Binance founder Zhao Changpeng called the Terra project «very mismanaged», adding that the incident has led the firm to apply more scrutiny on operational risk for future listings.
Previously, Binance allowed users to stake or lend TerraUSD and sister token Luna to third party lending platforms with promised yields of nearly 20 percent prior to the collapse of the two cryptocurrencies. Since then, the crypto exchange has decided to apply more scrutiny to new listings.
«It’s a lot clearer to us, in hindsight, that the Terra project was very mismanaged,» said Binance founder Zhao «CZ» Changpeng in an interview with «SCMP». «Going forward, we would look at the operational risks of new projects in detail when we vet them for listing.»
Three Arrows
Elsewhere, more risk aversion was at play, particularly during the recent crypto market downturn that is triggering liquidity pressures at various players, most notably hedge fund Three Arrows which is reportedly exploring options such as asset sales or a bailout by another firm.
One such firm that was approached for a credit line was Binance itself, Zhao shared, noting that it was not the hedge fund’s primary trading venue.
«Compared to the last bear market in 2018, we are seeing more liquidity issues that tend to cascade across the market, affecting even larger players in the industry,» said Zhao, adding that Binance has been approached by many other firms in addition to Three Arrows. «This is due to the growth of DeFi staking and lending products.»
Forbes Acquisition
Despite the market troubles, Binance remains positive on crypto and continues to seek expansion including the launch of its latest campaign to hire 2,000 new jobs as well as acquisition opportunities.
On the latter, Binance is making minority investments into Forbes after a plan to buy the magazine via a special purpose acquisition company (SPAC) was shelved in late May. Binance originally earmarked $200 million of investments into the SPAC but will now wait for the deal to be restructured.
On top of diversifying its business, Zhao sees some synergies with Forbes through technology such as the issuance of non-fungible tokens of news articles that could be tradable on an exchange or the acceptance of crypto payments for subscription per article.
