Former CEO of Binance, Changpeng Zhao (CZ), warned on Saturday that those holding digital assets face risks if they accept cryptocurrency through someone else's private key or hardware wallet. Sharing on the social media platform X, Zhao warned that those people are nothing more than data backdoors that could make it impossible for anyone to use the compromised cryptocurrency wallet.
In his post, Zhao expressed concern about recent reports of people receiving cryptocurrency from private keys or pre-configured hardware wallets, stating that they are dangerous. These are very bad ideas, Zhao warned, who also emphasized that these actions pose significant risks to the safety of funds. He stated:
Recently, I have seen some cases of people receiving cryptocurrency by obtaining private keys or hardware wallets. This is a bad idea.
Zhao's resignation comes after federal allegations in the context of Binance being closely monitored.
When someone has a private key or seed phrase, it opens the door for scammers or fraudsters to steal money, he said. Cryptocurrency recipients are advised to always act immediately to protect their assets, he said.
They still have access to that cryptocurrency; the donor still has access to that cryptocurrency. The next thing you should do is transfer the cryptocurrency to an address you own. Or better yet, just have the donor send it to an address you own, Changpeng advises.
This cautionary call comes as the cryptocurrency industry is under scrutiny due to security issues and tough regulations. This is a sign of the importance of protecting digital keys and wallets in a context where so-called hackers are stealing cryptocurrencies.
After pleading guilty to federal charges in the United States, including anti-money laundering regulations and civil complaints, he was removed as CEO of Binance in November 2023. His resignation was also a significant move for the company, which is under investigation by authorities.
Zhao plans to invest in Blockchain, AI, and Biotechnology after being released.
In April 2024, Changpeng was sentenced to four months in prison and taken to a low-security facility; he was transferred to a jail in Long Beach, California, in April 2025. Changpeng stated that the company released from prison in September 2024 would invest in new technologies, including blockchain, artificial intelligence, and biotechnology.
He may have severed ties with the company since Binance ceased cooperation with Tomaso and has since transferred Binance's operations to Richard Teng. The current CEO of Binance, who took over from Teng, now has one job: to help this cryptocurrency company figure out how to overcome any legal difficulties. As long as all of this persists, Binance remains one of the largest companies in the world in the global cryptocurrency market. Explaining the risks, Zhao said:
Allowing two people to access the same key (or seed) is a bad idea. When those codes move (or by hackers), it is nearly impossible to prove who moved it (or was hacked).
Conclusion
Changpeng Zhao (CZ) has warned cryptocurrency holders not to accept digital assets with private keys or hardware wallets gifted by others and risk losing money. His advice is to transfer assets to a personal wallet or request direct transfers to a controlled address for full access and security of funds.
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