CZ Says Crypto Theft Impact Depends on Who Covers Customer Losses

Crypto thefts should be measured by whether an exchange can absorb customer losses, CZ said, arguing that a headline dollar figure alone does not show the damage to users or the broader market.

In a post addressing debate over the scale of Binance’s $6.3 billion theft and Bitcoin’s price reaction, CZ said the incident was the largest measured in dollars but not by the amount of Bitcoin (BTC) involved. He pointed to Mt. Gox, whose collapse involved 650,000 BTC, more than 5% of the Bitcoin supply at the time.

CZ said the impact also depends on how many customers are affected and how large a share of their holdings is exposed. He said nearly all users and their assets were affected in both the Mt. Gox and FTX events.

For customers, he said, the core issue is whether a platform can cover losses fully or leaves users to bear them. CZ called the Binance incident a major disaster for the industry, Binance and himself, but said the exchange could withstand the shock. He said protecting users was the priority.