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The CEO of cryptocurrency exchange Binance believes that in the event of bankruptcy, any trading platforms are required to return funds to retail customers first.
Changpeng Zhao (Changpeng Zhao) in the question and answer session Ask Me Anything on Reddit suggested that if the Binance exchange ever goes bankrupt, it will always put the interests of traders above the interests of shareholders. First of all, the site would return money to its retail customers, assures its CEO, and the large ones would have to wait.
The head of Binance spoke about investments in the LUNA coin in the amount of $ 1.6 billion, which after the collapse of this cryptocurrency decreased to $ 3,000. To set an example for protecting user rights, Zhao asked the Terra project team to first compensate retail investors for losses, and Binance, which invested $ 1.6, is ready to “stand at the end of the queue.”
Zhao’s speech was made shortly after the publication of the financial report of the Coinbase trading platform, according to which its net loss for the first quarter of 2022 amounted to $ 430 million Coinbase CEO Brian Armstrong (Brian Armstrong) assured that the exchange is not threatened with bankruptcy. In the event of the collapse of any cryptocurrency stored on the exchange on behalf of its customers, the trading platform may consider the asset its property, and such customers will be considered unsecured creditors. This has raised fears 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 servicing Russian citizens with assets worth more than € 10,000. This is due to the fifth package of EU sanctions. Although earlier Zhao said that the exchange will not unilaterally block Russian users.
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