Fortune Magazine Interview with Zhao Changpeng on Terra Incident Handling: According to Binance's investigation data, no charges can be confirmed yet.

Fortune magazine interviewed Binance founder Changpeng Zhao CZ on his views regarding the Terra incident. The following is a summary of the content:

CZ stated that the Terra incident was a disaster due to design flaws and operational errors. Terraform Labs did not react quickly enough and failed to use reserves when the detachment was not significant. It was only after it collapsed and lost about $80 billion that they attempted to recover with a $3 billion reserve, but it was too late.

CZ mentioned that he also expressed concerns or disagreements about Terra 2, although other exchanges remained silent. Choosing to snapshot early is equivalent to reversing many blockchain transactions, including many transactions after the crash, which is selectively favoring a few users. Creating a new blockchain does not generate value. However, CZ also believes that what's done is done, and there is no perfect solution.

CZ stated that the reason for choosing this new coin is that a large number of users hold this currency, and they still need to be taken care of. The most practical way is to provide liquidity for the new coin because when the new coin replaces the old one, the old coin will be worthless. Providing continuous liquidity and having people willing to buy it are reasons, and Binance also issued strong risk warnings to users. Although there was a period when the Terra blockchain was not functioning, Binance had suspended trading at one point, but due to many complaints, they had to take a neutral stance and continue services with warnings.

CZ also mentioned that if Terra 2 were to launch another stablecoin, they would scrutinize it more strictly. He also reiterated in this interview that he did not profit from early investments in Terra.

Do Kwon was revealed to be the figure behind the algorithmic stablecoin Basis Cash, with a history of failed operations, but CZ stated that he was unaware. He had not spoken to Do Kwon, and even during the incident, Binance's official attempts to contact were met with slow responses.

Regarding Basis Cash, CZ mentioned that it is best to be more cautious and conduct due diligence; however, anonymity is common in this industry, and there is still room for improvement in the review process when dealing with global development teams. Education on diversifying investments for retail investors is also crucial.

CZ stated that there are reports of South Korean regulatory authorities investigating Terra. Binance is not an enforcement agency, but they are willing to cooperate with investigations using various on-chain data in different countries. Regarding the Twitter account FatMan that specifically exposes Terra, Binance is monitoring and investigating, but based on current data, they cannot confirm or deny any allegations. They are actively monitoring and analyzing to respond promptly.

CZ mentioned that after this incident, people have a better understanding of the differences between algorithmic stablecoins and fiat-backed stablecoins, becoming more cautious about fiat-backed stablecoins, considering factors such as reserves, the bank involved, and audit acceptance. In a way, this is a good thing.

CZ also emphasized that all stablecoins, cryptocurrencies, and even fiat currencies carry risks. It is essential to ensure that everyone fully understands what they are holding before making decisions. "I believe financial literacy is the ultimate consumer protection."