Binance CEO Changpeng Zhao warned in a Twitter Spaces that 99% of people who self-custody their own crypto 'will end up losing it.'
“Most people are not able to back up their security keys; they will lose the device [...] They will not have the proper encryption for their backup; they will write it on a piece of paper, someone else will see it, and they will steal those funds,” he explained.
The Binance executive also stated that even where self-custody funds are properly managed, “if a person passes away, they don’t have a way to give to their next of kin,” but custodians like Binance can implement a “standard operating procedure” to solve that problem, he said. The Binance executive concluded that “different solutions have different risk profiles” and that it is up to the user to decide what is best for them.
Despite most of Binance’s operations being “centralized,” CZ iterated that the company remained “neutral” on its preference towards custody and self-custody solutions, with the CEO stating in an earlier Twitter Space discussion on Nov. 14 thatif users moved to decentralized alternatives. “If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don't need to exist, which is great,” CZ said.Binance’s latest Twitter spaces comes amid a turbulent time for the exchange, which has seen significant withdrawals on concerns over its balance sheet and potential incoming litigation.
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