Changpeng Zhao tells employees that the bailout of its chief rival is ‘not a win’

The near collapse of FTX has “severely shaken” confidence in the crypto industry and will trigger tougher scrutiny by regulators, Binance chief Changpeng Zhao said a day after orchestrating a rescue of the exchange’s rival.

“Regulators will scrutinise exchanges even more. Licenses around the globe will be harder to get,” Zhao wrote to staff early on Wednesday.

The two men shocked the crypto industry when they announced on Tuesday that Binance had agreed to rescue FTX after a surge in customer withdrawals sparked a liquidity crisis.

In the aftermath of FTX’s near failure Binance and other larger exchanges have pledged to publish more proof that they hold their customers’ funds in secure reserves that are readily available to meet withdrawals.