Changpeng Zhao, the CEO of Binance, spoke with CNBC on June 9 and gave some of his ideas on leveraged products.
Binance’s CEO was asked what the company does about the impact of leveraging products on individuals who don’t understand how to use them.
This software, for example, will ask individuals certain clear questions, and if the person answers the questions poorly, they will be barred from using leveraged items. If a person loses money on a leveraged product, the trading software prevents that person from trading for a set period.
Zhao was also questioned if he believes it would be better to abandon leveraged products, given that most individuals will almost surely lose money on them and that doing so would bring more stability. The CEO then stated that he does not believe it is required.
According to Zhao, leveraged goods exist not only in the crypto market but also in traditional markets. He said that leveraged products are also utilized for specialized purposes such as liquidity, price discovery, and hedging and that leveraged products are widely regarded as a tried and true financial instrument.
When asked how long he believes the present bear market will persist, the CEO said he had no idea. He said that these cycles recur every four years on average, but just because something happened in the past doesn’t indicate it will happen again.