After FTX’s collapse, Binance CEO Changpeng Zhao is urging users to avoid crypto projects flashing five crucial red signals.
Zhao instructs his 7.4 million Twitter followers on what to watch out for while engaging in crypto-related endeavours.
“Aside from FTX, avoid companies/exchanges/projects that: 1) are not rewarding (musical chairs). 2) They sustain by the sale of their own tokens. 3) Offer strong inducements for locking your tokens. 4) having a substantial total supply but a limited circulation supply. 5) It entails loans.”
In addition, he recommends individuals who undertake such endeavours safeguard people’s investments by establishing an emergency reserve fund or a Secure Asset Fund for Users (SAFU).
After the FTX collapse shook the crypto markets, Zhao assures his followers that Binance is dedicated to transparency to reassure consumers and investors that they are on stable ground.
Zhao has earlier provided more guidance to individuals working in the crypto industry, stating that there are two main lessons to be learned from the aftermath.
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