Changpeng Zhao has been called out for tweeting what appears to be a trading recommendation. The Binance CEO advised followers to avoid shorting Binance Coin (BNB) last month, which, in hindsight, has been proven to be pretty poor advice.
Changpeng “CZ” Zhao, CEO and founder of the hugely popular digital currency exchange, Binance, has drawn flack for giving trading advice via Twitter. The tweet in question was clearly intended to promote the exchange platform’s launch of margin trading for its own native crypto asset, BNB.
Short, or Not to Short?
Posted on July 18, it reads:
“#BNB is available for margin now. But I don’t recommend shorting it, as you will get #REKT.”
At the time CZ posted the tweet, the price of Binance Coin was around $28.50 or 0.002912 BTC. Although BNB pumped slightly on the day of CZ’s post, it has been mostly trending down against both Bitcoin and the US dollar since.
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Today, Twitter user @DanDarkPill was quick to remind CZ about the tweet he made recommending followers not to short (bet against) his own exchange’s native cryptocurrency.
Today, the dollar price of BNB is $22.28, and the Bitcoin price is 0.235 BTC. Clearly, shorting Binance Coin against the recommendation of CZ was a highly profitable trade. Meanwhile, anyone who happened to use the CEO’s optimistic view of BNB’s future to influence a decision to margin long the cryptocurrency is much more likely to be “#rekt,” as CZ puts it himself.
Should the Binance CEO Hand out Trading Advice?
Whether the Binance CEO’s projection for BNB was correct or not is mostly irrelevant, however. His tweet still brings into question whether those in positions of authority in the industry should really be giving such trading recommendations. As a clear figurehead in the cryptocurrency space boasting 422,000 followers on Twitter, it seems irresponsible to be giving any trading advice whatsoever.
Given that CZ’s exchange platform directly benefits from a higher BNB price – the founding team has significant holdings of the cryptocurrency – surely it is even more questionable of the CEO to advise against adding selling pressure by shorting the digital currency. The Coinbase CEO also made a controversial claim over Twitter recently regarding money coming into the cryptocurrency space.
What do you think about CZ’s tweet? Do you think individuals in his position should be making such brazen trading recommendations? Comment below.
Images are courtesy of Twitter, Shutterstock.