Former CEO of Binance, Changpeng Zhao (CZ), warned on Saturday that digital asset holders face risks if they accept cryptocurrency through other people’s private keys or hardware wallets. Sharing on the social media platform X, Zhao warns those people are nothing more than data backdoors that can lead to no one being able to use the possessed crypto wallets.
In his post, Zhao is worried about recent reports of people getting crypto from private keys or preconfigured hardware wallets, saying they are dangerous. Such are very bad ideas, warned Zhao, who also stressed that the actions carry great risks to the security of funds. He stated:
Recently, I have seen several instances where people receive crypto by receiving a private key or a hardware wallet. This is a bad idea.
Zhao’s Resignation Follows U.S. Federal Charges Amid Ongoing Regulatory Scrutiny of Binance
When some one has a private key or seed phrase, it opens a doorway for mal inline circle actors or fraudsters to steal funds, he said. Crypto recipients are asked to always take action immediately to protect their assets, he said.
They still have access to that crypto; the giver still has access to that crypto. The next thing you should do is move the crypto to an address that you own. Or, better, just tell the giver to send it to an address that you own, Changpeng advised.
That call to caution comes as that cryptocurrency industry is coming under the spotlight for security woe and difficult regulatory waters. It’s a cue of how important it is to protect the digital keys and wallet in an atmosphere where so-called crooks hackers swipe cryptocurrencies.
After he pleaded guilty to US federal charges, including anti-money laundering regulations and a civil complaint and broke out, he was removed as Binance’s CEO in November 2023. His resignation also came as a very big move to the company, which was under investigation by authorities.
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Zhao Plans Investment in Blockchain, AI, and Biotechnology After His Release
In April 2024, Changpeng was sentenced to four months in prison and sent off to a low-security facility; he was transferred to a halfway house in Long Beach, California, in April 2025. Changpeng says that the company, released in September 2024, will invest in new technologies, including blockchain, artificial intelligence, and biotechnology.
He may have scrapped with the company since Binance called it quits on Tomaso and has since handed the operation of Binance to Richard Teng. Binance’s CEO, who took over from Teng, now has a job: to help the crypto company find its way through all its regulatory woes. Provided all of this still exists, the Binance has remained one of the world’s major players in the global cryptocurrency market. Explaining the risks, Zhao said:
Having two people access the same key (or seed) is a bad idea. When those crypto move (or by a hacker), it’s almost impossible to prove who moved it (or got hacked).
Conclusion
Changpeng Zhao (CZ) that got warned cryptocurrency holders not to accept digital assets with private keys or hardware with wives given by others and to lose the funds. His advice was to move assets to a personal wallet or ask them to be sent to a controlled address directly for full access and security of the funds.
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FAQs
- Why is accepting crypto through a private key risky?
Zhao warns that sharing private keys creates security vulnerabilities, allowing hackers to steal funds. - What should I do if I receive crypto via a private key?
Move the crypto to a wallet you own or ask the sender to transfer it directly to your wallet. - What are the dangers of sharing private key access?
It becomes unclear who moved the crypto, making it hard to trace or recover stolen funds. - What is Zhao focusing on after leaving Binance?
Zhao is investing in blockchain, AI, and biotechnology after stepping down from Binance.
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