CZ Calls For Private Trading Infrastructure Following Web3 Market Manipulation
Binance co-founder Changpeng Zhao unveiled plans for a dark pool perpetual swap decentralized exchange in early June 2025. According to CoinTelegraph, CZ addressed structural gaps in Web3 trading infrastructure through an opinion piece published on the platform. His proposal came after a trader known as James Wynn lost nearly $100 million in liquidations on Hyperliquid, where public visibility of trading positions may have enabled coordinated attacks against his leveraged Bitcoin positions.
The former Binance CEO outlined how current decentralized exchanges expose large traders to front-running and maximal extractable value attacks. CZ stated that traditional finance uses dark pools ten times larger than transparent markets to protect institutional trades. He argued that crypto markets lack this protective infrastructure, leaving wealthy traders vulnerable to manipulation through visible order books and liquidation levels.
Why Private Trading Infrastructure Matters
Large-scale crypto trading faces unique risks due to blockchain transparency. Every transaction appears on public ledgers, enabling observers to track wallet movements and predict trading strategies. CoinTelegraph reported that CZ believes exposing $1 billion orders creates opportunities for front-runners to exploit price movements before trades complete.
Institutional investors require sophisticated execution methods similar to traditional markets. The James Wynn liquidation demonstrated how visible leverage positions invite coordinated market manipulation. When liquidation levels become public knowledge, groups can collaborate to push prices toward these thresholds, forcing premature position closures. This transparency creates a fundamental mismatch between crypto's mature market participants and its outdated trading infrastructure.
Current over-the-counter desks and peer-to-peer swaps cannot adequately serve institutional needs. These solutions often suffer from limited scope, high slippage, and inefficient execution. The lack of privacy-preserving alternatives deters sophisticated players who expect discretion when entering or exiting large positions.
Industry Response And Technical Implementation
The crypto industry responded quickly to CZ's call for privacy-focused trading infrastructure. Analytics Insight noted that institutional crypto adoption reached new heights in 2025, with Bitcoin trading near $109,000 and investment firms showing increased confidence in digital assets. This growth amplifies the need for professional-grade trading platforms that can handle large orders without market disruption.
Technical solutions already exist to support CZ's vision. Zero-knowledge proofs and multiparty computation can conceal trading mechanics until execution completes. ThebitJournal reported that ZK-rollup technology processed 276 percent more daily transactions in early 2025, proving these privacy solutions can scale effectively.
Several projects have begun implementing dark pool features. The article noted that COTI launched PriveX, a privacy-focused perpetual DEX built on garbled circuits and intent-based trading. This demonstrates market demand for solutions that protect trader actions before execution while maintaining decentralized operations.
However, privacy-first trading creates regulatory challenges. Some officials worry that reduced transparency could enable undisclosed manipulation or money laundering. The industry must balance trader protection with compliance requirements to gain mainstream adoption.
Further Reading
For those interested in decentralized governance infrastructure, our comprehensive DAO tooling guide provides detailed analysis of over 100 platforms and tools used in decentralized governance. The guide covers voting mechanisms, treasury management, and coordination tools that complement privacy-preserving trading infrastructure.
