CZ calls tokenized gold non-on-chain gold, is it a PAXG settlement liability?

Gold bull Peter Schiff plans to launch a tokenization gold product but was criticized by Binance founder Zhao Changpeng (CZ), who stated that tokenized gold is not “on-chain” gold, but just a “trust me, bro” token. While there is some truth to this, the community also questioned whether he is trying to deflect blame for the recent PAXG liquidation incident at Binance.

Saying the obvious. Most people “in crypto” know this, most people “not in crypto” may not understand yet.

Tokenizing gold is NOT “on-chain” gold.

It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe…

— CZ BNB (@cz_binance) October 23, 2025

Peter Schiff issues tokenized gold? CZ bluntly states it is not “on-chain” gold.

Gold bull Peter Schiff recently stated in an interview video that he will launch a tokenized gold product, allowing users to purchase gold directly through a mobile application. The gold will be stored in a vault, and users can easily transfer ownership of the gold to people they know or redeem it for physical gold.

In this regard, Binance founder Zhao Changpeng (CZ) stated that tokenization of gold is not on-chain gold. This is obvious, and most people in the crypto space are aware of this, but most people outside the crypto space may not understand it yet.

CZ explained that tokenization of gold means you believe that a third party will hand over the gold to you at some point in the future, even after changes in its management.

This is a “trust me bro” ( trust me bro ) Token. This is why there are no “gold coins” ( gold coins ) that truly take off.

Is CZ absolving responsibility for the PAXG liquidation event?

On October 11, 2025, during the “Lightning Crash” that swept through the crypto market, the traditionally stable gold was greatly affected in the crypto world, with tokenized gold PAXG plummeting 22% in an instant, triggering a wave of liquidations. This incident not only exposed the vulnerabilities of real-world asset (RWA) trading but also incited user outrage due to suspected interface failures on the Binance platform, leading the community to call for regulatory intervention.

(RWA is not equal to real assets! Looking at the risks of asset tokenization with PAXG decoupling )

CZ's remarks, while having their reasoning, have also led many to question whether he is shirking responsibility. @CryptoCarthaen even made a meme in response to CZ's tweet:

Whether you are going long or short, you will face liquidation!

Gold has risen nearly 60% this year and recently experienced its largest single-day drop since April 2013. Peter Schiff stated that these fluctuations are just noise, and Bitcoin's rebound presents an opportunity for “fool's gold” to shift towards physical gold! Bitcoin OG Anthony Pompliano suggested that investors convert their gold assets into Bitcoin, which has sparked considerable discussion on both sides within the community.

(Gold has plummeted from its historical highs, Peter Schiff: The rebound of Bitcoin is an opportunity for “fool's gold” to turn into real gold)

In this article, CZ refers to tokenization of gold as off-chain gold, questioning if it is a liability for PAXG settlement? This first appeared in on-chain news ABMedia.