CEO of Binance discusses the importance of exchange centralization

Source

For those who don't follow Binance's official Youtube account CZ CEO of Binance was answering some interesting tweets that people left him. One of those questions was related to centralized exchanges and CZ talked about their relevant role in 2022.

When asked about decentralized finance better known as DEFI CZ answered in his own words "Today, we still need centralized systems to integrate with the traditional financial industry so that we can deposit and withdraw money from cryptocurrencies".

And that's because as I mentioned recently giving out the scam of the year awards there have been a number of very painful rugpulls for investors. CZ believes this is not going to change anytime soon so centralization plays an important role in preventing scams and ponzi schemes from further damaging the crypto ecosystem.

CZ also assures that it has no favoritism when it comes to the projects that are listed on its platform. Binance currently has about 700 projects listed and only a very small number of the projects that come up on a daily basis will ever get listed on Binance.

This filter made by centralized exchanges is important for investors to be able to invest with the security that the project where they put their money will not run away with the money from one day to the next.

We can also highlight the amount of things that Binance has done to be a centralized exchange according to the rules and regulations of each country. Although it was not always like this since in its origins Binance intended to be more decentralized, and did not have central headquarters to regulate the exchange but that could slow down its growth in different countries. Despite its efforts, it has not fared well either, as it was recently fined in Turkey for not complying with certain anti-money laundering regulations.

Binance's growth has been high, as it currently has 90 million users. And although Binance last year implemented mandatory KYC for all its users, it has not lost dominance against other centralized exchanges.

CZ also talked about the importance of avoiding using exchanges that do not have KYC implemented, such as DEFI projects. One of the compelling reasons for this is customer support where it is either non-existent or very inefficient.

While these statements are controversial and to some extent contradictory to the crypto spirit, it is undeniable that a paradigm shift in DEFIs is urgently needed to protect investors because lately there have been a significant number of scams and rugpulls that harm the ecosystem.

Thanks for reading. I would appreciate an upvote and rehive.