laundered on our platform. You are not 100 percent sure of that. But we have the best auditing tools in the world and surpass other industry players, even any bank.”

In size, the imploded terraUSD and sister coin luna were larger than Lehman Brothers. At terraUSD, $ 80 billion went up in smoke, at Lehman Brothers it went up to $ 60 billion.

Changpeng Zhao

Binance CEO

‘Just because all transactions are registered on a blockchain, there is actually more transparency. Courts and specialized companies like Chainalysis are constantly analyzing this data. They have an extensive database of transactions that they believe are suspicious. ‘

‘We also use those tools ourselves, and we also work with agencies like the FBI and Interpol. If we see money coming in that we suspect has a suspicious origin, we block them. But we can not release all our customers’ data ourselves. That would be a serious breach of privacy law. ‘

also read

Leave a Comment