Crypto▼ Bearish
CZ warns buying a crypto exchange means inheriting its security flaws
The former Binance CEO says acquirers underestimate the cost of fixing legacy vulnerabilities from smaller platforms. His memoir released April 8.
Continue with
Changpeng Zhao, the founder of Binance, warned this week that buying a smaller crypto exchange means taking on its security problems. The cost of fixing those problems, he said, often exceeds what acquirers expect.
Zhao argued that when a larger platform acquires a smaller one, it does not just gain users and order books. It inherits outdated code, compromised infrastructure, and security practices built by a small team under resource constraints. Smaller exchanges are targeted by hackers more often because their defenses are weaker, he said in past comments that resurfaced around the release of his memoir.
Security is not a feature added after a deal closes. It is embedded in architecture decisions made years earlier – in the database schema, key management protocols, and credential storage. Remediating those issues can cost more than building from scratch, Zhao said.