The recent collapse of QMMM, a US-listed firm embroiled in allegations of stock manipulation, has sparked renewed calls for stricter regulations within the realm of Digital Asset Treasury (DAT) companies. Changpeng Zhao, widely known as CZ and the founder of Binance, is at the forefront of this movement, advocating for mandatory third-party custodians and investor-audited accounts for firms managing substantial crypto reserves.
In a decisive statement on X (formerly Twitter), CZ emphasized the necessity of employing third-party custodians for all DAT companies, declaring that such measures would be prerequisites for any future investments from YZi Labs in BNB-affiliated projects. His assertion comes in the wake of QMMM’s extraordinary stock surge of 960% followed by an abrupt crash, raising serious questions about the integrity of companies operating within this sector.
QMMM made headlines in September 2025 when it announced plans to invest $100 million in leading cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), to establish a diversified crypto treasury. However, the joy was short-lived as the company faced scrutiny from the SEC, which accused it of engaging in manipulative practices, particularly through social media hype. The situation escalated when reports surfaced that QMMM executives had vacated their Hong Kong office, leading many to speculate that they had fled, leaving investors in the lurch.
This tumultuous narrative has painted QMMM as a cautionary tale within the crypto industry, underscoring the urgent need for enhanced transparency and accountability. Industry experts argue that incidents like this threaten the credibility of cryptocurrencies as a legitimate asset class, with CZ’s recent advocacy for custodial oversight seen as a necessary step toward rebuilding investor trust.
The QMMM scandal has ignited discussions about the vulnerabilities of companies managing large cryptocurrency reserves, particularly when lacking transparent audits or third-party oversight. Analysts assert that without robust safeguards, the crypto market remains susceptible to speculative manipulation, which could tarnish the industry’s reputation.
As the crypto landscape evolves, the call for stricter standards and oversight is increasingly resonating across the sector. CZ’s push for mandatory custodial audits may set a precedent, prompting other industry leaders to demand similar transparency from DAT companies. While this shift may introduce additional compliance burdens for firms, it is seen as a move that could significantly reduce the risks of market manipulation and foster a safer environment for institutional investors.
The QMMM fiasco serves as a stark reminder that despite the rapid growth and potential of digital assets, significant challenges regarding governance and trust persist in the industry. As the dialogue surrounding custodial audits and investor transparency intensifies, the future of crypto-treasuries may hinge on the community’s ability to implement effective safeguards that restore confidence among both retail and institutional investors.
