TLDR
- CZ demands third-party custodians for all Digital Asset Treasury firms.
- QMMM’s stock surged 960% before the SEC accused it of stock manipulation.
- CZ says investor-audited accounts will be required for YZi Labs investments.
- The QMMM scandal highlights the need for greater transparency in crypto.
Binance founder Changpeng Zhao (CZ) has called for stricter regulations on Digital Asset Treasury (DAT) companies following the collapse of QMMM, a US-listed firm accused of market manipulation. This call comes after the firm’s stock surged 960% before crashing, and its executives allegedly fled Hong Kong amidst an SEC investigation. CZ’s stance reflects growing concerns over transparency and accountability within the crypto industry, especially regarding companies holding large crypto reserves.
CZ Advocates for Third-Party Custodianship and Audits
Changpeng Zhao, the founder of Binance, has made a firm call for all DAT companies to employ third-party crypto custodians and undergo investor-audited account setups. CZ’s statements came in the wake of QMMM’s sudden rise and fall, which raised doubts about the integrity of some crypto-treasury companies. Zhao emphasized that this would be a mandatory requirement for any future investments from YZi Labs in BNB-affiliated DAT projects.
In a post on X (formerly Twitter), CZ stated, “All DAT companies should use 3rd party crypto custodians with account setup audited by investors. This is a prerequisite for YZi Labs investments in BNB DATs.” He stressed that without these safeguards, institutional trust in crypto projects would remain at risk. This move aims to enforce greater transparency and deter fraud within the sector, especially in the wake of QMMM’s controversial market behavior.
The Rise and Fall of QMMM: A Case for Transparency
QMMM, a company listed in the United States, made headlines in September 2025 with its announcement to invest $100 million in Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) to build a diversified crypto treasury.
Following the announcement, QMMM’s stock saw a dramatic increase of 960%, a surge that many analysts now view as suspicious given the company’s abrupt stock movement.
However, shortly after this rise, the SEC accused QMMM of stock manipulation, particularly through social media-driven hype. The situation escalated when reports emerged that QMMM had vacated its Hong Kong office. According to sources, this raised fears that the company’s executives had fled, leaving behind a trail of uncertainty and questions about the firm’s operations. This series of events has led to accusations of speculative deception, with critics pointing to the firm’s questionable practices as a cautionary tale for the industry.
Growing Calls for Accountability in the Crypto Industry
The collapse of QMMM has sparked widespread debate about the need for greater accountability in the crypto treasury space. Industry observers argue that incidents like these threaten to undermine the credibility of crypto as a legitimate asset class.
Many see CZ’s call for custodial oversight and audits as a necessary step to rebuild investor confidence and prevent further fraudulent activities.
The controversy surrounding QMMM highlights the vulnerabilities of companies holding large amounts of cryptocurrency reserves, especially when they are not subject to transparent audits or third-party custodianship. Analysts argue that without proper oversight, the crypto market risks attracting more speculative manipulation, damaging the reputation of the industry as a whole.
The Road Ahead: Industry Standards for Crypto-Treasuries
As the crypto market continues to mature, calls for stricter standards and oversight are becoming more prevalent. With CZ’s push for mandatory custodial audits, other industry leaders may follow suit in demanding greater transparency for DAT companies.
While this may introduce additional compliance requirements for firms in the space, the move is expected to help mitigate the risks of market manipulation and foster a safer environment for institutional investors.
The QMMM scandal serves as a stark reminder that, despite the rapid growth and potential of digital assets, the industry still faces significant challenges related to governance and trust. As the debate over custodial audits and investor transparency intensifies, the future of crypto-treasuries will likely depend on the industry’s ability to implement robust safeguards and restore confidence among both retail and institutional investors.
