This article briefly:
· Binance CEO Changpeng Zhao has had multiple victories in 2022, while other crypto companies have capitulated.
· CZ was the catalyst for the downfall of former rival Sam Bankman-Fried.
Binance has launched several initiatives to help support the cryptocurrency industry during the bear market.
Binance boss Changpeng Zhao (CZ) became one of the last people standing at the Cryptocurrency Summit in 2022, notching several notable wins in a year filled with ugly crashes and sharp drops in cryptocurrency prices.
While 2022 has seen the collapse of several cryptocurrency companies, most notably FTX’s closure within a week, CZ has seemingly emerged as the industry’s savior, beginning to rescue struggling companies to prove that cryptocurrency has the momentum to succeed in the long run.
Consolidation of power after FTX incident
Changpeng Zhao made his mark at the crypto summit by catalyzing the downfall of rival crypto exchange FTX. Its former boss, Sam Bankman-Fried, now faces fraud charges in the United States.
A damning financial report shows that a large portion of the assets of Alameda Research, a crypto hedge fund closely associated with FTX, consists of FTX’s relatively illiquid FTT token.
CZ later tweeted that Binance would sell the FTT tokens it received from FTX after exiting its earlier position as an FTX equity holder. The announcement triggered a run on the FTX bank and became a turning point in the revelation of serious financial irregularities at the exchange that involved several executives, including Bankman-Fried.
The former FTX CEO faces two counts of wire fraud and six counts of conspiracy, including charges related to money laundering and violating political campaign finance policies. His fortune has reportedly been reduced to his last $100,000, marking a fall from grace for a man who Fortune once speculated could be the next Warren Buffett.
Binance sustains $1 billion in withdrawals following USDC FUD
Zhao also proved that Binance can withstand large-scale withdrawals after the exchange processed more than $1 billion about two weeks ago.
Concerned customers began withdrawing funds from Binance after CZ announced a suspension of USDC withdrawals until a U.S. banking partner opened. USDC is a stablecoin, a cryptocurrency whose value is pegged to a fiat currency through an algorithm or asset reserve. Customers withdrew $1.14 billion worth of crypto assets due to concerns that the exchange held assets in a different form than what customers deposited.
At the time, Zhao Changpeng called the surge in withdrawals “business as usual” and suggested that exchanges conduct regular stress tests to test their ability to handle large withdrawals.
Changpeng Zhao steps up support for troubled crypto firms
About two weeks after the FTX debacle, CZ and Binance also launched a $1 billion industry recovery fund to invest in crypto companies that are “facing significant short-term financial difficulties through no fault of their own.” Binance said the fund could potentially be expanded to $2 billion.
Several well-known companies have contributed to the pool, including Jump Crypto, Aptos Labs, and Animoca Brands. These participants can invest unilaterally or together in troubled companies. If the recovery fund remains sufficiently decentralized, it could lay the foundation for cryptocurrency self-regulation.
Disputed Proof of Reserves Report
When FTX collapsed, CZ called for more transparency into crypto assets on exchanges.
He later outdid several rival exchanges by authorizing one of the first Merkle Proof of Reserves audits to prove that Binance holds customer assets 1:1 and does not lend out customer funds like traditional banks. While the initial report covered assets related to BTC, Binance said more assets will be added in the future. CZ also listened to requests for future audits to include liabilities that reveal the health of Binance's balance sheet.
While audit firm Mazars said the report was an "agreed procedure" rather than an audit, it is still an important step toward setting industry transparency standards.
Binance launches Ronaldo NFT collection, topping BNB leaderboard
In the spirit of the 2022 FIFA World Cup, CZ recently celebrated the launch of an exclusive NFT series on Binance commemorating the career of legendary soccer superstar Cristiano Ronaldo.
The collection includes several computer-generated statues depicting Ronaldo’s football feats from his early career to the present day. In early November 2022, sales of Super Rare and Super Super Rare NFTs accounted for the highest seven-day transaction volume on the BNB chain.
Binance responded to the decline in interest in the NFT collection by marketing the Ronaldo collection through an expensive TV ad that aired in 74 countries during the FIFA World Cup 2022. Falling cryptocurrency prices have led to a sharp drop in crypto advertising investments since the beginning of the year, when FTX, Coinbase and Crypto.com ran ads to millions of people during the annual NFL Super Bowl event.