The chief of the world’s largest crypto exchange Binance has said no one can be protected from a “bad player” and called for more regulation of the sector.

Speaking at a meeting of business leaders in Bali on Monday after the collapse of Sam Bankman-Fried’s FTX last week, Changpeng Zhao did not name his former arch-rival but said the crypto industry “collectively has a role to protect consumers”.

“To be very frank, if a guy is very good at lying and is very good at . . . just pretending to be what he’s not, [if] somebody wants to violate the law, the law is not going to prevent that,” said Zhao, who is known as “CZ” in the industry.

FTX suffered an $8bn liquidity crunch after being inundated with withdrawal requests from customers. The $24bn personal fortune of Bankman-Fried, the 30-year-old boss of the exchange, has been wiped out and the exchange filed for bankruptcy on Friday, prompting contagion in the crypto sector.

“We do need to increase the clarity of regulations and the sophistication of regulations in the crypto space,” Zhao said, wearing a zebra-patterned shirt and neon yellow trainers.

He called on the industry to improve transparency and said that Binance would be “leading the way” to show proof of reserves. Other smaller rivals, including, OKX and Deribit, have also promised to publish proof that they hold sufficient reserves to match their liabilities to customers.

On Sunday, Zhao tweeted that people holding crypto assets should use TrustWallet, Binance’s official crypto wallet, where people can send, receive and store cryptocurrencies.

“Self custody [keeping crypto in your personal digital wallet] is a fundamental human right. You are free to do it at any time. Just make sure you do it right,” he tweeted.

Investors have been pulling out of crypto since FTX’s collapse. Bitcoin, the most popular cryptocurrency, has fallen 22.8 per cent in the past week to about $16,000.

Bankman-Fried tweeted on Friday that he had filed for bankruptcy with FTX.

“I’m really sorry, again, that we ended up here. Hopefully things can find a way to recover,” he said.

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