‘Bad’ crypto projects should not be bailed out says Binance founder CZ
Binance founder and CEO Changpeng “CZ” Zhao argues that “bad” crypto projects should be left to fail and not receive bailouts from crypto firms with healthy cash reserves.
In a June 23 blog post, CZ said that firms that have been poorly operated, poorly managed or have released poorly designed products shouldn’t receive bailouts — and should instead be left to crumble:
“Further, in any industry, there are always more failed projects than successful ones. Hopefully, the failures are small, and the successes are large. But you get the idea. Bailouts here don't make sense,” he added.
The comments come amid recent moves by crypto billionaire Sam Bankman Fried and his firm Alameda Research to bail out companies and projects with recent liquidity troubles such as Voyager Digital with a revolving loan of 350 million USD Coin (USDC) and 15,250 BTC, which is worth $464.48 million at time of writing.
CZ went on to note however, that Binance could look to support some cash-light firms that either have “problems but are fixable” or are “barely surviving but have great potential.”
“Many projects have come to us who want to engage and talk. Again, in real life, these categories are not clear labels. All projects view themselves as the third category, and we need to look at each project in detail to decide. There is some subjectiveness to it,” he said.
A number of firms are undergoing liquidity issues as a result of the current bear market, while others are reeling from exposure to potentially insolvent firms and projects such as Three Arrows Capital and Celsius.
Related: Cristiano Ronaldo to get football fans into Web3 with Binance partnership
The comments from the Binance CEO echo similar sentiments from U.S. Securities and Exchange
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