Michael Saylor and Changpeng Zhao urge Traders to Self-Custody Their Crypto Assets

MicroStrategy co-founder Michael Saylor and Binance CEO Changpeng Zhao alias CZ have urged the global crypto community to self custody their digital assets amid increased uncertainty in the industry. Following the collapse of a top cryptocurrency exchange FTX, cryptocurrency traders are urged to withdraw their digital assets from exchanges.

CZ urged the crypto community through Twitter to avoid costly mistakes by choosing the right self-custody platforms. His stance was reiterated by Saylor, who said that some crypto firms are abusing the powers of holding users’ assets.

“In systems where there is no self-custody, the custodians accumulate too much power, and then they can abuse that power,” Saylor said.

Centralized exchanges (CEX) are now facing more scrutiny from global regulators reacting to the FTX collapse. As such, cryptocurrency traders are advised to keep off exchanges as more are likely secretly bankrupt.

Binance has remained the top crypto exchange globally by daily traded volume amid increased competition and a sustained bear market. Nonetheless, CZ has indicated that the company will continue to secure customers’ funds under cold storage. 

Additionally, the exchange has noted that it will fund promising projects affected by the FTX collapse. 

“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund to help projects which are otherwise strong but in a liquidity crisis,” CZ noted.

Future of Centralized Exchanges in the Crypto Industry at Risk

Centralized exchanges gained popularity with the rise of the cryptocurrency market in the past decade. However, cases of CEX collapse have been around since the days of Mt.Gox, which handled over 70 percent of globally traded volume during its demise. With the FTX collapse, blowback in centralized exchanges (CEX) has intensified in the recent past.

As such, most exchanges, including Huobi, Binance, and Bitfinex, have publicly published their balance sheet to reassure their customers. Nonetheless, the fear of centralized exchanges is not their balance sheet position but the risk of rug-pulling with customers’ funds, as experienced with FTX.

As a result, decentralized exchanges such as  Uniswap and PancakeSwap are expected to gain more traction in the future as adoption enters a new phase. According to market data provided by Coingecko, popular trends in the industry right now are Automated Market Maker (AMM) and derivatives.

Meanwhile, the crypto market has taken a sharp nosedive in the past few weeks, with Bitcoin price losing its $19k support level. The total cryptocurrency market capitalization has also declined significantly and currently stands at around $876 billion.