The largest exchange in the world is cruising in the face of the carnage that has rocked the cryptoverse. As other crypto firms cut their losses, Binance is willing to aggressively expand its workforce and bail out troubled companies.
In a live interview with Yahoo, Changpeng Zhao, CEO of Binance revealed that the crypto exchange is holding up well despite the blistering crypto winter. He told the podcast’s hosts that Binance has “large cash reserves” and is in talks with up to 50 struggling crypto companies to help them survive the bear market.
Zhao added that apart from helping troubled firms, the exchange will be looking to increase the size of its workforce by adding 2,000 new staff before the end of the year. He argued that the bear market is perfect for hiring new talent because there is less competition from other firms offering “ridiculous salaries” for talent.
“We don’t have any debts,” said Zhao. “We’re still profitable and not that many people owe us money. We have pretty good debt control.”
Binance’s healthy balance is a move away from the realities of several crypto firms straining under the weights of falling asset prices. However, Binance’s financial position was not an accident as the firm was shrewd in its dealings during the bull markets. The exchange did not splurge on exorbitant marketing campaigns like buying the naming rights of sports centers or on Super Bowl ads.
Apart from showing financial restraint, Zhao disclosed that the exchange has a diversified income stream with stablecoins making up to 30% of the firm’s income which it relies on at the moment. “Many companies sort of expected that the bull market will continue indefinitely. Markets don’t do that,” he said.
Zhao stated in a blog post early in the month that the firm has a sense of duty to protect players in the industry. He said the firm had to bail out the struggling companies even though it offers “no direct benefits to us or we experience negative ROIs”.
However, he was clear to make a distinction between firms that are worthy of being bailed and those that should be left to die. Bad projects with no product-market fit and those that acquired users through excessive marketing or Ponzi schemes “should not be saved.”
“Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will,” said Zhao. He advised consumers to educate themselves to be protected from bad projects in the industry and employ proper risk management and evaluate the fundamentals.