BNB Treasury Firms Must Use Third-Party Custodians, CZ Warns

Binance founder CZ Zhao is urging firms with a corporate BNB treasury to use third-party custodians for their holdings, citing concerns about transparency and safety in the wake of the disappearance of QMMM, a crypto treasury firm. CZ also announced that BNB DAT projects seeking investment from YZi Labs must have their accounts audited by investors. The move aims to promote transparency and accountability in the cryptocurrency sector.

Binance founder Changpeng Zhao (CZ) has called for increased transparency and safety measures for firms with a corporate BNB treasury, following the recent disappearance of QMMM, a crypto treasury firm. In a post on X, CZ urged these firms to use third-party crypto custodians and have their accounts audited by investors. This move aims to promote transparency and accountability in the cryptocurrency sector, according to a CryptoTimes report.

The call to action comes after QMMM announced plans to invest $100 million into cryptocurrency reserves, including Bitcoin, Ethereum, and Solana. This investment caused the company's stock price to surge nearly tenfold within three weeks. However, the U.S. Securities and Exchange Commission (SEC) subsequently charged QMMM with possible manipulation of its stock price, leading to a short-term trading halt. Nasq also halted trading in QMMM Holdings.

CZ's warning highlights the importance of using standalone third-party crypto custodians and having account setups audited by investors. This is a prerequisite for any YZi Labs BNB DAT investment, according to CZ. The move aims to ensure that firms handling significant cryptocurrency reserves are subject to rigorous scrutiny and accountability.

The QMMM controversy has intensified calls in the crypto sector for increased protection for investors. The disappearance of QMMM has raised concerns about the lack of transparency and accountability in the industry. CZ's call for stricter safeguards is a response to these concerns and aims to promote a more secure and transparent crypto ecosystem.

As the crypto market continues to evolve, stakeholders should monitor developments closely. The adoption of third-party custodians and independent audits could become standard practice for firms handling cryptocurrency treasuries. This could help to rebuild trust and confidence in the industry, following the recent QMMM controversy.