Both Binance and Crypto.com hosted live question-and-answer sessions on Monday morning in an attempt to reassure investors that the cryptocurrency exchanges won’t meet the same fate as FTX, which suffered a sudden and catastrophic collapse last week.
FTX, formerly the world’s largest cryptocurrency exchange by volume, filed for bankruptcy after Binance walked back on its deal to purchase the beleaguered firm. Its crash raised concerns among investors over the safety of their funds, and crypto exchanges are responding by trying to be as transparent as possible, whether that means posting proof of their reserves or hosting ask me anything (AMA) sessions.
Binance CEO Changpeng “CZ” Zhao told listeners during a Twitter Space that the company currently doesn’t have any liabilities. “We run a very simple business,” CZ explains. “We don’t have loans, we don’t have debt, we don’t owe anybody any money.” He also emphasized that Binance’s funds never leave the platform and that the business is “self-contained.”
Meanwhile, Crypto.com, which saw an increase in withdrawals over the weekend after it admitted to mistakenly transferring $400 million to another crypto exchange, held an AMA on YouTube. “Our platform is performing business as usual,” Crypto.com CEO Kris Marszalek says. “People are depositing, people are withdrawing, people are trading. There is pretty much normal activity, just at a heightened level.” Marszalek adds that the company doesn’t “engage as a company in any irresponsible lending practices” and that it “never took any third-party risks.”
Crypto.com posted a preliminary glimpse at its reserves last week, which drew criticism from investors after they realized the company holds more Shiba Inu — a meme coin that’s worth a fraction of a cent — than Ethereum, a much bigger player in the crypto market with a price that currently sits at about $1,200.