CZ Warns of Hidden Risks in Acquisition of Crypto Exchanges

Binance founder Changpeng Zhao, better known as CZ, indicates that acquiring smaller centralized exchanges is far more complicated than it seems. His remarks come at a time when both BitMEX and BitMart announce they are ceasing their exchange operations.

Backdoors Left by the Previous Team

According to CZ, the greatest danger lies in the security that an acquired exchange inherits from the previous team. He states that after an acquisition, there is always a chance of a hack caused by old security vulnerabilities or backdoors left behind by the former team. The question then is whether such a hack stems from an old problem or a new vulnerability that emerged during the transition period.

CZ says that exchange acquisitions are still possible, but they require far more caution and diligence than other types of business takeovers. This makes it difficult for potential buyers to act quickly, especially in a market where exchanges such as BitMEX and BitMart are shutting their doors and users are looking for alternatives.

BitMEX and BitMart Wind Down Operations

BitMEX and BitMart both announce they are stopping their exchange services. BitMEX closes its doors on 23 September, while BitMart gives users time to withdraw their funds during a controlled wind-down. The departure of these two platforms raises questions about a possible wave of consolidation in the sector.

Platforms such as OKX are capitalising on the departure of BitMart and BitMEX by actively approaching their users with attractive offers. Whether other parties will pursue an acquisition rather than organic growth remains unclear for now. CZ’s comments make clear that such a step should not be taken lightly, given the complexity surrounding the security of acquired systems.