CZ says crypto exchange acquisitions can inherit legacy security flaws, creating costly risks for buyers and users.
Buying a crypto exchange may look like a quick way to gain market share, but it can also bring hidden risks. Changpeng Zhao, widely known as CZ, believes security should be the first concern in any acquisition. His latest comments focus on dangers that often remain buried beneath a platforms public image. According to Zhao, weak security inherited from a smaller exchange can become a costly problem for the buyer.
Outdated Systems Could Become the Biggest Liability in Exchange M&A
CZ argued that acquiring an exchange means taking ownership of far more than its customers and trading activity. Buyers also inherit ageing systems, outdated code, and security weaknesses built over many years. Fixing those issues after a deal closes can demand significant time and money. In some cases, rebuilding parts of the platform may be cheaper than repairing existing infrastructure.
Earlier remarks from Zhao support that view. Back in February 2020, he said hackers often target smaller exchanges because they usually lack the same level of protection as larger competitors. Bigger platforms can devote more staff and funding to security, while smaller operators often work with tighter budgets and fewer specialists.
CZ: Poorly Secured Exchanges Could Pass Cyber Risks to New Owners
Several issues deserve close attention during any exchange takeover:
- Legacy software may contain flaws that attackers already understand.
- Older security practices can expose customer accounts and stored assets.
- Migration delays may leave acquired systems running longer than planned.
- Security reviews should cover infrastructure before customer funds are transferred.
CZ‘s comments arrive as mergers and acquisitions continue across the digital asset sector. Binance itself grew into the world’s largest crypto exchange after launching in 2017. Zhao later stepped down as chief executive in 2023 during growing regulatory pressure. His memoir, Freedom of Money, published on April 8, 2026, discusses Binances rapid growth and the legal challenges that followed.
Investors and traders should pay close attention whenever an exchange announces an acquisition. Questions about security audits, migration plans, and legacy systems deserve clear answers before assets are moved. While recent discussions around Zhao have often focused on regulation and future quantum computing risks, he believes inherited security flaws deserve greater attention today. Unlike distant technological threats, poorly secured systems can become immediate targets for attackers using widely available tools.