- Never use a token that you have created as collateral
- Do not take loans if you run a cryptocurrency business. You have to have a large capital reserve.
At the same time, he gave confidence to his own company: “Binance has never used BNB as collateral, and we have never taken debt. Stay #SAFU.”
FTX’s liquidity woes appear to have come after a Nov. 6 tweet from Zhao saying that Binance would be liquidating its FTX Token holdings following “recent revelations” related to reports of links between FTX and the firm. of Alameda Research trading, showing that the company had significant FTT holdings.
Although Binance does not currently disclose proof of the reserves it uses as collateral, Zhao mentioned in a Nov. 8 tweet that in an effort to be fully transparent, Binance will soon provide proof of its reserves., saying: “Banks run on fractional reserves. Crypto exchanges shouldn’t do it.”
Zhao’s second lesson from the fall of FTX is that cryptocurrency businesses should not borrow and instead choose to hold large reserves, which could be in reference to FTX users who complained about the impossibility. to make withdrawals, sparking rumors that the exchange did not have enough to cover user funds.
Zhao’s tweet confirming the liquidation of Binance’s FTT reserves ended up triggering what some called a “bank run” on the exchange.
Source: Ambito
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