Binance co-founder Changpeng Zhao “CZ” Warns Against Crypto Exchange Acquisitions

Over the weekend, another crypto exchange, BitMart, announced that it would wind down its operations after what it described as a “careful evaluation.”

While the company did not elaborate extensively on the reasons behind its decision, the announcement adds to the list of crypto exchanges and companies that have shut down in recent months.

Against this backdrop, larger players in the industry have increasingly been exploring mergers and acquisitions to expand their presence, acquire customers and enter new markets. However, CZ believes exchange acquisitions carry risks that many companies may underestimate.

What CZ Said on Crpyto Aquisitions?

The BitMart development came shortly after Arthur Hayes-led BitMEX also announced that it was winding down operations, highlighting the challenging environment facing some players in the crypto exchange business. The closures come at a time when regulatory scrutiny remains high, competition has intensified and companies are reassessing their long-term strategies.

Responding to ongoing scenario of closures and acquisitions, Zhao said acquiring a smaller centralized exchange is not the same as buying a conventional business. While such deals may appear to offer a quick route to growth, they often come with significant hidden challenges.

According to CZ, an acquiring company could end up inheriting legacy security issues.  This includes potential hacks, old backdoors or other vulnerabilities that may not be immediately visible during due diligence. These risks, he suggested, make exchange acquisitions considerably more complex than they may seem on the surface.

Crypto M&A Hit record High in Q2 2026

CZ’s warning comes at a time when consolidation in the crypto sector is accelerating. According to Architect Partners, the industry recorded 71 merger and acquisition transactions worth $12.9 billion in the second quarter of 2026. This makes it the second-largest quarter for crypto M&A on record.

The period saw several high-profile deals, including Coinbase’s acquisition of Deribit and Bullish’s $4.2 billion acquisition of Equiniti.

Among the recent deals, Japan’s SBI Holdings acquired a South Korean crypto exchange Coinhako as part of its expansion strategy in APAC region.

The contrasting trends of exchange closures on one hand and acquisition activity on the other also reflect the changing dynamics of the digital asset industry. While some companies are choosing to exit the business amid difficult market conditions, others are betting that consolidation will help them scale more efficiently.

CZ’s remarks suggest that companies should approach such opportunities with caution rather than viewing acquisitions as an easy path to growth. Beyond acquiring users and trading volumes, buyers must also evaluate the target exchange’s technology, security infrastructure, operational history and potential liabilities.