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| Version 0 | Version 1 |
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| Biggest crypto exchange Binance urges new industry rules | Biggest crypto exchange Binance urges new industry rules |
| (3 months later) | |
| Binance head Changpeng "CZ" Zhao | Binance head Changpeng "CZ" Zhao |
| The head of the world's biggest cryptocurrency exchange has told global leaders new regulations are needed. | The head of the world's biggest cryptocurrency exchange has told global leaders new regulations are needed. |
| Binance chief Changpeng Zhao was speaking at a conference in Bali, Indonesia, attended by heads of the G20 group of nations. | Binance chief Changpeng Zhao was speaking at a conference in Bali, Indonesia, attended by heads of the G20 group of nations. |
| The company has also announced plans for a recovery fund to help struggling crypto businesses. | The company has also announced plans for a recovery fund to help struggling crypto businesses. |
| It follows the bankruptcy of the FTX exchange, which shook the industry and wiped billions off the crypto market. | It follows the bankruptcy of the FTX exchange, which shook the industry and wiped billions off the crypto market. |
| The failure of the rival exchange, founded by Sam Bankman-Fried, has left many small investors worried they face big losses. | The failure of the rival exchange, founded by Sam Bankman-Fried, has left many small investors worried they face big losses. |
| 'Protect consumers' | 'Protect consumers' |
| "We're in a new industry, we've seen in the past week, things go crazy in the industry," Mr Zhao, known as CZ, said, according to the Reuters news agency. | "We're in a new industry, we've seen in the past week, things go crazy in the industry," Mr Zhao, known as CZ, said, according to the Reuters news agency. |
| "We do need some regulations, we do need to do this properly, we do need to do this in a stable way." | "We do need some regulations, we do need to do this properly, we do need to do this in a stable way." |
| But crypto companies also had responsibilities, Mr Zhao said. | But crypto companies also had responsibilities, Mr Zhao said. |
| "The industry collectively has a role to protect consumers, to protect everybody. So it's not just regulators," he said. | "The industry collectively has a role to protect consumers, to protect everybody. So it's not just regulators," he said. |
| In many countries, cryptoassets are lightly regulated compared with other financial sectors, with few protections for consumers. | In many countries, cryptoassets are lightly regulated compared with other financial sectors, with few protections for consumers. |
| The UK government has previously announced plans to regulate stablecoins, which, as the name suggests, are designed to have a stable value linked to traditional currencies or assets such as gold. | The UK government has previously announced plans to regulate stablecoins, which, as the name suggests, are designed to have a stable value linked to traditional currencies or assets such as gold. |
| Mr Zhao said the recovery fund - for otherwise strong companies unable to find enough cash, or assets that can be easily converted into cash, to cover their immediate needs - would reduce the risk of "cascading negative effects" following FTX's bankruptcy. | Mr Zhao said the recovery fund - for otherwise strong companies unable to find enough cash, or assets that can be easily converted into cash, to cover their immediate needs - would reduce the risk of "cascading negative effects" following FTX's bankruptcy. |
| To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify. 1/2 | To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify. 1/2 |
| Binance's announcement it would offload its holdings of FTX's cryptocurrency, FTT, and its subsequent abandonment of a rescue deal for the troubled exchange - after carrying out due diligence checks - were factors in FTX's collapse, which wiped an estimated $200bn (£170bn) off the crypto market in a matter of days. | Binance's announcement it would offload its holdings of FTX's cryptocurrency, FTT, and its subsequent abandonment of a rescue deal for the troubled exchange - after carrying out due diligence checks - were factors in FTX's collapse, which wiped an estimated $200bn (£170bn) off the crypto market in a matter of days. |
| And it is now feared other crypto businesses could be at risk, as investors withdraw funds. | And it is now feared other crypto businesses could be at risk, as investors withdraw funds. |
| Rescue plan | Rescue plan |
| Meanwhile UK MPs on the Commons Treasury Select Committee were able to quiz business figures, including Binance, as part of their inquiry into the cryptoasset industry. | Meanwhile UK MPs on the Commons Treasury Select Committee were able to quiz business figures, including Binance, as part of their inquiry into the cryptoasset industry. |
| Daniel Trinder, Binance vice-president of government affairs in Europe, denied that the company's actions had contributed to the collapse of FTX. | Daniel Trinder, Binance vice-president of government affairs in Europe, denied that the company's actions had contributed to the collapse of FTX. |
| That, he alleged, was caused by "failures around governance, around risk management, around excessive leverage, about, if we believe the reports, inappropriate use of clients' assets". | That, he alleged, was caused by "failures around governance, around risk management, around excessive leverage, about, if we believe the reports, inappropriate use of clients' assets". |
| Instead Binance had been trying to rescue FTX, realising the implications for the wider industry. | Instead Binance had been trying to rescue FTX, realising the implications for the wider industry. |
| He told MPs that the exchange "started that due diligence process and realised something was very wrong and we pulled out of it". | He told MPs that the exchange "started that due diligence process and realised something was very wrong and we pulled out of it". |
| The incident, he argued, showed the need for regulation. | The incident, he argued, showed the need for regulation. |
| Related Topics | |
| G20 | |
| Cryptocurrency |