Changpeng Zhao: “Binance, as Terra’s lender, is ready to stand at the end of the line”

The CEO of cryptocurrency exchange Binance believes that in the event of bankruptcy, any trading platforms are required to first return funds to retail customers.

Changpeng Zhao on sessions Ask Me Anything on Reddit suggested that if the Binance exchange ever went bankrupt, it would always put the interests of traders ahead of the interests of shareholders. First of all, the site would return the money to its retail customers, its CEO assures, and large ones would have to wait.

The head of Binance spoke about the investment in the LUNA coin in the amount of $1.6 billion, which after the collapse of this cryptocurrency was reduced to $3,000. To set an example regarding the protection of user rights, Zhao asked the Terra project team to first compensate the losses to retail investors, and Binance, which invested $1.6, is ready to “stand at the end of the line.”

Zhao’s remarks came shortly after Coinbase’s financial report showed a net loss of $430 million for the first quarter of 2022. Coinbase CEO Brian Armstrong assured the exchange is not in danger of going bankrupt. In the event of the collapse of any cryptocurrency held on the exchange on behalf of its clients, the trading floor may consider the asset as its property, and such clients will be considered unsecured creditors. This has raised concerns among members of the cryptocurrency community that they could lose their digital assets if the worst-case scenario does materialize.

In April, Binance announced that it would suspend services to citizens of the Russian Federation with assets worth more than €10,000. This is due to the fifth set of EU sanctions. Although Zhao had previously said that the exchange would not unilaterally block Russian users.