CZ requests audit of DAT company after QMMM poaching allegations

Binance founder Changpeng Chao (CZ) called for stronger oversight of digital asset treasury (DAT) companies. This comes after suspicions surfaced that QMMM Holdings, a listed U.S. company, may have suddenly ceased operations and fled the scene. Chinese cryptocurrency commentator AB Kuai.Dong described the incident as “the first small strategic company to escape.” This has reignited the debate over transparency and storage standards in the growing DAT field.

The rapid rise and fall of QMMM

QMMM Holdings announced in early September that it would go public in July 2024. The company plans to invest $100 million in crypto reserves holding BTC, ETH, and SOL. The company's stock price initially soared more than nine times within three weeks on the news. However, by the end of September, the US Securities and Exchange Commission (SEC) suspended trading in QMMM stock. They cite suspicions of stock price manipulation through social media.

A recent Caixin investigation revealed that QMMM's Hong Kong office in the Seaview Building was completely empty. Specifically, a nearby employee told reporters that the company “moved in September,” and its current location remains unknown. In addition, QMMM, which is registered in the Cayman Islands, operated two subsidiaries in Hong Kong, Manymany Creations and Quantum Matrix. Both companies are involved in the media business and anime production business. The company's sudden disappearance and SEC investigation have investors wondering. Whether the company's cryptocurrency reserves ever existed.

CZ demands transparency and custody audit

In response to the controversy, CZ posted that all DAT companies should be required to use third-party cryptocurrency custodians. Also, have the account setup audited by the investor. He added that these measures are now prerequisites for YZi Labs' investment in BNB DAT. The venture arm is linked to the Binance ecosystem.

CZ's comments reflect growing industry concerns about how DAT companies manage investor funds. They claim to hold digital assets on behalf of shareholders. DAT model. Popularized by companies such as MicroStrategy. This will allow listed companies to manage their crypto assets and issue stocks tied to their Bitcoin reserves. Although this model has gained traction, the QMMM case shows how custody audits are lacking. Additionally, investor authentication can create opportunities for abuse and deception.

Management solution for fragmented communities

CZ’s stance quickly sparked debate across the crypto community. However, some users supported his call for third-party audits, saying that transparency in storage is key to preventing fraud and protecting investors. “I completely agree with this standard,” DeepBrainFeng wrote, adding that storage transparency “often determines how far a DAT project can go.”

Others, like w3tester, argued that companies could instead use multi-signature self-custody wallets, with auditors and law firms participating as co-signers. They said this approach would avoid over-reliance on storage services. This creates additional counterparty risk. Another user, Trendverse, warned that smaller DAT companies could face increased compliance costs if forced to adopt strict third-party solutions. They warned that this could stifle innovation and go against the decentralized spirit of Web3.

The path forward for DAT governance

The QMMM episode revealed major gaps in the way DAT companies are regulated and audited. As a result, companies are increasingly relying on “Bitcoin treasury” models to attract investors, making industry standards for proof of reserves and custody essential. After all, CZ's call marks one of the first public efforts by a major crypto industry figure to formalize oversight in this emerging niche market.

Through custodial audits, multi-signature wallets, or investor-driven verification. The message is clear. DAT companies need to earn trust through verifiable transparency, not just promises. Currently, QMMM serves as a warning in a new era of digital asset vaults. Unchecked hype can quickly turn into a headline-grabbing collapse.