The crypto market is trying to pick up the pieces after it was thrown into massive disarray last week when the previously third-largest crypto exchange, FTX, imploded and filed for bankruptcy.
“It’s obvious that people are jittery, interested and somewhat nervous about what’s happening in the industry,” Changpeng ‘CZ’ Zhao, CEO of the largest crypto exchange Binance, said during a Twitter Space on Monday. “I want to say, short-term it is painful. But, I think this is good for the industry long-term.”
Zhao acknowledged that a lot of people lost money recently and many still have money stuck with FTX, so “there will be pain.” But he hinted that market conditions should improve down the line.
“The industry is not going away and the other strong industry players are now even stronger,” he said.
Last week, a number of crypto exchanges, including Binance, Crypto.com, KuCoin and OKX said they would begin publishing proof-of-reserves in an effort to reassure customers and investors that their funds are safe in the wake of the FTX debacle. Last week, Zhao emphasized the importance of transparency, tweeting, “All crypto exchanges should do merkle-tree proof-of-reserves.”
Proof-of-reserves (PoR) are independent audits by third parties that aim to provide transparency and evidence that a custodian holds the assets it claims to own on behalf of its clients.
These exchanges join other crypto businesses like Gemini, BitGo, and Paxos, to name a few, which have used PoR for many years to prove billions of dollars in value, Sergey Nazarov, co-founder of Chainlink, told TechCrunch on Friday.
“Now we’re increasing transparency in the industry, we’re increasing security in the industry, and we’re increasing communications with regulators all around the world,” Zhao said today. “I think five years later, when we look back at this, the industry will be stronger.”