Founder and former CEO of Binance (CRYPTO: BNB) Changpeng Zhao, popularly known as “CZ,” said that “right now the crypto industry is too transparent,” warning that blockchain’s public ledger combined with exchange KYC data makes tracking user transactions alarmingly easy, while most regulators have yet to catch up on how to use it.

“It’s actually extremely easy to track crypto funds. The blockchain is a public ledger, and if you couple that with a few centralized exchanges’ KYC information, you can track most transactions pretty accurately,” Zhao said Friday on TBPN.

A Privacy Problem, Not Just A Feature

CZ illustrated the risk with a plain example: if a company pays staff in Bitcoin (CRYPTO: BTC), anyone can trace that wallet address and determine every employee’s salary. Similarly, paying for a hotel in crypto could expose a user’s physical whereabouts to anyone who knows their wallet address — creating real security risks.

The warning lands at an awkward moment for crypto’s payment ambitions. Venture capitalist Tim Draper has previously called for employees, suppliers and taxes to be settled in Bitcoin via smart contracts — a vision CZ’s transparency concern now directly complicates.

“There’s a lack of preserving privacy,” he warned, calling for an optimal balance between regulatory compliance and individual rights.

Regulation And The Road Ahead

During his appearance on TBPN, CZ also praised U.S. progress on crypto regulation but noted that stablecoin interest rate debates remain unresolved under the GENIUS Act. “Any clarity is better than none,” he said, adding that regulations rarely get everything right on the first try. On enforcement, he acknowledged that some U.S. agencies already use blockchain analytics effectively, but said most global counterparts still lag.

The regulatory picture is shifting rapidly. Coinbase Inc. (NASDAQ:COIN) CEO Brian Armstrong on Friday reversed his January opposition to the Clarity Act, backing the bill after a stablecoin yield compromise addressed industry concerns — signaling growing industry alignment on crypto’s legislative path forward.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.