Worse is—the other exchanges’ founders being quiet is their choice—but Terra itself, their own project team, was quiet for way too long and not frequent enough in their communications with users. So, I think all of those things went wrong. I've been vocal about it.

On the revival plan [by Do Kwon], I also voiced concerns or disagreements with some of the approach that was taken. I think, basically, they took a snapshot at a very early date. That's kind of reversing a lot of the transactions on the blockchain, and also reversing many of the trades that [were] done after the crash. You can't go back in time and only selectively take care of a few users. Starting a new blockchain, doing a fork, doesn’t create value.

It's not a great situation. But the community has voted, and it has passed, so that means that's what most of the community wants. I don't think there's any perfect solution.

We, as one of the largest exchanges, have a large number of users who have this coin. We still need to take care of those users. And the best way is actually to provide liquidity for the new coin, because the new one is going to replace the old one. The old one is going to become worthless. There's no more utility to it. So we still need to provide continuity of the liquidity. For that reason, we still have to list it, even though it's not a brand-new coin that we want to list. It's not an ideal situation, but considering all the user interest in mind, we still have to list it. There are people who may still want to buy it—I hope given all this news that's out there, they are aware of the risks. We have put up very strong risk warnings, we sent emails to users, and we've tried to do as much as we can to educate the new users about the risks. I hope that people who are buying know what the risks involved are.

There was a small period where we suspended trading [of UST and old Luna] only for a couple of hours [on May 12]. This is when the Terra blockchain was suspended [on May 12], and we said, “Well, if the blockchain is no longer working, we want to suspend trading so that we don't have a lot of weird speculations, etcetera.”

Even then, we got a lot of user complaints saying the guys who bought know that they took the risk to buy, even at low prices or high prices. If we stop the liquidity, then it causes problems for them. They could no longer trade. So in the end, we had to take the neutral stance and just provide a marketplace with very strong risk warnings.

Do you have any concerns for this new Terra chain? Or concerns that Do Kwon will create and launch another “stablecoin”?

In this case, we can view [the new Luna] as a continuation of the previous one, even though there's disruption involved. So we support it, because we need to provide continuity of liquidity to our users.

If there's a new stablecoin being issued, we will have to look at that new stablecoin as a brand-new project. Our listing team will evaluate it in a lot of detail. We will take into very clear consideration of everything that happened. The fact that the project team made design mistakes before [and] was slow in the operational response and hurt a lot of people already—we'll take that into full consideration.

I cannot make hypothetical decisions, but obviously, we'll take an extremely critical view of it.

There are two extremes: There are cases where people learn from their mistakes and do a good project later on. Most founders have failed startups. But at the same time, having a failure of this size will make us extremely suspicious of any new projects that come out of this team or get on this blockchain. So we'll have to evaluate when there's a concrete thing for us to evaluate, but obviously we will be extremely critical of it.

There was a lot of speculation about whether Binance made anything off this or dumped any coins. I know you’ve addressed this, but…

[Those claims are] inaccurate. Binance has been extremely transparent.

We invested in Terra as a part of a Binance Labs investment in 2018, and that was a $3 million investment. We received some Luna coins onto a [cryptocurrency wallet] address which we made public, and from the address, people can see that we actually never cashed out. We just kept the coins that we got, 50 million Luna. We just kept it there.

This is very similar to most of our investments. We are not short-term investors. We don't look at one peak and try to cash out. We invest long term. We invest in hundreds of projects; many of them fail, but that's VC investing. But we want to hold for like 10, 20 years. Our view is that if we don't hold for 10 to 20 years, we may miss some of the Amazons, the Googles, the Apples.

So we didn't dump this [Luna] on the retail users. And we didn't buy UST. All the decisions we're making are really for the community. We are not trying to recoup our investment. We view this as a loss. It’s a sunk cost. Also, some people accuse us of trying to make the fees of Terra UST trading—I actually didn’t know, but afterward, my team told us that we actually had zero fees for UST trading. So we actually didn't get any fees either.

In these kind of cases, when this kind of thing happens, my first reaction is not “What do we make?” or “What do we lose or not lose?” It’s “How are we protecting the users?” because we are a profitable platform. We're sustainable. We can sustain our losses. We invest in hundreds of projects; many of them fail. We can tolerate that. Our users may or may not be able to. We care much more about the users. We have the users’ trust. Hundreds of millions of users use us. We don't have to worry too much about ourselves if the users trust us. That's kind of our mentality and our thinking.

Many of the things I found out afterward, but we didn't make any money. Even today, theoretically we lost like $1.6 billion of investment at the top, and it’s okay.

When it came out that Do Kwon was reportedly involved with Basis Cash, another failed algorithmic stablecoin project, did you feel surprised?

I was surprised, to say the least. But more so, I was surprised that our team didn't know about this before.

For the record, I have never spoken to Do Kwon directly. Not even today. During the investment stage, I did not speak to him. Our investment team did all the talking with him. We have a very quick internal review process, which I'm part of, but I didn't have to talk to him. Throughout this incident, our team talked to him. He was quite slow in responding. I didn't want to—he actually reached out to some other friends, [saying] he wants to talk to me directly. I said “Look, I don't know all the history. I don't know all the details. Our team will handle it.” So I didn't speak to him personally, like directly—not even in a group call. Binance operates in such a way that our team handles this type of stuff.

But I was getting updates from our team. I was looking at the situation. I was telling our team to communicate with [Terraform Labs] with specific requests. [Do Kwon] needs to be more responsive. He was somewhat slow in responding to us, to Binance. We’re the biggest liquidity provider for him, and when we reach out, most other projects will always respond to us, and he was kind of slow.

We do have a common friend, one of his other investors, and he says [Do Kwon] wants to talk. I said, “Look, I already gave all my feedback through our official teams, and the team knows how to handle it.” I didn't want to start a separate channel where I have to personally manage him, etcetera.

So I was surprised. I never even had a Zoom call with him. I've never met him in person.

I understand a lot of crypto projects are anonymous or pseudonymous, and it isn’t necessarily a bad thing, but did this situation with Do Kwon and his reported connection to Basis Cash make you feel like Binance should have more protocols in place when assessing a project?

I think we should definitely do a better job in terms of due diligence.

There’s types of background checks. I'm not sure if it will uncover everything, if people want to hide their identities, etcetera. There are projects who go by anonymous founders. Bitcoin is a good example of [where] anonymity actually helps. But we need to do more of this type of due diligence.

Because we live in different countries, in different geographic regions, [we have] different background checking processes—it’s not just one country. Some of those processes don't work as well. If the guy doesn't disclose himself, we may or may not be able to uncover that. But I did ask our team, I said, “Look, we got to do much better DD process.”

I think having me personally involved in the process will not help. Even if I just have a Zoom call with them, I am not going to be able to say, “Hey, this guy’s the founder of Basis [Cash].” I don't know everybody in the industry. Most people think I know everybody.

The truth is, we invest in a hundred different projects over the last couple of years. If I talk to all of them, that's going to be 100 meetings—I still got our own business to run. We have relatively strong teams that generally select good projects. But once in a while, you will have one of these projects that go wrong.

I do think the process should be improved, and we have many lessons to learn. But fundamentally, not every one of these types of situations can be avoided.

We need to increase our educational effort to the retail guys to say, “Look, when you get involved, don't just put all your money in one basket just because the [annual percentage yield] returns are high.” I think that's also a very key part.

There’s a lot of allegations coming out involving the Terra ecosystem, especially from the Twitter user called “FatManTerra.” Most allegations haven’t been proven, but as the Korean government reportedly investigates Do Kwon and Terraform Labs, what’s your forward-looking plan in terms of how Binance will evaluate what products come out of that team?

I did see FatMan’s Twitter thread, which is quite interesting. I am not sure how much of it is true or false.

There's a bunch of other exchanges, people, projects involved in that thread, but luckily, Binance is not in there. Regardless, we actually asked our team to look into all of those allegations. Within Binance, we have an investigation team. We're not law enforcement, but we have a lot of data. We look at the blockchain data. We look at other things. We also work with law enforcement in almost every country. We work with them closely. Because they ask us for a lot of help in a lot of cases, when we ask for help, they usually help us too. We also hired many ex-law-enforcement people on our team. So now they’re ex-colleagues talking to each other.

I did ask our team to look into each one of those allegations by FatMan. I said, “Look, based on the data that we have, if we can draw any conclusions, we should share that with law enforcement.” To date, we cannot confirm or deny any of the allegations.

But we should help the community to track bad behavior down and stop it. So, we do that type of analysis.

Obviously, we will follow all the developments very closely. If there's any developments, we will respond very quickly.

We want to debunk any myth that happens, and we want to follow it very closely. I hope that the other players, especially exchanges, should follow as well, because [as] exchanges, we’re the platform. We have many different types of users on our platform. We need to balance the interest, and we need to stay very neutral. We need to be transparent.

On Tuesday, a day after Fortune spoke with CZ, FatManTerra posted a thread about Binance.US, the U.S. partner to Binance.com, stating the team has a “weak” due diligence process and security measures, among other allegations. Binance declined to comment on those claims.

Binance has its stablecoin, and I know that algorithmic stablecoins are very different from fiat-backed stablecoins, but after the collapse of UST, investors may rightfully be hesitant to invest in stablecoins regardless of type. Do you think the space will recover?

I think there's good and bad things about this instant.

A lot of people got hurt, but a lot of people are looking at stablecoins much more closely. So now, I think we have way more people who understand the difference between the algorithmic stablecoins versus fiat-backed. And even with fiat-backed stablecoins now, people are asking a lot more questions, like, Where's the reserves? Which bank? Is it audited or not?

I think that a lot more people understand that now and understand the difference, which is actually a good thing in some senses. At the same time, I think we still want to stress that all stablecoins have risks—well, actually, all coins, even fiat currencies, have risks. I think we just need to educate more people about the risks, and nothing's without risk.

We have to make sure that people understand what they're holding so they can make correct decisions on how much to diversify, how much to invest, how much to hold, etcetera. I think that financial literacy is really the ultimate consumer protection. As industry players, especially as exchanges, we do need to be very careful about what coins we have available on our platforms. It's unfortunate but in this new industry, we do want to encourage innovation, so sometimes this still happens.

This story was originally featured on Fortune.com