Changpeng Zhao, CEO of Binance

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Binance chief Changpeng “CZ” Zhao suggested that users are more likely to lose crypto by keeping it in a cold wallet than by putting it on a centralized exchange.

For most people, for 99% of people today, asking them to hold the crypto on their own will end up losing it, he said in a Twitter Space chat on Wednesday.

The exchange founder, who was speaking hours after news broke that he had told his staff to prepare for a bumpy few months, said his company was neutral on whether users wanted to hold their own crypto or put it on an exchange, but suggested the practicalities make self-custody unrealistic for many.

Most people aren’t able to back up their security keys; they will lose the device, he said. 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. And also today, very basically, if a person dies, they have no way to give to their loved ones. While we have standard operating procedure [for that].

CZ added that people who are technically able to hold crypto securely should do so, but said the practice has its own problems.

I always try to educate people to understand that there are risks, he said. Holding your own crypto in your wallet is not without risk; I actually think more people lose money holding their own crypto loss when holding on their own than on a centralized exchange.

“As usual” at Binance

The collapse of Binances rival FTX and subsequent revelations about its financial situation has caused a resurgence of the not your keys, not your coins slogan in the community.

The phrase refers to the idea that crypto stored using anything other than your own unique personal keys is not technically yours.

This week, Binance saw billions of dollars withdrawn from its platform as investor confidence was shaken by the continued fallout from the FTX meltdown. CZ insisted that business was business as usual.

He added that the arrest of FTX founder Sam Bankman-Fried was having an effect on market sentiment.

With the arrest of Sam Bankman Frieds, I think people are generalizing. So if you get hurt by one bank, you’re going to think all the other banks are bad. If one politician is corrupt, you think all politicians are corrupt, he said. But the point is, just because one bank is bad doesn’t mean all the other banks are bad. And just because one politician is bad doesn’t mean all other politicians are bad.

When asked if he would appear in DC if asked to testify before Congress, CZ said he was trying not to travel to the United States in order to emphasize the separation between Binance.com and the Binances US operations.

I am also very busy visiting many other countries […] I am not against traveling to the United States; I think the United States is great […] I like the place, but you know, I’m busy with my other priorities.

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