Binance Co-Founder Says DAT Firms May Require Third-Party BNB Custody and Investor Audits After QMMM Controversy

• Third‑party custody is mandatory for meaningful asset security

• Investor‑audited account setups and independent audits improve transparency and reduce manipulation risk

• QMMM’s $100M crypto reserve announcement triggered regulatory scrutiny after a near tenfold stock surge and SEC/Nasdaq trading halts

Digital Asset Treasury safeguards: CZ urges third‑party custody, investor audits and independent checks after QMMM controversy — learn key protections and steps now.

The Binance Co‑Founder recommends third‑party custody and audits for Digital Asset Treasury firms following the QMMM Holdings controversy.

Published: October 18, 2025. Updated: October 18, 2025. Author/Organization: COINOTAG.

Digital Asset Treasury (DAT) firms are under renewed scrutiny after the Nasdaq‑listed QMMM Holdings episode. Binance co‑founder Changpeng Zhao (CZ) publicly urged industrywide safeguards, arguing that standardized third‑party custody and investor‑audited account setups are essential to prevent market manipulation and protect stakeholders.

What are the recommended safeguards for Digital Asset Treasury (DAT) firms?

Digital Asset Treasury safeguards center on three pillars: use of standalone third‑party crypto custodians, investor‑audited account setups, and independent technical and financial audits. These measures increase transparency, reduce single‑party control over reserves, and provide verifiable evidence to regulators and investors.

Why did industry leaders call for these measures after the QMMM Holdings incident?

QMMM announced plans in September 2025 to invest $100 million into cryptocurrency reserves including Bitcoin, Ethereum and Solana. The stock surged nearly tenfold within three weeks, prompting the U.S. Securities and Exchange Commission (SEC) to halt trading between September 29 and October 10, 2025 while investigating potential manipulation. Nasdaq also suspended trading on October 11, 2025.

Regulatory filings showed opaque corporate operations and vacated Hong Kong offices, raising concerns about governance and operational readiness to manage large crypto treasuries. Market participants and experts pointed to these facts when urging better custody, audit and disclosure standards.

How should third‑party custody and investor audits be implemented?

Adopt a multilayered approach: select an independent, regulated crypto custodian for wallet key management and segregation of duties; publish an investor‑approved onboarding checklist that documents account setup steps; and mandate periodic on‑chain attestations and independent financial statement audits. Short, verifiable attestations (for example monthly) combined with periodic deep audits create both operational security and audit trails for regulators and investors.

Frequently Asked Questions

What is a third‑party crypto custodian and why is it important for DAT firms?

A third‑party crypto custodian is an independent entity responsible for safeguarding private keys and digital assets on behalf of a client. Custodians reduce single‑point control, provide insurance or coverage mechanisms, and offer verifiable controls that mitigate misappropriation or operational failure.

How can investors verify a DAT firm’s account setup and reserves?

Investors should require documented account‑setup audits, independent attestations of wallet addresses, regular on‑chain balance proofs, and certified financial audits. Natural language descriptions should be supplemented by machine‑verifiable statements to support voice search and assistant responses.

Analysis and Evidence

Key facts cited in this reporting: QMMM announced a $100 million cryptocurrency reserve plan in September 2025 and its stock experienced a rapid, nearly tenfold rise within three weeks. The SEC halted trading September 29–October 10, 2025, citing possible manipulation, and Nasdaq suspended trading on October 11, 2025. Reporting draws on public SEC filings and Nasdaq notices as primary factual sources (SEC filings; Nasdaq statements). Industry commentary includes a public post by Binance co‑founder Changpeng Zhao on October 17, 2025.

Key Takeaways

• Mandatory third‑party custody: Segregated custody reduces concentration risk and improves investor protections.
• Investor‑audited setups: Documentation and independent verification of account setups deter opaque practices and manipulation.
• Regular independent audits: On‑chain proofs and financial audits provide continuous transparency and support regulatory compliance.

Conclusion

The QMMM Holdings episode illustrates structural risks when corporate governance, custody and transparency are insufficient for large crypto treasuries. Industry leaders including CZ and entities such as YZi Labs highlight third‑party custody, investor audits and independent attestations as foundational safeguards. DAT firms and investors should prioritize these measures to strengthen market integrity and reduce regulatory risk. For ongoing coverage and developments, follow updates from COINOTAG and consult public SEC and Nasdaq filings for primary documentation.

Also Read: Bitcoin Falls Below $108K as Crypto Market Fears Extreme Selling

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TAGGED: Binance, Changpeng Zhao (CZ), QMMM Holdings, YZi Labs, SEC, Nasdaq