CZ: All Hacks Can Be Prevented, Calls for an Industry Security Alliance

November 3 — Binance founder Changpeng Zhao (CZ), in an interview with Talking Tokens host Jacquelyn Melinek, offered his first public comments on the roughly $6.3 billion theft from Binance. CZ said "all hacks are preventable," that a long stretch without incidents breeds complacency, and that the incident carried many lessons. He believes the incident is not only a corporate security issue but has risen to the level of national security and global financial security, because tokenized stocks, RWAs and stablecoins have deeply bound the crypto industry to the traditional financial system.

CZ noted that AI is significantly accelerating the pace of attacks, with the frequency of crypto exchange hacks rising from roughly once a month to nearly once a week — "four happened yesterday." The AI industry has not yet managed to bring defensive capabilities to market ahead of offensive ones, so the industry can only "use AI to fight AI." He called on the crypto industry to form a security alliance to share best practices, carry out cross-audits and coordinate quickly on freezing funds, and said he hopes to push the alliance into reality. He also disclosed that he has not yet communicated with Trump or Washington on the matter, though he hopes to get help from the US government, and believes that perhaps only the US and China are capable of talking with North Korea.

On the market side, CZ said the crypto market's decline on the day of the incident was smaller than that of tech stocks, "which is almost unheard of." He attributed this to Binance stating immediately that user funds were safe and having the ability to compensate in full. He said less than 10% of the withdrawn funds flowed to other centralized exchanges, and since several hardware wallets were also attacked recently, some users, after comparing their options, deposited their funds back with Binance, which turned to net inflows on an hourly basis within less than 24 hours. Looking ahead, CZ believes that over the medium and long term AI will make crypto and software systems safer, and may even uncover vulnerabilities in blockchain software before quantum computing breaks encryption; at the same time, AI will drive trading speeds far beyond current levels, and the only financial technology that can support such speed is blockchain. He reminded retail investors to learn more about asset protection tools and to pay close attention to security developments.