Changpeng Zhao (CZ) said in a recent interview that the crypto market’s main problem today is not a lack of control, but too much of it.
According to him, blockchain combined with KYC data from centralized exchanges makes it possible to trace most transactions more precisely than any bank. Regulators simply do not yet fully know how to use this tool, but some jurisdictions, including the United States, have already become quite effective at it.
Salaries, Hotels, and Addresses
Zhao shared two specific examples that, in his view, clearly show the scale of the issue. If a company pays employees in crypto, anyone can take a single incoming payment, trace the sender’s address, and see how many other addresses were paid over the past week — effectively gaining access to the company’s entire payroll.
The second case involves paying for a hotel: if someone knows a person’s wallet address and the hotel’s address, they can determine in advance where that person will be staying, creating a direct security risk for certain individuals.
“Both scenarios are already technically possible today, without any hacks or data leaks,” he emphasized.
A Balance That Doesn’t Exist Yet
Zhao admitted that the optimal balance between transparency and privacy has not yet been found — neither by regulators nor by the industry itself. He did not name specific solutions, but pointed to a general direction: protocols should meet compliance requirements without exposing data that is not directly relevant to those requirements.
“The industry will gradually find a balance — the only question is how long it will take,” he said.
Notably, this view directly contradicts the common narrative that crypto is a tool for avoiding surveillance. CZ believes the industry is currently too transparent.
“This is a problem no less serious than the lack of regulation,” he stated.