The CEO of leading cryptocurrency exchange Binance, Changpeng ‘CZ’ Zhao, has recently defended that the exchange holds customer assets backed one-to-one that it isn’t facing a liquidity crunch during a run on the bank.

Zhao said:

People can withdraw 100% of the assets they have on Binance. We will not have an issue on any given day. So 100% of users withdraw 100% of assets, we’d be fine

Zhao pointed out that cryptocurrency exchange’s business models are very different from the traditional business model banks use, which is relying on fractional reserves. Per his words, traditional finance professionals and regulators believe that exchanges can run on fractional reserves as well but “that is not okay.” He added:

In crypto, there’s no central bank printing money to bail out banks when there’s a liquidity crunch. So, crypto businesses have to hold user assets one-to-one and that’s what we do. It’s very simple.