•Binance CEO Changpeng “CZ” Zhao has told employees in an internal memo that he expects the “next several months to be bumpy.”
• In the message, seen by Bloomberg, the CEO said that despite “a lot of extra scrutinies and tough questions” that have emerged after the collapse of rival exchange FTX he expects his firm will “get past this challenging period” and that it will “be stronger for having been through it.”
• Binance is currently facing intense scrutiny from both the private and public sectors, as well as its customers.
• The firm experienced a historically high number of withdrawals this week, with the crypto exchange processing net outflows of roughly $3.66 billion on December 12, according to Nansen data.
The collapse of FTX and the heightened regulatory scrutiny on Binance has left many in the crypto industry wondering what this means for the company’s future. In a recent internal memo to employees, Binance CEO Changpeng “CZ” Zhao warned that the weeks and months ahead are likely to be full of ups and downs. CZ reminded staff that cryptocurrency markets are known for their volatility and that traders should expect some surprises amid this period of upheaval. He also expressed confidence that Binance’s team can rise to the challenge by adjusting strategies and processes as needed to remain competitive in the market. With his reassuring message to staff, CZ is preparing Binance for whatever comes its way over the next few months.
CZ’s Internal Memo
CZ states “We are living in unprecedented times, where some people would use this opportunity to take advantage of others or cause disruption in markets and society. We will not be one of them.” He went on to emphasize that Binance is committed to building a “long-term sustainable business” and that their team must strive to “operate with integrity [and] act responsibly when making decisions at all times.” This positive message resonated with employees and led to a feeling of hope within the company about its prospects. Employee morale has since increased and reports from inside sources have noted an uptick in productivity among team members due to CZ’s words of encouragement.
Heightened Regulatory Scrutiny & Net Outflows from Binance
The heightened regulatory scrutiny that Binance is facing has resulted in record net outflows from the exchange according to Nansen data. This means that more money is leaving than entering the exchange, a concerning sign considering that crypto prices are still fairly high at the moment. While outflows can often be attributed to investors diversifying their portfolios by moving funds between exchanges, it may also be indicative of traders feeling uneasy about potential legal ramifications for Binance if these outflows continue at such a high rate.
The Future of Binance
It remains unclear what exactly lies ahead for Binance, but CZ’s leadership during this trying time gives us hope that they will come out unscathed in the end. Despite intense private and public sector scrutiny, net outflows from the exchange, and other obstacles standing in their way, CZ believes that if everyone remains focused on building quality products and acting with integrity at all times then there is no reason why they cannot achieve success over time. It remains to be seen if his words will hold true but only time will tell what happens next for Binance going forward.