Binance CEO Draws Fire on Himself With a Controversial Tweet
Everyone knows you should keep your private keys to your cryptocurrency as safe as possible, since your funds don’t belong to you unless you have those keys. But where? Changpeng Zhao (CZ), the CEO of major cryptocurrency exchange Binance, thinks you should keep them on an exchange. However, others are warning - do not listen to this “absolutely horrible advice.”
Following the hack of the New Zealand cryptocurrency exchange Cryptopia, Zhao tweeted, “Store coins yourself. You fight hackers yourself, and guard from losing wallet yourself. Computer breaks, USBs gets lost. Store on an exchange. Only use the most reputable, proven secure, exchanges. Or move to DEX [Decentralized exchange], disrupt ourselves.” Many flocked to the statement to tell people why this was such a bad idea.
Absolutely horrible advice.— WhalePanda (@WhalePanda) January 15, 2019
Remember when MtGox was the most reputable exchange?
Other major players are warning against this, too. Jesse Powell, co-founder and CEO of cryptocurrency exchange Kraken, tweeted:
PLEASE do not store more coins on an exchange (including @krakenfx) than you need to actively trade. Use @LedgerHQ or @Trezor. DEXes are not a panacea -- look at The DAO. Open source just means exploits will be discovered sooner (probably not by good guys). 🙏 https://t.co/LmzhtCjpM0— Jesse Powell (@jespow) January 16, 2019
Others cut straight to the chase: “When Binance gets hacked, this tweet will become a meme. PS: Not if... when,” wrote Twitter user @ArminVanBitcoin. Others are warning against too much confidence, like @RNR_0: “Do not challenge/motivate hackers to accept this challenge. It's a bad idea.”
Others are pointing out that DEX isn’t such a great idea either. “But if you're using a DEX you're still technically the one who is keeping the keys, so all the dangers of storing the coins yourself are still present,” writes Reddit user u/newphonewhodizz.
After all the backlash, Changpeng Zhao had to backtrack, and do it quickly. “Some people seems to misread this tweet. It lists 3 options. It does not say which option is better than another, as that depends on each person’s security skill, preference, fund allocation, etc. Most importantly, it is an ad for the [Binance DEX]. My bad for not making it clear,” he wrote in a follow up.
But of course, since this is the crypto community we’re talking about, the whole thing could not have passed without someone making a meme out of it. #FundsAreSafu
Meanwhile, ahead of the Proof of Keys event in January, when crypto users where encouraged to withdraw their bitcoins from exchanges in order to prove ownership over them, CZ said he doesn't have an opinion about this initiative and that the exchange " will provide what the market needs. Feel free to do whatever you wish."