Binance founder Changpeng Zhao (CZ) has called for stronger oversight of Digital Asset Treasury (DAT) companies. After allegations surfaced that the U.S. listed firm QMMM Holdings may have abruptly shut down and fled. The incident, described by Chinese crypto commentator AB Kuai.Dong as “the first micro-strategy company to run away.” It has reignited debate over transparency and custody standards in the growing DAT sector.
All DAT companies should use 3rd party crypto custodians with account setup audited by investors.
This is a prerequisite for any @yzilabs investments in any #BNB DATs. https://t.co/POsFWZqoJG
— CZ 🔶 BNB (@cz_binance) October 17, 2025
QMMM’s Rapid Rise and Collapse
QMMM Holdings, listed in July 2024, announced in early September. That it planned to invest $100 million into a cryptocurrency reserve holding BTC, ETH, and SOL. The news initially sent the company’s stock soaring more than ninefold within three weeks. But by the end of September, the U.S. Securities and Exchange Commission (SEC) suspended trading of QMMM shares. They cite suspicions of stock price manipulation through social media.
A recent Caixin investigation revealed that QMMM’s Hong Kong office, located in the Seaview Building, had been completely vacated. Specifically, nearby employees told reporters that the company had “moved out in September,” and its current whereabouts remain unknown. Furthermore, QMMM, registered in the Cayman Islands, had operated two subsidiaries in Hong Kong, namely Manymany Creations and Quantum Matrix. Both companies are involved in media and animation production. The company’s sudden disappearance and SEC probe have left investors questioning. Whether the firm’s supposed crypto reserve ever existed.
CZ Calls for Transparency and Custody Audits
Responding to the controversy, CZ posted that they should require all DAT companies to use third-party crypto custodians. Also, have their account setups audited by investors. He added that these measures are now prerequisites for any BNB DAT investment by YZi Labs. The venture arm is linked to Binance’s ecosystem.
CZ’s comments reflect growing industry concern over how DAT firms manage investor funds. They claim to hold digital assets on behalf of shareholders. The DAT model, popularized by companies like MicroStrategy. Which allows listed firms to manage crypto treasuries and issue shares tied to Bitcoin reserves. While the model has attracted attention, the QMMM case shows how the lack of audited custody. Additionally, the investor verification can create opportunities for misuse and deception.
Community Divided Over Custody Solutions
CZ’s stance quickly sparked debate across the crypto community. On one hand, some users backed his call for third-party audits, saying transparency in custody is key to preventing fraud and protecting investors. “Totally agree with this standard,” wrote DeepBrainFeng, adding that custody transparency “often determines how far a DAT project can go.”
Others, like w3tester, argued that companies could use multi-signature self-custody wallets instead, involving auditors and law firms as co-signers. This approach, they said, avoids depending too heavily on custodial services. This introduces additional counterparty risks. Another user, Trendverse, cautioned that smaller DAT firms could face rising compliance costs if forced to adopt strict third-party solutions. This, they warned, might stifle innovation and go against the decentralization ethos of Web3.
The Road Ahead for DAT Governance
The QMMM episode has exposed major gaps in how DAT firms are regulated and audited. Consequently, as companies are increasingly using the “Bitcoin treasury” model to attract investors, the industry standards for proof of reserves and custody are becoming essential. Ultimately, CZ’s call marks one of the first public pushes from a leading crypto figure to formalize oversight in this emerging niche.
Whether through custodial audits, multi-signature wallets or investor-led verification. The message is clear: DAT firms must earn trust through verifiable transparency, not just promises. Currently, QMMM stands as a cautionary tale in the new age of digital asset treasuries. Where unchecked hype can quickly turn into a headline grabbing collapse.