tl;dr
Binance's CZ urges stricter safeguards in digital asset treasuries after QMMM's $303 stock collapse, as SEC probes market manipulation and investors demand transparency in crypto-linked corporate reserves.
**Binance Founder Calls for Stricter Safeguards in Digital Asset Treasury Sector Amid QMMM Scandal**
Binance founder Changpeng Zhao (CZ) has sounded the alarm on the need for stricter safeguards within the Digital Asset Treasury (DAT) sector, following the collapse of QMMM, a U.S.-listed company accused of market manipulation and fleeing its Hong Kong office. The incident has reignited debates about transparency and accountability in corporate crypto investments, with CZ urging immediate reforms to protect investors and restore trust.
### The QMMM Scandal: A "Runaway Microstrategy"
QMMM, a firm that once promised to build a $100 million cryptocurrency treasury, became the center of a scandal that has left investors reeling. The company’s stock surged over 960% after announcing plans to invest in Bitcoin, Ethereum, and Solana. However, the meteoric rise was short-lived. The U.S. Securities and Exchange Commission (SEC) later accused QMMM of manipulating stock prices via social media, while reports revealed the company had abandoned its Hong Kong office, raising suspicions of financial misconduct.
The fallout has been severe. QMMM’s stock, which once hit $303 per share—a 560-fold increase from its 2024 public offering—collapsed to $0.54. The SEC halted trading after uncovering artificially inflated volumes and evidence of Reddit-driven hype manipulation. The company’s founder, KWAI Bun, a former Hong Kong TV personality, has faced scrutiny for his abrupt pivot from entertainment to crypto finance.
### CZ Demands Custodial Oversight for DAT Firms
In a post on X (formerly Twitter), CZ called for mandatory third-party crypto custodianship and investor-audited account setups for all DAT companies. This requirement would apply to any investments by YZi Labs, a Binance affiliate, in BNB-affiliated DAT projects.
“All DAT companies should use third-party crypto custodians with account setups audited by investors. This is a prerequisite for YZi Labs investments in BNB DATs,” CZ wrote. His comments underscore a growing push for accountability in the BNB ecosystem, where companies manage digital assets as part of their treasury strategies.
The move comes as the crypto community condemns QMMM as a textbook case of speculative deception. Pseudonymous X user *The Master Builder* described the firm’s tactics as “pumping the headlines and dumping the truth,” highlighting how the company’s hype-filled narrative lured investors before its collapse.
### Industry Reactions and Lessons Learned
The QMMM scandal has been labeled a cautionary tale by analysts, drawing parallels to the 2021 meme-stock frenzy. Industry experts warn that the incident exposes the risks of unchecked leverage and retail hype, particularly in the DAT space.
CZ’s intervention signals a broader shift toward institutionalizing safeguards in crypto-linked corporate reserves. By advocating for third-party custodianship and transparency, he aims to prevent fraudulent schemes from eroding trust in the sector.
### A Divided Crypto Landscape
The QMMM fallout reflects a growing divide between genuine corporate crypto adoption and speculative imitations. While some companies are leveraging digital assets as a legitimate treasury strategy, others exploit the market’s volatility for short-term gains.
As the dust settles, the incident serves as a stark reminder of the need for discernment in crypto investing. In bull markets, where hype often outpaces fundamentals, accountability and transparency may be the ultimate hedge against fraud.
With CZ’s call for reforms, the industry faces a critical juncture: whether to prioritize innovation or safeguard the integrity of its most vulnerable corners. For now, the QMMM scandal stands as a cautionary tale, urging stakeholders to balance ambition with responsibility.