E187: Binance Founder: Nobody Realizes How Big The Next 10 Years Of Crypto Will Be

30:56And so that was in March, 2025. And so before that, I was discussing with my lawyers, et cetera. So I was just figuring out. and then through friends they recommended me the lawyer that handled Arthur Hayes and Ross Woobridge's pardon so I contacted the lawyer the same the same the same lawyer so I contacted the lawyer the lawyer says this is the process you submit a petition etc some of the other conversations are very privileged so I don't want to break privilege and then that's it really so you write a petition you submit I submitted my my petition in April 2025 so that's after Rob Arthur Hayes got pardoned.

31:36He got pardoned in March of 2025. So after this middle process, I believe I get updates from my lawyer, like, you know, bi-weekly, every two weeks, every month kind of basis. You're like, okay, we're still waiting. We're still waiting. Nobody knows when it's going to happen. Do you need to meet Trump at all? Or it's just a... I never met Trump. Never. So I never met Trump in person. I never had a phone call with him. I never had a talk with him. I never had an email. I never had a text exchange. I don't have his number. so yeah so I never met him the closest I got to see him in person was in Davos he was on stage I was in the audience we never shook hands we didn't say hi he would have no idea I was in the audience some people see the pardon as a proof that political influence matters more than justice what do they get wrong I think in my case well obviously my view is very biased but multiple people I'll let other people are judged.

32:33Multiple people have said I was wrongly treated and it should be justified. No one ever went to prison for a single violation of a Banking Secrecy Act. And in fact, I got charged, if you look at the situation today, right? So I got charged for not having a strong enough KYC program for in Binance. I never handled any transactions personally. I just don't do that. So I was never involved in any direct transactions. Everything was done through the system. They said, look at the system was not strong enough in terms of anti-money laundering. But right now, I think, look, this administration, based on everything I know they're discussing, I think polymarket, the international market, based on information I have, do not have KYC.

33:16The US market, the US platform have a KYC, but they just do geofencing for the international market. I believe that's what they're going to do for prep dexas. It looks like the discussions are, well, that's what they're going to do for prep dexas. So international perpdex, perpetual decentralized exchanges, may or may not need KYC. So again, different people have different opinions. My opinion on this one is obviously biased. I will let other people make their own judgments. So the argument here is that you were doing all these things that were very successful, kind of too early, and the regulation was not appropriate.

33:53And now they kind of have to do something for the perp dexes and prediction markets. Yeah. So now, while Binance had a... I got in trouble for Binance having not strong enough KYC, but these guys don't have KYC. At all, yeah. So they're basically allowing a free reign right now. If I was judged by the standards today, there's nothing I did. That's any problem. So again, but different times, different administrations, different focuses, et cetera. That's not for me to judge. you once I think it was 2022 2023 invested 2022 500 million dollars into Elon Musk acquisition of Twitter X now if Elon called you tomorrow and said CZ we're finally building X money and we're putting Bitcoin at the center of it what's the thing you tell him not to do um I don't know.

35:00I said, go for it. I don't think, I don't think, I know we're a pretty passive investor there. We don't, like, you know, I try not to tell Elon what to do or what not to do. I think he's a sharp entrepreneur. He's a strong entrepreneur to say the least. So I would say, yeah, go for it. That's great. That's great for our industry, for the crypto industry. How far do you think we're from something like that happening? Not far. I mean, I don't know, I read on X that there are already discussions about accepting stablecoins. And once you accept stablecoins, the next step to accept Bitcoin and Ethereum or BNB or whatever else is just literally one click away.

35:44We had Ben, Ben Zhu, the co-founder and CEO of Bybit on this podcast last year, just two days after the 1.5 billion hack they suffered. during the Bybit hack, you publicly suggested pausing withdrawals and Ben chose not to do that. Looking back, was Ben right and were you wrong? Oh, I think in this type of situation, there's no right or wrong. It's a judgment call. Ben obviously has much more information about this incident, about the situation than I have, right? So I don't like, no, he will have internal discussions with his tech team. He will have making his own assessments. The result is, okay, so that's fine.

36:27The fact that continued withdrawals didn't cause any more problems. My style, I would have taken a much more conservative approach. I would have said, like, pause withdrawals first. So what did you do in 2019 when Binance got hacked for$40 million? Yeah, so in 2019, in May, Binance got hacked for$40 million in one shot. and then the first thing I did is like pause all withdrawals and in fact pause all systems right so that's what you guys did that's what so I kind of in my head there's a there's a virtual big red button you press when when a security incident happens you press the red button first and you figure out what everything stops right and then you figure out what happens what happened and what the impacts are You don't, Toyota has this end-on cord, like anybody can compress it.

37:23So anybody, my view is anybody in an exchange platform should be able to press that red button, say, look, stop everything. And we have that, Binance kind of had that mechanism, at least back in the day. I'm pretty sure they still have it now. And then what, it's only when you analyze everything more, very certain than you turn things on slowly. It's an impact to trading continuity. There's some negative impact to customers, especially if you're on a futures platform. If the price moves, there are liquidations that should have happened, may not have happened, all of this other stuff. But that's better than, in my view, all of those things are secondary to a potential security risk of more money flowing out incorrectly.

38:05So I would have done that. In 2019, we paused withdrawals for one week. But we kept trading going on. So after a couple of hours, we resumed trading because we didn't want our prices to get out of sync with other exchanges. So we paused withdrawals for one week. The first couple of days, we looked at the system very, even the first few hours, we looked at the system very, very closely. We think we understood it, but I still took the more conservative approach for pausing for a week. Within that week, we also made so many upgrades to our systems. We changed the whole way the system was architected, actually.

38:44We actually went from server to serverless architecture. So there's no more servers, et cetera. So I won't get into technical details. But again, now you can say, well, Ben is actually right. Technically, there's no other further issues. So his judgment is fine. But in this kind of situation, it's always a very tough judgment call. I was just basically openly offering, say, look, it might be good. So in my mind, for him to pass withdrawals, he will face more pressure. In my mind, if I voice it, as we're a bigger player in the industry and people kind of view me as a bigger voice, it lends him more credibility to actually do it without so many customers complaining.

39:25So in my mind, I was actually trying to help him to get the sort of social credibility to be able to do that. So I had less customers be angry at him for that particular. So I was honestly trying to help him. So I was offering him a, I was suggesting a more conservative approach that will inconvenience the users a bit more, but will be safer. And so once I voice it, it will be easier for him to do it if he choose to. There will hopefully be less community backlash. He at least got support from me, right? So I was trying to help him, but he didn't take that approach, which is fine. There's no right or wrong.

40:05It's a judgment call. It's always a tough call in those kind of situations. Do you think that the outcome of the Bybit hack could have been drastically different if you followed your advice? No, not much. I think the hack happened once. So it's already happened. Whether you pause withdrawals, it would have been dramatically different if there was a secondary hack that happened. Luckily, there wasn't. So looking back right now, it's not a huge difference, but I don't understand. And there may have been other risks that, I don't know, usually it takes a couple of days to fully analyze everything, et cetera.

40:42And also they were using a third-party wallet service provider.

40:51And it's also clear the hack was in there for quite some time. So the way they changed the code for the UX, the code change was in there for some time. They only activated when they were ready, when the time was obtained for the hackers. So whether or not that's the right decision or not is really subjective. We can say a lot of what ifs, but that's not very valuable. A lot of people in crypto believe that Binance sees Hyperliquid as its first real competitor and that some of your public comments have been attempts to slow their momentum. What would you say to those people? No, they were wrong.

41:32I encourage way more crypto exchanges to innovate. And we view exchanges as helping to grow the pie. Because right now, number one, the market is nowhere near saturated. Penetration-wise, there may be like, I don't know, 5 % to 15 % penetration of people who have some kind of crypto. But net worth-wise, a very small percentage of their net worth is actually in crypto. So money-wise, value-wise, we're probably like less than 1 % penetration. And also, the current market size is not the future market size. The future fintech market size should be much bigger than the current fintech market size.

42:11So by all means, we're probably like 0.something percent penetration. And in this type of early stage, you want as many players as possible so that we can grow the industry. Also, there's a little bit of sense in the industry. The hyperliquid guys try to say the centralized exchange of the EVO. specifically Binance is evil, et cetera. And then they try to use that to get some people who are not happy with us to build their community. It's a fine approach. It's less competition. It is what it is. We're not against them. In fact, I openly tweeted about Hyperliquid getting, when Trump mentioned Hyperliquid, fantastic.

42:51That's great for the industry. And also what you've seen is hypercoin jumps, right? Every other coin follows. BNB went up. So why would we complain? Even Bitcoin went up, right? So I think it was immediately after that Trump speech that Bitcoin went up. The whole industry is more active now. So now we're kind of continuing the trend. I don't know. Hopefully that's the turn to break the winter. So many people have the wrong conception about how we view them. We welcome more decentralized exchanges. Also, my view is this. the pioneers of a field may not always be the biggest winners long term. So they have to go through a lot of, they do a lot of work, they do a lot of contribution, but sometimes they may not be fully optimized.

43:39So by the second, third generations, very often those platforms are better optimized. If you look at Google, they're by far not the first search engine. If you look at Facebook, not the first social media app. you look at Binance, it's by far not the first centralized exchange. So even if you look at Uniswap, there are other DEXs which are comparable in volume. So just because there's a first mover doesn't mean they always win. I'm not against them. I actually really want them to pioneer. I don't know what they did in the US. That's great. That's actually great for the industry. So I root for them.

44:20I'm not against them. We are not against them. So some of the community may actually want to attack us, but we're not against them. We welcome everyone with open arms. And also today in the industry, the more of prep decks is, the more of those competitions, the better. It's better for the industry. So we've got to take a bigger view. Even though I'm a large shareholder of Binance Centralized Exchange, we're also investing so much in the ecosystem. I'm a large BNB holder too, right? So when the industry grows, BNB value grows, it's not just about the centralized exchange. The centralized exchange is only a part of my portfolio.

44:58And also in my view, growing the industry is much better than growing a single platform. What does HyperXCRE do better than Binance today? Well, they don't have KYC. It's a small step.

45:17yeah we had jeff yan the founder of hypergrid on this podcast yeah uh for the hype token launch it was about two years ago why is the hype token still not available to buy on binance spot when it's one of the best performing asset over the last two years up about 25x and in the top 10 yeah so uh when when hype was happening, I already stepped away from Binance. I no longer manage Binance. So I don't know what the specific situation is. But my understanding is for a long time, Hype token wasn't circulating. Now it probably is. For a long time, it wasn't really circulating. It was like basic control on their own chain, et cetera.

45:58I think initially, my understanding is initially some of the central exchanges who are listing Hype had to keep Hype in their blockchain or in their infrastructure, in the hype's infrastructure. Whereas Binance probably wanted the assets to be on Binance, right? So this is to protect against counterparty risk. If that project goes away, Binance at least will have the tokens to... So I think Binance has that policy that Binance has to hold the tokens. I think today that may not be a problem anymore, but I don't know what the situation is. We mentioned the FTX collapse before. that sent the crypto industry in a long bear market in 2022, 2023.

46:38There's another event that happened last year that sent the crypto industry in another bear market, 1010, the 10th of October, 2025, which sent most altcoins to zero or almost zero within minutes, creating the largest liquidation event ever in crypto. Every financial crisis has its villain. 2008, it was the banks. After FTX, it was SBF. and after 1010, we had a surprising number of people choose Binance. Why do you think the market wanted a VLAN and why did they choose you? Yeah, I think why? I'll answer the why first and then we'll analyze the situation a little bit deeper. I think it's very clear one of our competitors heavily promoted the story that it was Binance causing the problem.

47:29In fact, the price changes happened on that particular exchange first. And the sequence of events were roughly, Trump announces a tariff. President Trump announces a tariff. Stock tanks, crypto tanks. And then there were some, I believe there were some small issue, technical issue on Binance with one of the stable coins. What's the name? ENS or whatever the name is. Right. but that's a very small stable coin. It's not even USDT. It was the USD from Athena. Yeah, it was Athena. Yeah, yeah. So it's not even like USDT, USDC, right? But I think there was some small issue there, but that's not the cause of the 1010 crash, right?

48:19And then, of course, it's Binance. So all the media is like Binance. And then Cathie Wood said something that, one of her podcasts or interviews, she says, oh, Binance cost it. Because she just read the news and is not really aware? I think it was just an offhand remark from her. She didn't think too much about it. And the Chinese media picked it. And this Chinese competitor who runs the centralized exchange picked it up, tried to amplify it very heavily. I did a podcast with Kathy Woods later. Kathy Woods openly, in that podcast, if you can search it, you can, Kathy Woods honestly said, she does not think Binance cost the entire crash.

48:59She just mentioned that Binance had a technical issue that contributed or was part of the crash. So in a crash, there's many, many triggers. But if you look at the timeline, and also Hasib from Dragonfly clearly, she posted a picture on Twitter. If you look at the timeline, Trump announces tariff, prices started to go down, and Binance has an issue much later. And I believe Binance did have an issue with the, what's the stablecoin? USD. Not USD. I don't know the project name anymore. But it's not a major stablecoin. The market cap is super small. So the market cap was like, no, the single digit billings, right?

49:44So people want a villain. So people want to attack. And then this also combined with people lost money, et cetera. So Binance actually, Binance took out about$800 million compensating users who had suffered losses on its platform where it didn't have to, right? So there's no obligation for Binance to do that. But Binance did that on its own will. But that kind of got washed away. Everyone wants to focus on the negative. But the people who stayed on Binance understand that, right? So you see all those negative narratives. You look at the market share. You look at the deposit inflows and outflows.

50:20During all of those times where people were talking badly about Binance, there was net inflows to Binance. So people are still depositing more money to Binance. So I think you can look at the community narrative, which can be bought, which can be influenced. But you look at the money. The user of Binance know that Binance didn't cause that problem. They were depositing it to Binance while that's happening. And Binance market share did not drop at all. yeah did you did you tweet the number four uh no would you have i usually tweet a number four when there's a when it's like a traditional media like you know one of those big news is the right negative article when it's community like there's so many different uh this uh what is small media or like community members uh a couple kols who may or may not have accepted money to tweet stuff you know we have many kols that send me that send me screenshots like people were offering them 20k to just say bad things about Binance for one month.

51:17Right? If you search around, there's many KOLs who will offer like 20k, 50k to say bad things about Binance. You know, some of those guys may have said bad things, but it's not enough for me to say four. Quick shout out to the legendary team at Jupyter, the DeFi super app. Anything you want to do on chain, from trading to earning yield, you can just use Jupyter. Personally, I'd recommend getting the Jupyter wallet on either your phone or your laptop. 10 times faster and 10 times cheaper than the competition. You're gonna love it. Thank you to the awesome team at Athena for backing today's conversation.

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52:39helps the entire industry. I spend a lot of time with Easy Labs investing in, and 70, 80 % of our investments are still in the Web3 space. I worked with a lot of founders. I was in Bhutan, the Easy Labs demo day. Very strong projects, actually. We're a very strong cohort. And then, yeah, and I spent some time on GIGO Academy. Whether Binance is there or not, I would just do what I can. I don't think Binance affects that decision that much. what are you optimizing the most in life for now uh positive impact uh so i think uh positive impacts makes people happy if you know that you're contributing and helping others it makes you happy intrinsically um i think we're genetically engineered to to do that so uh anything that's positive impact uh i wish uh so the way i think about it is like what can i do that's the maximum positive impact I can do, right?

53:37I don't have a specific number or a goal or a target, et cetera. It's just I want to do my best. If I've done my best, if my abilities are high, I would do more. If my abilities are little, then I'll do a bit less. But as long as I did my best to make positive contributions, then I'm happy. What does positive impact look like to you today? What's the best thing you can spend most of your time on for positive impact? I think short-term is like, no, helping different countries with their crypto regulatory frameworks to help become more innovation-friendly, more positive while protecting consumers, etc.

54:12That's more tactical, more short-term. Longer-term, I actually think GIGO Academy is probably the highest positive impact. It's free education for everyone around the world. And it's growing very quickly. So at the beginning of the year, so we've only been added for like a year and a half, close to two years. And then at the beginning of 2026, it was only reaching 100 ,000 kids, but now it's 1.3 million kids. So it's less than like seven months. The growth is exponential. So yeah, I think actually think that's long term. If you look at 10, 20 years out, that's going to be a huge positive impact.

54:53You mentioned Giggle Academy and education. you have kids and before we talked about them not become degenerates i talked to a lot of founders who have a lot of means and who have very young kids and i asked them what are you doing with your kids in terms of education or how do you plan to educate them and most of them say i don't know on education i have a few thoughts which are also contrary and potentially very controversial. I think that today, the education system wants to produce the average person, average predictable kind of factory worker type of person. Nothing against factory workers.

55:38I think, no, I respect any way to make money. But I think in tomorrow's world, we're living in a world that's hyper-competitive. So if you're a developer, you're competing with, I don't know, 10 million developers in the world. You've got to be the top 1%, hopefully 0.1%. If you're in that echelon of developers, then you probably make 10x money than the top 1%. If you're 0.1%, you're probably going to make 10x more money than the 0.2 % range. So just being 0.1 % better, you're probably going to make 10x money. So you've got to be really good at what you do. So that requires specialization. But today's schools are, if you're good in math and bad in English, spend less time on math, more time on English and bring to the average.

56:21I mean, you want to have proper language skills, right? So you want to be able to get by. But you want to get by in most other subjects to have a level of balance, but you want to specialize in one thing that you're good at, like very few things that you're good at. So that's number one, my view. Number two is I believe the teacher system is hugely expensive and not very good. There are some really good teachers, but the average quality of teachers is low because teachers don't get paid enough. Teacher salaries are too low. So the smart people, the really capable people, they're entrepreneurs, they're like bank executives.

56:58The average salary for teachers in the US is$30 ,000 a year. That's the highest country in the world. Every other country is lower. So the average quality is low. So now we basically have not the brightest people, well, the most capable people teaching our future generations. And it's also inefficient, right? Each teacher teaches 30 kids, 30, 50 kids. And so the whole education system is flawed in many ways. I actually believe that an AI-driven, app-driven, individual-tailored curriculum delivered through a digital platform is going to be much more effective if we do it right. And I think we can do it right with the technologies we have today.

57:45A digital platform or a robot that spends two hours or three hours a day with your kid and that understands them and that helps them one-on-one, personalize, develop? So whether it's a robot or an app, both are capable, in theory, capable of understanding the kid exactly as they are and adjust the curriculums and teaching content adjusting to the kid. A robot has advantages that you can do PE classes, potentially. It's also more of an in-person kind of dynamic. Teaching through an app has some disadvantages, even social interactions, etc. But we can potentially solve that problem by socialness of the app.

58:33We can get kids together with parents to increase their social interactions. we can organize offline PE classes or other events even through a digital app. Robots today, I think robots will be the future, but today the robots are still a bit clunky. They're not quite at a humanoid, like a human level. What we found is that kids want to interact with a human, like young kids. They like robots, but they understand it's a robot. They don't deal with robots the same way as they deal with a human. Whereas in the app, kids like to interact with an app. Or even in the app, what we found is for storybooks, we have AI-generated storybooks.

59:17Those actually don't get much reading. The kids just don't like it. Today, you can generate a story with one click. Just ask AI to generate a storyline, pictures, and then you have 20 pictures, 20 pages of a storybook. Kids don't like it. What kids like are people who design the story and they use some AI to help them generate images or some aspect of it is accelerated by using AI tools. Those do well.

59:48I think when the robot technology gets mature, you can actually have a full fidelity conversation with them, etc. Today, the robots are still a little bit clunky. So once the technology gets there, we'll use it. We'll experiment with it. But today, I think, and also robots are harder to scale from a delivery perspective, whereas the app is free to deliver. Once you build the app, it doesn't matter if it's 100 ,000 people using versus 1.3 million people using it. The cost, the marginal cost for us is zero, basically zero. And there's a little bit of extra cost. So the delivery scaling mechanism for a pure software solution is much higher.

1:00:28And that's what I know how to do, like building apps delivered to hundreds of millions of people. whereas robots they are hardware there's a bunch of other issues we're not quite I'm not quite ready to deal with them yet but when robots have good facial expressions can control them can have a high interaction high fidelity interaction with eye blinks when that technology is mature we'll definitely adopt it you mentioned before you said hopefully we're out of this bear market yep 25 % of the traders on Calchi think that Bitcoin will cross 100k before Jan 2027 you're known to be always bullish yeah on the 19th of august when bitcoin was around 50 60 or 64k you tweeted if you want the you two years later to appreciate what you did today then dot dot dot that was a clear hint at buying bitcoin then the market pumped like 20 percent right after in a couple of days does cc have the power to move the three trillion or so crypto markets i know So short answer is no, I do not have the power to do that.

1:01:35I've made so many bullish tweets. In fact, as you said, I'm always bullish. Every one of my tweets are bullish. I tweet like five times a day. So it's just that that tweet happened to be like five hours before President Trump made a speech about the crypto summit, et cetera. And I absolutely did not know that was happening. If I had known, I would not have made that tweet. So whenever I feel like I have any information advantage, I don't tweet about the information, right? But different people have said different things. I think so far, crypto followed the four-year cycles. And people said, calculate, you buy strictly four-year cycles, October will be the lowest.

1:02:19I said, well, let's not wait till October to make tweets. And I made that tweet actually when I was on the road. I was just kind of bored. my tweet like you know five times a day five ten times a day it's like well let's find another way to tweet a bullish tweet and i was actually reading a book um some book that um um somebody else made a quote if you want to if you want the future you to thank you today you got to act today right i forgot whose quote it is but i read that quote i was like okay i can sort of tweak this into a positive quote for like crypto etc so i made that tweet and then like god knows like five hours later, Trump says they're trying to bring hyperliquid into US.

1:02:58And that starts to, that starts like, no, that whole, that whole speech thing, not just, not just about hyperliquid, but the whole, the whole, the whole, the whole, the whole press conference was very positive. I didn't know that was, no, I didn't know. I didn't know any of those, those contents. Nobody told me, I didn't know. So yeah, but it's, if you tweet five, if you're bullish and tweet five times a day, one of the times you will be like five hours before a positive news. well for sure no one is complaining today no one's complaining today yeah everyone is up here thank you so much cc yeah for doing that that was awesome okay yeah thanks for having me yeah as you probably know by now i host some of the biggest name in bitcoin and crypto on my podcast but a lot of the best stuff never makes it on air the shift newsletter is where i share that raw behind the scene alpha the insights stories and lessons straight from my guests that you won't here anywhere else.

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