Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, has called for more regulation of the cryptocurrency industry.
Zhao was speaking at a conference in Bali, Indonesia, attended by leaders of the G20 group of nations.
His comments came as the tension rose from the collapse of rival firm FTX, founded by Sam Bankman-Fried. The crypto exchange filed for bankruptcy last week after customers rushed to withdraw $6 billion in crypto tokens in just 72 hours.
According to Zhao, there are some bad players in the industry who are specifically targeting struggling crypto enterprises that do not have enough cash or assets to cover their immediate requirements. To ensure a smooth pathway, he announced plans for a recovery that would reduce the threat of "cascading negative effects" following FTX's collapse.
“So, but the regulators do have a role. We do need slightly more, we do need to increase the clarity of regulations, and the sophistication of regulations in the crypto space,” Zhang stated. “So, over the last week, there’s so much turmoil in our industry. But I want everybody to understand that that’s not reflective of everything in the industry. The industry goes through ups and downs. We have one, or maybe worse players in the industry, but the is still growing, so we’re still building.”
Irreparable Damage
The FTX's sudden collapse has also eroded confidence in the digital asset market as a whole. Even the most established digital currency, Bitcoin, hit a two-year low following trouble at FTX. The crypto token was trading at around $16,000 on Monday, having witnessed a fall of nearly 22% last week.
In a statement earlier this week, the Royal Bahamas Police said they were looking into whether any "criminal misconduct occurred" at FTX. That's after Reuters reported that at least $1 billion of user funds had vanished from the crypto platform.
According to Reuters sources, Sam Bankman-Fried had transferred $10 billion of customer funds to his trading firm, Alameda Research.
FTX shifted its headquarters last year in September from Hong Kong to the crypto-friendly Bahamas. Bankman-Fried stated at the time that the Caribbean tax haven had more regulator leverage than the Asian city and was a perfect spot to run business.
