All-In Podcast — Binance CEO (CZ): 4 Months in Prison, $4 Billion Fine, and What Comes Next

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Yeah. the the two managements were just clashing and then um uh the the same partners went to do a different company uh called building two um but now this partners the I didn't get any money but the partners got quite a bit of money now so they rented a very fancy office um that company only lasted a year uh it means that previous success doesn't guarantee future success in fact um so uh they spent a lot of money had a very nice office but has zero zero zero revenue so that folded within a year and that's 2001 and um so uh and early 2001 I was looking for new jobs and then Bloomberg was hiring and this is right before 911. Um I kind of got an offer before 911 and then 911 happened. I still haven't moved and then where was this to New York or this was in well I was still in Tokyo back then and then Bloomberg is in New York. The offer I was supposed The offer was in New York.

The offer was in New York. So after 911 I called Bloomberg say hey is the job still there? Do you still want me to go?

And they said well do you still want to come? I was like yeah okay. So then I went. So I went to New York in November of 2001.

Wow. What was that like?

The streets were pretty quiet. Um Yeah.

And uh but you know I was fine. I was you know um New York is a is New York was quiet for a few months but it became lively pretty quickly I think. So I didn't feel too much uh issues.

Um um so I then went to New York and worked at Bloomberg for four years doing exact again the same thing. You're kind of a salary guy. You're working at a big company, salary, bonus, maybe some options or some phantom equity or something like that.

Yeah. So, um I joined as a senior developer. Uh I was put into a team called uh tradebook futures. They just formed this team uh and uh they had a system that allowed people to trade futures on Bloomberg, but it wasn't it was like spread out. So, they collected that into into into one into one team and still no inkling of like that entrepreneurial bug.

Not really. back then I was like nah I I worked what were you looking for stability like why like why Bloomberg being in New York like what was it I was just a young guy I was like I think I was like 24 20 24 25 okay so I was just a young guy trying to get a job you know uh experience different parts of the world and get and and just find my way through um I I knew I wasn't experienced enough to do entrepreneurship myself right so I was and I I was working a small company in Tokyo the company only had like 200 Bloomberg at the time had about 3,000 people. So to me that was a big company.

Yeah.

And they fancy offices, fish tanks and free food and everything. Um so I joined as a senior developer. I got some good bosses. I got promoted three times in two years and then I was leading a team of 60 initially and then kind of grew to about 80 people. Um and that's when I became sort of a manager. Uh I no longer wrote code and I started the worst transition.

The worst transition. Right. The worst.

So um so that's kind of my Bloomberg experience. Yeah. So that and I Yeah. So I had to stay there for four years.

And then you quit and moved to China.

Yes.

How does that happen?

I think was wrong like uh beginning of 2005. Um again the same uh friends I had I made in Japan, they were talking about starting a new company, a new uh fintech company and they were in Asia, right? So they're talking about Tokyo, Shanghai or Hong Kong. And they said Shanghai is most likely the most happening place for the future of fintech. Um we should have picked Hong Kong. Hong Kong had a lot more happening since then.

Um, so I went there in 2005. So the it was like five foreigners from a Chinese perspective. U five Caucasians, four Caucasians plus a Japanese plus me. I'm the only one who speaks Chinese and my Chinese was kind of rusty back then too.

So the six of us went there to do a new IT start startup in Shanghai.

You So all you guys just land there and what was the idea? So we thought you know we have all this Wall Street experience on Wall Street trading technology experience.

So your other friends had they moved to New York or no they were still in Japan doing their own thing.

Two of the friends were in New York with me and then um uh the other three were from Japan right they were there they always they were so the six of us came together and uh we wanted to do we want our idea was uh let's bring the wall street trading technology into China so we can service the brokers and exchanges in China. Um but then so we went they rented a very fancy office again. Uh wait okay so hold on just so when you guys start this company this so this is now your first entrepreneurial you're like okay let's do this pretty much did you know to even ask the question like okay guys what's our equity split what's the cap table did you know any of these things or you're just like great let's go do it I'm just assuming it's one sixth we're equal like how how did it all it wasn't one6 it was like the top guy had like I don't know 39 40% and the the the rest five of us split equally so I had about 11% % or so.

Okay.

So, I knew that, but I didn't know like, you know, all the ins and outs about, you know, shareholder rights, uh, what terms. I didn't know any of that.

Yeah. Preferred versus common, none of it.

And then I You're like, great, I got 11%. I'm moving to Shanghai.

Yeah. So, I just have 11%. I didn't I have no idea what common stock is or versus preferred. So, uh, just went and then but so I was a junior partner in this group. And then, uh, once we landed in China, I start because I speak Chinese, right? So, I began talking to potential clients. I went to talk to brokers. I found out we are registered as a wholly foreigner owned uh what we call wolfie uh holy holy foreigner owned enterprise.

Yeah.

The Chinese brokers and financial institutions are not allowed to work with a wolfie.

That's right.

U so we found out after we started a company while we were in Shanghai and so the company pivoted towards doing um uh any any any IT system for any for any company. We can be like work for hire.

Work for hire. We can be fix deote. You became deoid. uh not not even deoid we can be fixing printers or we can be writing like you know SAP implementations for you we did all of that so there's a whole spectrum of things and so we did that for a few years and we actually made a living for a few years yeah for for for a few years like uh and we made a living out of that yeah we we started we had a quite a number of automotive clients uh the Shanghai General Motors uh Shanghai Works Wagon uh Shanghai first auto mo uh first automotive they were all clients of ours and like maybe three or four years in uh we started having offices in Hong Kong and then we were dealing with a Morgan Stanley, Deutsche Bank, Credit Swiss.

So it grew so it was it was successful.

The company is still around. The company is still around. So I I left in 2013 after 8 years. Um but the company is still around.

So in the eight years you worked at that company all in Shanghai.

I was mostly in Shanghai, but then I spent quite a bit of time helping to set up the Hong Kong office and then I was also doing quite a lot of work for some clients in in Tokyo.

How big did that company get? I think even you got to about 200 people again and it's kind of stayed there for as for as as far as I know even till now.

And so as a junior partner you just take profits and you share it like Yeah. Yeah. So uh uh well actually I we didn't take that much profits. Um I actually invested most of my savings back into that company and I actually didn't cash out a penny. Um but wow after a few years the company was uh s stable enough to pay the partner salaries that all of our kids go to international school. So we get a we get a we get a six figure salary.

At that point you had gotten married.

Yes. Yeah. So at that point uh uh Yeah.

So at that point I got married when I was in New York. So like uh Yeah. So and then u uh Yeah. So we I had two kids.

And you had met your ex-wife. How?

Yeah. I met her I met her in in in Tokyo when I first went to Tokyo. So I met her in 1999ish um when I when I was first in Tokyo like doing the interns.

Okay. And then um uh she visited me in New York and then you know we got married and then uh we had kids now we are separated or we're divorced in Shanghai. I had young kids and you know it was enough salary to put the kids into into international school and that was that was good enough for me.

Wow.

Yeah.

So far again nothing here tells anybody that you're about to go and start Binance.

No no nothing nothing. No I didn't know. So then 2013 2014, how old were you then at that point? You were uh 20 2013 I I would be 36.

Yeah. Mid-30s.

Yeah. Yeah. So So again, salary guy.

Yeah.

Junior partner at this thing. It's going well. Your kids are in private school.

Yeah. Yeah.

So then what happens?

So then uh I came across Bitcoin, right?

So um well, one of my friends tells me, "Look, see, you got to look at this thing called Bitcoin." I look into it. I was like uh it took me about roughly six months to fully understand it. So that was from like roughly July 2013 and that's because you read the white paper and you said I need to read it again and read it again or Yeah. Yeah, pretty much. And then um because back then there was the Bitcoin talk or forum and then that's pretty much it.

But did you see my Bloomberg article in 2012? Is that that had any influence?

Unfortunately, I don't I I read a bunch of stuff. I actually don't remember what I I'm just kidding. But I did write this thing and it's funny because I had a kind of a relationship with Mike Bloomberg.

was kind of not even mentor like he was just too senior but he knew me he liked me he would invite me to certain things with Mike Bloomberg yeah with Bloomberg and and then I got to know some of Mike's team and in 2012 or so they said would you write an op-ed okay and I was like yeah and I wrote it about Bitcoin and I said everybody should put 1% of their net worth into Bitcoin and I said it's basically schmuck insurance and then they published it in the Bloomberg terminal or whatever and that's when I got redpilled on Bitcoin where I was like man it's the most incredibly interesting technical product that I had read about and I think the thing that captivated me I don't know if you felt this way it was the only white paper that I read end to end where I thought this is one of the most elegantly written pieces of non-technical pros do you know what I'm trying to say like it's not something that is like dense and an archive that is just meant for PhDs you could literally give it to your sister to your brother to somebody non-technical And they would understand it.

Yeah. Yeah. And it's only nine pages.

And exactly. You know what an enormous amount of intellectual skill it takes to do that.

Oh yeah. Oh yeah. Yeah. It's much harder to write it very short.

Much harder and elegantly and simply.

Yeah. Yeah. Anybody else try to rewrite that? I think it' be 90 pages.

So the friend that showed it to you, was he a co-orker of yours or no? Just a random friend in Shanghai.

It's a friend. It's a it's a it's a random Well, not a random. He's a friend. Uh we don't have any working relationships. His name is Ron Tao. He runs uh I guess now Skyline Ventures.

And back then he he was at Lightseed Ventures of course he was a managing director of Lightseed Ventures in China.

Okay.

So we play we have a poker house game like you know small stakes. Um a bunch of uh I a bunch of entrepreneur like struggling entrepreneurs versus like VCs. Uh so the VCs have all the money and all David versus Yeah.

So but you know it's it's a fun it's a fun game. It's not a very serious game.

So on in one of the poker games uh Ron says CD you should look at this thing called Bitcoin. I was like, "Okay, Bitcoin." Okay. So, uh, and so we talked about it a little bit and then Bobby Lee, uh, who was at the time was working for Walmart, was just about to quit Walmart to join BTC China to become their CEO. And, uh, uh, as part of that deal, Bobby said he will bring Ron in as an investor, Lightseed into into BT BTCC into BTCC. So, that's in two uh, July 2013. I was like, okay. So, they two guys are pretty serious about this. So I had lunch with Bobby the next day and Bobby said put 10% of your net worth into Bitcoin. He said there's a small chance you will go to zero then you lose 10%. Uh there's a much higher chance you will go 10x and you'll double your net worth. I was like okay sounds pretty serious. So u that's when I started learning about reading the white paper more carefully. Took me six months. Uh so it was till the end of 2013 I started like I'm I'm convinced now. I'm ready to go. But then Bitcoin went from $70 in mid 2013 to like $1,000 by end of 2013.

So you already went more than like 15x.

How did that make you feel?

I was like, I'm I'm too late.

I was like, I wish I got in early.

Yeah.

Cuz when back then, right? No. Doesn't matter when you get into Bitcoin, you always feel late.

Yeah.

Right. Because everyone you talk to has in the Bitcoin industry has bought before you.

And did you talk to anybody while you were learning about it to say like you have a community in in Shanghai? there's a comm there's a very small community in Shanghai and then I was basically talking to anybody in the world that's that's willing to talk with me uh and then I had a couple friends in Taiwan they used to they they worked for TSMC back then uh because and then they were trying to do a mining chip uh for for Bitcoin so two of those guys left TSMC try to do this startup startup never never really took off but that was one group of guys I was talking to um there was uh another couple they were mostly minors there was another guy called um his nickname is fish uh silver fish uh in China. He's like a big minor. He's runs the F2 pool even today.

Oh sure.

So those guys were based in Hondro um you know I went they came to Shanghai I talked to them etc. So there was a group of guys that you talked to and then uh the biggest thing was um in December 2013 December 13th 2013ish there was a Bitcoin conference in Las Vegas. I flew there um to meet everyone everyone in the industry was there. Uh there was a 200 people conference. Uh Vitalik was there, Matt Rosak was there, Charlie Lee was there, uh um bunch of guys were there. Um and the same same guys still today. Um but and then at the time just before that it was the Silk Road arrest of uh Ross Wubber.

So the media was like no this Bitcoin is only used by drug lords.

Um and when you go to the conference it was like a bunch of kids, a bunch of geeks geeks and they're very nice people, right? So you talk to Vitalic, you know, you know, he's a very nice person.

Were you still working at that company while you were doing all of this moonlighting?

Yes. So this is what this is kind of the You tell your partners, hey guys, I'm just going to go to Vegas for a couple days. I'll be back.

Pretty much. Yeah. Yeah. And then um and then when I got back, I told the partners, I we should do a Bitcoin payment system because Bit Pay was kind of the big player back then. Uh Bit Pay just raised $4 million US in 2013.

So they was kind of the uh the large player actually in the employee.

Can I tell you a very funny bit? I have two Bit Pay stories.

Sure.

I was very focused on trying to prove the transactional capability of Bitcoin.

Yeah.

I went to my local car dealership and I bought a car with Bitcoin using Bitay in 201 12 or 13. Wow.

That Range Rover is probably $90 million. And then even more stupidly, there was a real estate development in Lake Tahoe.

Yeah. called Martis Camp. Beautiful. And I had owned a couple of lots and I said, you know, it would be great if I actually could prove that you could buy real estate with Bitcoin.

And I called the guys at Bit Pay and they were like, yeah, we can facilitate this transaction. No problem. I bought a piece of land. And then again, I thought this is an interesting story. And the Wall Street Journal wrote about it. And now that piece of land is a billion dollars, but you you cannot calculate this way, right? So it's easy. I calculate it this way every day.

You can't calculate it that way because the stupidest purchase ever.

No. No. No, no, no. That's this that's the bucket of money mentality, right?

No, no, no. It's true.

Right. So, even if you didn't use Bitcoin, you would have used some money to some Exactly.

buy the land. You could have used that money to buy Bitcoin.

Yeah.

Right. So, Yeah. Yeah.

So, you're like, "Hey, we should do a version of BitBay."

Yeah. Yeah.

And your partners are like, "What are you talking about?"

Exactly.

And now, at this point, you still hadn't bought any Bitcoin.

No. At this point, like I had like maybe one Bitcoin.

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Yeah.

Yeah. And one Bitcoin is like only a thousand bucks back then. Yeah. So, Yeah.

So, then what happens? And then so but and then so I tell my partner look I think this is this is the biggest this is the biggest thing in my life right so when I think there's three fundamental back then I realized there was like two fundamental technologies in my life this the internet I was too young to do too much with it and there was this Bitcoin thing and I wasn't I was 35 36 I wasn't going to miss it the next thing that's going to come along is going to be 15 years later you feel old when you go to Vegas and you see all these young 22 year old kids and you're like I missed it did you think that at any point or no 35 36 is still okay. Okay. So, it's still like doable. Uh you know, you don't feel super old. Today I feel that but I thought the next thing that that will come will be 10 15 years later and with that's AI, right? So, today I say like there's three fundamental technologies in my life. But back then like that's the that's the that's the thing, right?

So for me it was very clear I got to I got to do something in this industry, right?

So u and uh so I told my partners look I'm going to I'm going to I'm going to quit uh and I'm going to do work in the Bitcoin industry. That's what it's called back then. And then um uh and then I was I also need to buy Bitcoin and I don't have many money so um I don't have so I just I said look I'm going to sell my apartment in Shanghai and then buy Bitcoin but selling the apartment takes time. So it took me like a a solid few months to sell it and it was it was only you sold it where did you just got a rental apartment?

I sold it at uh at the time actually my family also moved to Tokyo. So my family moved to Tokyo. We lived in a rental apartment. Um so in Tokyo in Tokyo. Uh and then I was traveling in Shanghai. So that's kind of the time I started moving started separating from uh from the from from the family as well. So I was spending a lot of time traveling, right?

And uh so I sold the apartment and for roughly $900,000 like just under a million bucks. Um, and then started buying and I got paid in trenches because, you know, you get a first down payment, you got paid in trenches and every trench I get, I just buy. The first trench at $800 and then Bitcoin is dropping $600, $400. Kind of averaged to about $600.

Incredible. Yeah. Incredible.

So now you have your Bitcoin position, but you still don't have a job.

Yeah. Well, I was looking for a job at the same time, but you were looking for a job in the Bitcoin industry or you were just looking for any job in the Bitcoin industry. That was very specific. Um, it didn't take me that long to get a job. Uh you like the gap was pro from the time I said I'm going to quit until I finalized the job was probably about two to three weeks.

Oh wow. Yeah.

And so who hired you?

I first discussed with BTCC Bobby he wanted to hire me and then um uh but then uh blockchain info came along. Uh I bumped into Roger Ver so and then he at the time blockchain uh blockchain info was I was the third person to join the blockchain info team. There was a uh Ben Reefs who's a founder and there was Nicholas Kerry who was just the C hired the CEO and I was like the third guy in so I was like VP of engineering because Ben we want to reserve the CO title for Ben.

So uh uh so yeah I joined I I joined uh blockchain info. I flew to uh York in London like three hours north of New uh London. Um uh I spent some time there you know figuring out what to do. Yeah.

And how did that go?

Uh that didn't go very well. We expanded the team to 18 people and then um Peter Smith joined uh as a CFO wanting to raise money for blockchain evil.

Coinbase just finished raising at raising around at 30 raising $30 million. Um and that was a big one in the industry back then. Um Peter Smith somehow maneuvered himself into the CEO position pushing like Nicholas Kerry to the product manager kind of role. Um but the culture kind of changed a little bit. So um uh I left um a bunch of the developers I hired left um and then um Ben Reef Ben Reef sold quite a lot of his position also left in a few months later. So that was that was my so that was only like a few I think I was only there for like uh six seven months. So that didn't work out too well. Uh but I learned a lot uh from that experience.

Yeah. You learn what not to do. No, they all know like blockchain info when I joined the the Baron Reeves said look we have no company we have no office everyone works remotely we just pay everybody in Bitcoin and so that's something I learned from that company and I still look that's still very heavily used in Binance today so I learned a lot I also learned that you know that company the whole marketing they at the time blockchain info was the largest user platform in the industry right so they had about two million wallets uh more than Coinbase at the And um uh the entire marketing was one thread on bitcointtalk.org one thread. The thread is 150 pages. Um Ben Ree just replies to that thread and that's how you grew to a 2 million user platform. I was like okay so you can do some you can do quite a lot of guorilla marketing to be successful.

Wow.

So I I learned a lot. U but the culture changed a little bit. it wasn't fit for for me and then I I left and then that was when um uh hired me into into okay coin. Yeah.

So I he said look why are you working for this wallet company your experiences dealing with order execution exchanges.

So so he hired me there as a developer as a CTO uh as a CTO.

Yeah. Um so uh yeah so in the process I think BTC China helped me again.

Uh so you know I was kind of looking for a job again right so I left and then um uh uh was talking to me and Bobby Lee found out and Bobby Lee meant so okx okay coin back then uh will offer me 5% equity um and then for uh sorry uh BTC China came along and offered me 10% equity and then OKCoin matched it within three hours and then I was debating between Shanghai and Beijing and I decided to go to Beijing to join OKCoin back then uh Hu at that time had 1% equity Uh so she hired me to be like the the the the bigger sort of partner in the business.

Wow.

Um so that's that's how I went to OKCoin um for about 8 months or so. Um that didn't last long either.

Yeah. Because I think there were also culture differences um at OKCoin. Um uh there were some stuff that I didn't agree with. Um both in terms of like you know simple examples like how they run promotions, how they how they do fee discounts uh where you have to ask for it like they they advertise a fee discount but you have to ask for it to get it. It doesn't apply to everybody even though they advertise as such.

So small things like that. And then um so yeah, so that was in early 2015 I said no I'm I'm going to leave. Um, so that's kind of a uh so that lasted for a few months uh in 2015. Yeah. 2014 mostly. Yeah. So how do we get from there to Binance?

So 2015 um I I with a couple of my old colleagues said we're going to do a Bitcoin exchange in um in Tokyo in Japan because this is uh a year after after Mount Gaus and all that. Yeah.

Yeah. So there's a vacuum in Japan. So um we got two developers that came to me on the same day I decided to leave OKCoin. they came to me said look we somehow they also quit their pre respective jobs. Um I said okay well why don't with the three of us do something and so I we said okay so I will I will be the CEO and then I'll be the big guy uh with more equity and then I'll be uh responsible for raising u I and I was paying them a salary out of my own savings um and I wasn't taking anything.

So the two developers uh we we whipped up a demo very quickly. We downloaded an open source software for an exchange and then uh we tweaked the UI to be a little bit sexier and then uh we hooked up.

You just forked an open source project like this is our this is Binance.

No, we we didn't say it was Binance.

Yeah, this is before this is before Minance.

Yeah.

And we didn't say we I was very transparent. I was like this we whipped up this demo up in two days or in a few days.

Um and this is a demo that we can show you. But this is not our the ultimate product. It's just it's just a proof of concept just Yeah. So um it's like uh yeah so and then but and then we had a script that took Bitfinex uh market data. Bitfinex was like a the large exchange back then and we just kind of copy their order book and the order book was flashing there's trades going on. So it was a very lively demo and when the investors saw that it was like wow this is good technology but it's not just a demo it's it's it's a when they ask me questions I can answer in very deep ways right when they ask me like you know how do how do you structure this to be a fast uh exchange we I can talk about know in memory uh matching um uh optimizing database all all the all the stuff you've learned yeah so I can go really deep when they ask questions right so the my my knowledge is there right so they were like uh They were like, "Okay, this technology is cool, but you could you won't you won't be successful running a crypto bitcoin exchange in Japan. You don't speak Japanese, right?"

I was like, "Okay, they have a point."

Um, so they said, "Why don't you sell the this technology to other exchanges because most of the Japanese exchanges don't have very good technology." Um, I was like, "Okay." So then I went to talk to a few of the exchanges. Like literally two weeks later, we signed a contract with one of the with one of the exchanges and then they paid 30 $360,000 for the for the system. Uh so they made a down payment of 100 $180,000.

Um that was enough for me not to pay salaries anymore. So I was happy with that. So uh we pivoted from a wanting to run a our own Bitcoin exchange to a exchange systems for provider.

Yeah. You're selling software.

Uh we we're selling software. And then um in July 2015, a bunch of Chinese uh uh companies came to us saying they want systems for Can I just say by the way, sorry to interrupt you, but it's really incredible because there are so many founder stories when somebody says, "I've started a company." And then somebody says, "Well, how much is it worth or how successful is it?" And you know, let's just say Binance is a $200 billion company, probably less than that, but it's in the neighborhood.

A lot of people think that there is some incredible origin story that is like lightning in a bottle. But so often than not, the story is more yours, which is this. It's kind of like moving along, meandering, learning things, trying some other things, this non-obvious iteration, and then all of a sudden things kind of catalyze. But even then, you still don't get the right form because you're licensing it really. And people just misunderstand that this is actually more what entrepreneurship is.

It's the resilience and the grit to just keep grinding.

For sure. For sure. I think most most people idealize like, you know, um entrepreneurship that they just hate it and they they they it's like the Facebook story. You hack it together in college and oh it's now a million users.

It's Facebook is is is Microsoft, right?

Exactly. And also Google this three are like you know college uh garage and they just Exactly. Even but the reality Binance or Tesla it's like a grind. It's it's a grind and it's a grind.

You have to like go so many different ways and it wasn't obvious from the beginning.

Yeah.

Right. So I think those three are the exceptions that kind of just hit it from day one.

Exactly.

Um but then that kind of shaped the people's perception like 99% 99.9% of other business successful businesses are not like that.

Right.

Right. So if you look at now any other successful company. Yeah. So the same same here.

So get us to the founding moment.

Yeah. So we did so you're licensing the software.

We licensed the software. We that business went pretty well. So, we've had like 30 different exchange clients.

Wait, no way.

Like over over like over multiple years.

Over two years. In two years, we signed up.

Yeah. So, this is a multi-million dollar Oh, yeah. Yeah.

licensing business.

Yeah. So, and it's a SAS business, right? What we call exchange as a service uh business. So, we charge a fixed monthly fee every month. And this is platform business is paying us. It's very steady business. Every new client we So, every new client increases the the revenue. So, every new client is like a step up.

Exactly. So it's a very actually a very very good business model. But then in March 2017 uh the Chinese government shut down most of our clients. Uh and then um and then by May we're like right and they don't touch you because you're the software vendor with a software vendor. Exactly. We don't run any business. So with a software vendor so um but then our businesses we don't we have no clients right. So uh we lost our clients and so by May we were like okay we need to pivot. Um well by April May we were like figure out how to pivot. Um by end of May we was like okay uh actually three guys who worked for me said they want to do a Polon next copycat. Polex was the biggest uh exchange back then. Um and then I said let's let me invest. We have some extra cash. Three days later they want to do some onchain chat trading software. Was like no we're not going to invest in that anymore. Um and then I said well why don't we do that? We have the exchange system already. Uh we still need to customize it to do a cryptoto crypto only trading.

My gosh. So in May we said okay uh we're going to do a crypto we're gonna do an exchange again. Um the team said fine uh sure.

How big is the team at this point?

20 people. So um and we had tech people.

We don't have marketing because we are to be business right. We we have we have two sales guys two sales guys plus me.

Um and then uh we said well now we can run our own let's let's do our own cryptoto crypto exchange. Um so and then so that was the end of May and then June 1st to June 10th uh there was a guy who who was a BTC co-founder uh Link he ran an ICO in China he raised 15 million US dollars in in 10 days and with and then I looked at him I was like I was like he only had a white he only had one document and one website no product nothing he raised $15 million US if if he can do that I might be able to do that too you need aded venture funding you're like if I get the $1 million. I can build out a team. I can invest in some marketing. I can be in the J curve and not feel the pressure.

Exactly. Yeah. So, originally we were going to go to the VC funding route, right? But then when I saw that, I was like, well, and and and everyone talking about ICOs back then. Uh I went to like I went to a conference uh mid June uh 2017 and everyone was talking about ICO.

Everyone's like, CZ, you got to do an ICO. You got to do an ICO. So, um by mid June uh June 14th was the date. And then I said, okay, called the team said we're going to do an ICO. write a white paper and then by and so did you have a name at that point like in the Bitcoin community or in the crypto community either in China or in Japan or somewhere I had a little bit of a name even working at blockchain info uh uh quite a lot of people know me uh blockchain info was the most popular platform back then right and OKCoin was also like I was a CTO I was quite I was quite active on social media um I was also kind of managing their international markets non-English speaking or non-Chinese speaking markets because nobody else I was the best English speaker on that me even though my English is not that great but uh so I had a I had a little bit of a a name uh uh people know uh people know me in the community because you needed a bit of a name or some kind of pedigree to actually do an ICO at this point.

Yeah. Yeah. Yeah. So, but this is a advantage of when you get involved early in the industry like you go to a few conferences like there's 200 people and you go to like by the second time you go there people know you right but the third time is people like oh you know you're the expert already right so u so I had a I had I had a bit of a reputation uh so I thought that link quite the guy who did the ICO in China he's quite well known in China but he's not known internationally I have a little bit of both so I said well I can probably do an ICO and raise the same amount so we Uh, and um, so who are the buyers of the Binance ICO?

To be honest, even to this day, I don't know.

Even to this day, you don't know, right? It's like I think, but are they Chinese? Are they Japanese?

Are they people from all around the world that kind of knew you? Was it that your white paper was really good?

Okay. So, I think in terms of demographic, it's probably like 80 the ICO purchases were probably 80 80 to 90% Chinese. And there were some like international guys who who bought it.

Uh, and I think the data shows that there was about 20 20,000 people who bought in the ICO.

20,000 people.

20,000 people. So, and this is like a brand new brand. Uh, some people know me in the industry and that was it.

So, even though the exchanges were put out of business in China, yeah, the ICO was allowed.

No, the ICO wasn't banned back then.

Wasn't banned.

Yeah.

It was not not allowed.

It was not not allowed. Exactly. So, let me let me let me let me just make one clarification. The exchange clients that that we were serving were mostly stamp uh cultures exchanges, not crypto exchanges. Okay.

Crypto exchanges were not banned in March. Crypto exchanges were banned after we started.

I see.

So uh that was in September. We're talking about like June, July kind of 2017.

Wow. You're really threading a needle.

Yeah. Yeah. So I we didn't know that that B was coming. We just thought like you know those How much of the company did you sell?

No, we didn't have we we just the coins.

We launched the token.

You had to do no equity participation.

There's no there's no equity that there's no equity uh involved. So we just we launched a new token B&B is still there today and then we said look we're going to sell uh we're going to sell 60% of it for $15 million roughly. Right. So uh because we're tokening bitcoins and what were the original tokconomics that you designed for the B&B token?

Well, we said a bunch of things but the main one that was going to be live very quickly was going to be uh if you hold B&B you receive 50% fee discounts when you trade on Binance eventually the platform that gets launched. Um, that was the main thing. But we also said, look, it's going to be a it's going to have eventually it's going to have its own chain, it own decentralized ecosystem. There's like three or four things.

So then you guys must have been ecstatic. You're like, wow, we raised 15 million bucks. We're now going to launch this exchange. But then September comes around and then exchanges themselves.

So then what do you do?

Yeah. September comes around. September 4th, the like seven different departments of Chinese government issued a memo together saying that number one exch crypto exchanges are no longer allowed in China. ICOs are no longer allowed. Mining is not allowed, crypto mining. Uh we said, well, we're gonna move. Well, we said uh we have to move.

Uh by then it was clear that even while at the time China was one of the do the the largest user base, uh they have like 30 something% user base from China, but we still have like 70% from the rest of the world. We said, look, if we cut off that 30%, we can still survive. We can we can we actually survive pretty well.

Yeah. Um, so we said, well, I just said, "Look, let's move. Let's move. Uh, let's move to Tokyo."

Back to Tokyo.

Back to Tokyo, right?

You love Tokyo.

I I I've been I've been back in and out of Tokyo. I know it.

And by the way, at that point, do you speak Japanese as well?

I speak very little Japanese. Uh what I call taxi Japanese. I can I can say like, "No, thank you. Go left, go right." In a restaurant, I when I order, I say this, this, this, not the not the full menu names.

Yeah.

Sushi, I can name most of them.

Okay.

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Yeah. So, that's my Japanese level. But you know I know Japan, I know Tokyo. It wasn't it's not like a new country for me, right? So I said like let's move to Tokyo. And we had like 30 people then, right? So and everybody moved.

Everybody moved.

Wow.

Back then um eight years ago I think very like maybe one or two of the people were married. Uh and nobody had kids. Uh so it was like a very easy move for the team.

Yeah. Uh so it's everybody just packed up and moved. I remember one girl cried, one product manager, she cried because her her boyfriend is in is in China. So she cried but she moved with us and u she's not married to her boyfriend. So anyway, incredible.

So yeah, so we moved to Tokyo like u when China did that um and uh our platform continue to grow. Yeah.

So when you first launched Binance, was it an instant hit or did it take energy to find that product market fit? at first few zealous users that would tell everybody else like how did the verality start? How did the liquidity really get built?

So, Binance I would say the product was growing pretty well but the token price went down uh from ICO price it went down 30 40%. It took about 3 weeks to recover. Uh so, uh when we launched the product uh because at that time crypto is still pretty hot. I think we the product market fit was there. Um it wasn't a new idea. It's just a cryptoto crypto exchange. So then the ICO was critical then, right? Because these people say, "Well, I own this token now.

I can trade at a fee discount."

Yeah.

So that's why I'm going to choose Binance.

Yeah.

But was it also architected better? Was it materially faster or more reliable?

Yeah. Yeah. For sure it was.

It was. So back then uh when we launched you can even even using your eyeballs, you can see that placing an order on Binance is so much faster than on competing platform.

And so the performance of of the exchange system was visible. Back then 2017, who were the big platforms that you were competing with?

There was Polonex, Bitrex were the biggest ones and then there's a few Chinese ones. There's Hobi, OKX, uh, OKCoin back then. Um, and then in the Western world, Coinbase was there. Um, Gemini was Gemini wasn't there back then. Um, Gemini was later. Um, so Bitstamp was there. Uh, Bitfinex was there. Um, now they're kind of really really small.

So you're now in your late 30s.

Yeah. Yeah.

And this thing is working.

40s now.

40s, sorry. 40s. How did you internalize the success? You're like, "What is this?" Like, "What what's happening?"

Like, "Are you saying that to yourself or Yeah, there were some really surreal moments where you were like, is this real?"

Yeah.

In a good way. Said like, "How like what's our revenue?"

She I forgot the number, but she said like a couple a couple hundred bitcoins.

Like, that's crazy. We can't be making like are you sure? She's like, "Yeah, we're sure." Like, "No, this number can't be correct. We must be off by like a magnitude." And we double check, double check, triple check like correct.

I was like, that's crazy. And then there was also a period where three weeks in uh when the B&B price was recovering. So B&B ICOed at like about 10 cents. It dropped to like 0.0 uh up dropped to 6 cents. And then um uh Hi join, we announced Hi joining and then for the next two three weeks um every time I you know you go to sleep, you wake up the token is up 20%. You go to a meeting come up the token up 20%. You go to the bathroom, come back, and tokens up 20%.

I mean, it must have been very quick where you're like, wait a minute, I'm rich.

That came a little bit later. That came in early 2018, about six, seven, seven, eight months in. Forbes put me on the cover.

Uh, that's when like, well, I said, well, how did they even know to find you at that time to put you on the cover?

I actually don't know, but Forbes was doing a crypto edition. I see. So with all the crypto guys and then um they already had a picture of Italic doing a fancy hand gesture which is really cool picture. So um yeah so uh yeah so they they invited us they they contacted our PR department which maintains contact with them uh which is really team back then um like team of four or five girls um and H says like well Forbes want to do a special feature with you and take some photos I think you should go. I was like, I don't want to go. But I said, we're a new brand. Forbes can still help us, you know, uh, increase the brand with awareness. Yeah.

Yeah. Yeah. So, I said, okay, fine. I'll go. So, I went to do the photo shoot.

That was like my first photo like to put makeup on me and then the first time put makeup.

Cy, what is what is money?

Well, is it important? I mean, don't take this wrong way, but you got rich old.

Yeah. Yeah.

So, did it matter at that point? What is money when you're in your 40s and you make it?

It still matter. Uh, but money is not everything. I think I was old enough that there's a couple things that happened to me. Number one is I was older as like 40ome. So I'm not like a young 20-year-old that just you know Lambos, big parties.

Too old for that. Uh so I have also my personality is quite stable. So I don't get too excited on things.

Um also the other thing not to brag but uh I went from like a barely financially free to like know cover forbes and I was like wait a second like how how how rich am I? I don't even know. I don't like when I look at my wallet nothing changed like Forbes Carver nothing changed for me. Um but then people say look now you might be a billionaire. I was like am I really a billionaire? Like it doesn't feel that way. I was like even like a month ago like not a month like at that time when when we fled well when we left China to go to Japan uh I booked economy classes for a redeye flight and he was like no maybe we should upgrade to a business class so we can lay down and sleep. Okay that makes sense. That's you know so like I have those kind of habits. So uh when you make money successively like you know you from one from 1 million you become 10 million you might want to buy some fancy cars from to 100 million you might want to buy a you know some yacht or something to a billion then you have I didn't go through that stepwise process. I just went from like a relatively okay kind of thing to like you're on the cover of Forbes.

Yeah.

So um and so I didn't develop quite a lot of those habits.

What does it what does it mean now? Now, I mean, depending on the day, yeah, you're a deca billionaire or a centiionaire. What does it all mean?

I it doesn't mean very much to me. I think money is two things. Number one, you you have to take care of yourself.

You have to have food, shelter, you know, which is very minimal amount of money.

Very minimal. Like you don't need that much for that.

Yeah. People can confuse themselves and create all kinds of complexity, but it doesn't take much.

It doesn't take much. Um, so that I for sure have. So, I have I have a very I don't have a luxury life, but I have a very comfortable life, I think. Um, and then the other Sorry, what does that mean?

If you look at my house, my my house like the living room water leaks every month or so because the the house is too so old. But that's the house that has that's the right size for me at right now. Um, no, it's not. We'll just fix it whenever it leaks. U, so that that still happens like that happened a month ago.

So like people think I live in a very fancy house, you know, all this other craz, you know, it kind of fits all my family members. Yeah.

Um, but it's not a it's a old house uh that I bought third or fourth hand, but it's it's in the right location. It works for me. It's in the right location. It's functional. Um, things break once in a while. It's fine.

Would you say it's because you're practical or is it just because you're just not moved by I'm function driven.

You're function driven.

If it functions, I'm okay. I I don't care about the fanciness. I don't care about style. I don't care about colors.

I don't care about glitting gold. And if it's functional, I'm okay.

Right. So, uh, if it if it solves the problem, I'm good.

Do you ever have bouts of insecurity?

Uh, not really. I'm I I know my weaknesses, so and I learned to deal with it. So, uh, I'm not I hope I'm not super arrogant. Uh, so I don't think I'm arrogant.

I've only gotten to know you in the last couple years.

Yeah. I saw videos of you, I think it was in the late teens, early 2000s, and my immediate reaction because that's always been my struggle is sort of these bouts of insecurity, ego. I thought, man, this guy's really calm.

Yeah. I'm I'm I'm calm.

Yeah. So, I described this way.

Very well reggulated, very self-aware, it seems.

Yeah. Other people's emotions may go like this like happy, sad, happy. I'll feel happy, sad, happy, sad. But my ampl amplitude, the amplitude is very moderated is narrower. Yeah. Right. Yeah. So, so it just allows you to manage in many ways. I mean, success is somewhat illusurary. If you're like working on a problem, nobody knows the toil.

Yeah. Yeah. Yeah.

Nobody really wants to hear about the toil. They want to have a very simple way of pointing to something and say, "Oh, wow. Look at what you have." But if you're working and you have no time to enjoy it, nobody understands that, you know. Yeah.

Okay. So, you launched this thing, it's going bananas, but there were some hiccups.

Yep.

Do you think that you got too addicted to the growth at any point?

I wouldn't say I was addicted to the growth, but I was addicted to the work.

Okay.

The work was actually very satisfying, very rewarding. But, what was the average day for you? What were you trying to do? I was basically doing like 20 plus meetings a day like scheduled calls or meetings and then plus other random stuff and then having to respond to people on Twitter and uh stuff. So um but it was very rewarding because um it's there's a sense of fulfillment that is very hard to describe. It's not the money, it's not the growth.

Yeah.

Uh it's uh you know so what Yeah. What was it when you were running Binance?

I don't know if you do this, but some sometimes people fixate on the leading indicator like revenue is a lagging indicator, right? Revenue and profits are just they're here. That's from six months ago, a year ago.

Yeah.

Manifest today. What was your leading indicators? What were the north stars that you really cared about that said this is the health of the system?

Yeah. Yeah. I think it's really daily active users. It's not trading volume.

It's not revenue. Why DAO versus those other things? I think as long as you keep helping serving more users um then you're you give them value. So I believe a product is valuable when people want to use it.

So the more people who wants to use it even if your revenue is zero you have you have value. So any product that people use the more people you use it the higher value right? So that's kind of always my philosophy. Whereas uh you you can optimize for revenue, you can optimize for profit shortterm and you can lose the long-term growth. But I believe long-term if you have a large number of people using your platform, that's where you create value. Not just for yourself, you also create value for your users. People choose to use you because there's a value in using you, right? So that's kind of my my my northstar. And also knowing that related to that was knowing that hundreds of millions of people are using us, we help them, right? So the way I view is if they pay like you know a commission fee that they're willing to pay because we we we must have given them some higher value.

One of the double-edged sword of the DAO is that some of those DAO are bad actors.

Yep.

When was the first inkling that you had that that may be a problem and that you have to take that seriously?

It was like I think what does that first meeting look like where they're like CZ I have good news and bad news.

Yeah. Yeah. I there's actually a very clear point. I think it was like Christmas day January 1st or like you know New Year day January 1st 2018. So this is like six five months after you know we we were kind of large uh well or five months after we started and we're kind of we were number one uh exchange already on that New Year's Eve uh December 31stish uh 2017 a US Homeland Security guy reached out to me. Um his name I think is Joseph. Um I always remember his name is Patrick or Joseph.

I'm not sure which one.

Okay. um he wrote an email and then I got the email and said like well he wants to he wants our help to help track some hackers who may have moved funds of the Ether Delta hack. Either Delta was a decentralized exchange back in 2017 that got hacked that went down. Um so this guy who works for the US government uh emailed us and I I didn't know how to deal with it. Nobody on our team knows how to deal with law enforcement. So um I you know got a couple guys to huddle up together say how how do we help this guy? Uh and then we gave the information that he requested. We verified who first we had to verify who he was. And then um uh and then afterwards he thanked us uh and then I said, "Hey, um Joseph, can you recommend somebody that we could hire that can interface with law enforcement in the future?" He recommended someone, but it the guy was based in the US and we don't have a US entity. We we couldn't hire anybody in the US back then. So we kind of had to let that go. But that was the point. It was like um New Year's Day. Uh I actually remember where you were like this is going to happen more obviously invariably of large numbers.

Yeah. Yeah. So that that's the day when I realized okay look we need to we need we need to have somebody who has experience working with law enforcement and so what did you do?

So we we eventually hired we hired more guys. Yeah.

Okay. Yeah.

Obviously like you're not looking at the transactions. So you wouldn't know. But if we fast forward a little bit, the claims that then the US government under President Biden made at you was essentially that people like Hamas or people like other organizations were using Binance and you didn't do enough.

Yeah. So uh on this point I may have some legal restrictions on what I can say and cannot say about know the plea the etc. So I I'm not a lawyer but I'm I try to stay very clear from that. But overall though, I would just say um the Biden administration overall is quite hostile to crypto. I mean they openly announced war on crypto. Yeah. Right. So uh it's good to see this new administration change 180 degrees. I think that's this is good for America.

Yeah.

Uh this is good for the world.

Yeah.

So uh I think it was I wouldn't blame the previous administration, but I think they just didn't understand.

Why do you think that they were so hostile to it?

It's fear of the new as that as simple as that. uh I think they probably in their heads uh there's some degree of let's not disrupt the current financial system the banks whoever else um there's probably a lot of lobbying from those industries as well to them so that kind of brainwash or affect the thinking however you call it so that's human nature I mean if you think about it it's understandable it's not ideal but uh it's understandable so you're running the exchange things are going well from 2018 2019 2020 it's kind of like you're really coming into your own.

Yeah. Yeah. Yeah.

You eventually opened a US entity.

Uh yeah, in 2019. Yeah.

And why did you feel the need to do that?

So 2019 there was some news about no US governments basically in my layman words chasing BitMax. There was some Big Mac in the news. Uh there were some also Bitfinex stuff in the news. Uh I think the US government frozen froze at least the Poland government froze like six to $800 million of their assets when their market cap was only like four billion. That's like a large chunk. And then they got sued later on by the US government saying that they don't have enough reserves.

Yeah.

So we saw those news and we're like okay well the US government is looking at this industry and we better register and you know again I asked my friends my many of them have legal backgrounds and then they sort of general consensus was okay we got to we we should operate in a registered faction in the US. So this is 2019. Um so we registered Binance US and um it's a separate entities. It's a separate deployment. Uh it's a separate matching engine, separate liquidity. So and Binance US has been regulated from day one. Yeah.

2019, 2020, 2021 things are just generally working.

Generally. Generally. Yeah. Yeah.

Then you start to see some of these other folks start to pick up steam. SPF and FTX start to really Tell me about that.

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Um uh how did you meet him? Because you ended up owning a lot of the equity.

Yeah. Yeah. So well we we we invested in them only 20% as equity at some point and then we exited a year a year later.

Yeah. Um we didn't we didn't stay there for very long.

Uh I think I'm first met him in January 2019 in one of the Singapore conferences Binance organized.

I think at the time FDX did not exist.

uh uh Sam uh Bankerman Freed SBF was running um Alamea and they hosted an afterparty in the S uh Singapore uh aquarium uh on Sentosa and they had divers in the fish tank you know holding a sign with etc. So they were they were like a VIP client they were like a large trader on Binance so we're friendly to them.

Yeah. Right.

Yeah. So that was in January 2019 and then a couple months later they came to us saying look they want to start a futures platform. They proposed a futures platform uh some kind of a JV uh that I I can't remember exactly but I think they proposed 6040 in our favor.

Uh we we want I thought about countering propos like we have we had all the users they don't have anything back then. I thought about counterproposing like 955 but I don't think that was very polite.

They're still like a trader. They still like a VIP client.

So we declined that. We said no. Um because they were a crucial part of the liquidity pool.

Uh not a crucial part. They're a large trader but you know Binance they they were new too. They they it wasn't like they were there for like many years.

Okay.

They were only there for like know probably six months or a year. I don't know the exact uh dates.

Um and then uh uh mid like a little bit later they came back with a better offer. Said look we uh uh like in summer they came back with a better offer. We still said no. Um and then in in November they came back said okay look we're going to offer you this really really attractive offer. But then FTX was launched. Have some volume. and they said look we're going to give we're going to basically give you 20% at this at this price and there was a swap of tokens B&B versus u FT tokens so that's we got some initial uh FT tokens at the time B&B tokens are much more liquid and FT tokens are less liquid so um we done that deal and then um almost as soon as we did that deal I keep hearing from my friends like you know SBF badmouthing us in the Washington circles in the US etc.

I was like, "Come on." And then um they also did some other stuff which which is kind of annoying. Uh they they pay five times salary uh of to our VIP uh uh account managers uh that had access to our VIP database and then so that girl goes goes working for we if we match that girl then we have to 5x everybody.

So like okay you you go work for them and then the day after the girl go works for them our VIP clients gets called saying look they going to get a better rate on FTX etc. Like so I called Sam said like can you stop doing this? We're like we're your shareholder at the same time he's like look see like can we do a onetoone panel on a crypto event right so fine and we're an investor we want we want to help promote it. I actually want multiple exchanges to be to be successful in the industry because then we wouldn't be the ones that get targeted all the time.

Yeah.

But there was always like no I always keep hearing there was some bad mouthing some other this and that. So a year later, I think it was mid early 2021, we said uh and they were they were claiming to be like raising money at you know 32 billion valuations. We're like, well, why don't we exit actually? So, in our investment clause, we had veto rights on any future rounds, right? So, if you want to block them, we could. I didn't want to use that to block them. Uh oh, wow.

So, I was like, you know, even if why don't we just exit and we can compete, right? So um and then we thought we we talked about exit and then we exited I think in if I remember correctly it was in July the deal was finalized and the transfer was done in July 2021 and this is like a full a full year and a half before they had issues at the time we didn't know right because there was some rumors that a lot of their issues started after you sold and they were somehow conjoined.

I'm sure you've heard of that but you can put all of that to bed.

Yeah. So that's categorically not true.

And also because of the competitive nature in the businesses, even though we're a shareholder, I never really I never ask them for for financial statements.

Oh wow.

So I just, you know, I just didn't ask for it. I'm a very passive investor. So when I invest, I don't get involved in their business.

Yeah.

Um and they also they're slightly competitive. We have we had a futures platform. They had they have a futures platform. So I try to stay no let them do their thing.

So post this the thing with the FTX thing that most people talk about are a couple things. One was the way in which the restitution happened was suboptimal to some of the holders of of FTX people who had cash money there. The other thing that people talk about is the value of some of these investments post.

What do you think in the aftermath of all of this? It says anything at all about the industry or um I don't crypto in general or Yeah. I don't understand the whole uh bankruptcy process whether that's fair or not. Um I read a lot of different things online.

Also um just to be transparent, there's an ongoing lawsuit between the state and us. they want to try to claw back some of the money that we got like a year and a half before, right?

So there's probably limited stuff I can comment on that.

Um, yeah, but again, I'm not an expert there, but I did hear some complaints about, you know, some Chinese users not allegible, etc., etc., but now from what I read is the the because of their appreciation of crypto now in US dollar terms, uh, they have enough uh, right?

Even though if people held crypto back then, they probably have gotten more. I don't know what the deal is. When did things at Binance start to get complicated for you?

You mean with the US governments, right?

Yeah.

For me like uh they started asking for information the information requests which we always comply, right? So that was like 2021 2022ish and it was like uh late 2022 it was getting more hostile. Um, and then I think in early 2023 was more clear that they were making uh they were uh we either reach a deal of some kind or they're going to indict us or stuff like that. There was like it became negotiations. How do you deal with that as a person? Do you think I can't believe this is happening? Like when you're in this meeting and your lawyers or whoever it is are telling you, hey CZ, I think there's going to be an indictment.

Yeah.

I don't How does that meeting go?

So, uh, number one, I'm not a legal background, so I had to rely on a lot of other people's advice. That's generally the harder part for me because I don't have experience there like no no one has experience going through this. You go through this once you never want to touch it again. Right. So um so no one really on on the receiving end have any experience. Um you have a bunch of lawyers and the lawyers are the lawyers I think are good but how you organize lawyers actually is quite tricky. If we hire a bunch of expensive lawyers, they all have different specialties and they all have different opinions and they all want to seem like the smartest person that's driving the decision and also they they all want to take a lot of time to analyze. They get paid by more time they spend. Um I'm not saying that they're unethical. They they want to do a really good job.

Um but then they go in all kind of different tangents. Um so you get dragged in a lot of different different places. That was the most troublesome part for me. If somebody told me like this are the three things you got to focus on this is you know you got to this strategy. We also didn't have a strong legal team. Uh our team is young.

Uh we we our our legal team didn't have this type of experience dealing dealing with this type of uh uh uh issues. So that was always tricky. But I kind of look at when I come by the way where was the entire team at this point still this we're all spread out now. You're everywhere.

We're now we're everywhere. We're spread out. And I think I 2023 I was in Dubai.

Uh I was in Abu Dhabi Dubai split in time. So um yeah it it was very stressful um but the way I deal with stress is I just look at the best and worst case scenarios right so um say asked team what's the best case scenario okay you pay a fine you get a you know you get a DPA or then this this thing's over then okay so that's the best case and then the worst case okay so they were going to ask you to they're going to try to put you in jail um stuff like that was that the worst case though because at the time it seemed like the fact pattern was folks would get some sort of probation or that would be the worst worst case but also uh yeah so performing nobody got put in jail but they they could ask for it.

Yeah. Right. Right. Right.

There's actually another worst case which is you fight it and then you if you if you come if you can't agree on a term you fight it and you stay in the UAE which is a non-extradition country and you know and now you have citizenship and so they there's almost zero chance you'll get extradited but then your travel is going to be limited anytime if if you cross to a different country even if that country is a non-extragene country that can still be a chance that there's a deal being made right it's kind of leaving fear so plus it also creates complexity just at governmentto government level if folks are allies and it just it just creates a lot of noise it creates a lot of noise it also creates a lot of pressure for the UAE government potentially I don't want to trouble people who gave me a citizenship I don't want to be the trouble causer right right so um and uh so but you know there are the the worst case scenario is like you know you don't go there they indict you and then you they put you on the red notice list um stuff like that right so that those you know those those are potential possibilities yeah so how did you resolve It took like the negotiations like was basically daily calls with with like 12 20 lawyers on call for like more than a year.

Uh more than a year more than a year of back and forth with the president Biden DOJ the president Biden DOJ and and the most common thing I hear from my lawyers is we have never seen them this hostile on a case like this.

Right. We have never seen this before.

This is this like that's the most common phrase my I've heard. At some point you just become desensitized to it or do you keep internalizing it, personalizing it?

You think why is this happening to me?

No resentment or just more how did you deal with it? I'm just It takes it takes successive steps and there were a couple steps which are really hard to take. Um the step where you say look in the negotiations right they come to a few points where you say look we just we're just going to have to say no. Um and it's like look we just can't agree to that deal. They wouldn't back off and I couldn't agree to that deal. We just have to say no. And then there was a couple weeks that lapse and you don't know what's going to happen.

So you purgatory. So you could get indicted in they can indict you any moment, right?

So that's their choice. You you you already said no to that to that. There were like a couple periods of like that and then oh my god in those in those couple weeks you're like you're mentally thinking okay I can't travel anywhere. Um so I I might have to get used to this life of just living in one country and be very careful etc.

there might be some sealed indictment that that's not public the at any border that you cross and u interestingly they come back after two weeks and they say okay we can negotiate again and then you're like what do you think is happening over there well no I think that's a now looking back that's a very that's a very useful negotiation tactic for me or for anybody in my situation for the silence uh yeah the silence for anybody who's going through this on the receiving end you only go through this once you're not experienced this is your life I mean there could be a red sealed red notice against you um and this is the life they have to deal with going forever and they don't like this thing these things can stay there for like decades for them they do this every day this is like this is their daily job right so and but they I think they're smart enough that they know two weeks is about the optimum time because longer than that you really get used to it and when they come back to negotiate you're going to say no right it's like look I'm already used to this right so like if you leave the guy in the situation for too long interesting interesting so so they're very skilled in this type of uh mental uh uh uh work, right?

Whereas Yeah. So, there were some really tough periods and for this type of stuff, you don't get used to it. Um you it's it's mentally challenging. How did you get yourself to a place to agree to the final terms?

After a lot of negotiations, we're like, okay, um basically said, okay, I validated a single uh single charge of a banking secrecy violation, which is a registration failure, which is a federal crime. It's it's serious. Uh but no one went to jail for this in history. Um and um there's no there's no uh sorry that charge that's more technical.

How does that relate to the perception of what was in the media at least in America which is money laundering and aiding at abetting folks and not doing KYC and not doing AML versus the actual charge. Are those two things connected and they're equal or these are sort of disjoint perception versus the actual specifics?

Sure. I can try to explain my understanding. I'm not a lawyer. So I want to make a small disclaimer here. Um this is my layman understanding could be wrong.

Uh there's a first my understanding there's a first level is like banking secrecy act violation which is a failure to register. Basically you serviced we service US users without register as a financial services company in the US.

So that's a you thing that has nothing to do with the user themselves doing anything nefarious or bad.

No, you did not register with the proper authorities to say I'm going to take on US customs.

And so that's number one, right? So that that that's the bait that's the kind of bait layer. Okay. On top of that you can say look you didn't have adequate KYC AML procedures. So your all your procedures are not strong enough. Um so uh uh so that's another that's another level which even even if you're not registered you're also supposed to have good KYC etc. AML procedures. Um and those things are not and those things people think that's a black and white thing. In reality it's not. Uh it's how well you do it. Uh which systems do you use? what how do you do this?

How many people do you have? What's your standard operating procedures? Yeah.

Yeah. So there's actually a lot of details and then like uh quite a bit above that in my understanding is if you have somehow known and facilitated uh bad transactions. So you can have a weak AL pro AML program and that didn't catch all the bad players but you you don't know that.

Right. So it's not like you're intentionally facilitating that.

It's not robust.

It's relatively naive but it's there.

Yeah. versus this is I know this to be bad and I'm enabling it to happen regardless.

Yeah. Right.

And there's the next level which you personally handling the transactions.

Right.

Right. So which is you know uh you know Charlie Charlie Shramm handled uh transactions for Silk Road for for Ross.

Right. So that's how you know so there's different levels. I don't handle any transactions at all my myself. That's just not my thing. I just don't do it.

And so they said okay Binance number one we didn't register KYC ML is weak. Uh so that those are things we can fine we can agree on that layer one layer two.

Yeah. So we can agree on that for those single charges without any other additional stuff. No one ever went to jail in US history even till today.

Right. So u uh and then the government uh we couldn't agree on the two addition the government want to add two additional charges they call enhancements the three and four. The three and four they said somehow I personally facilitated but they couldn't provide any evidence. They were trying to lean on the company somehow something happened in the company you know etc.

they were trying to use. Were they able to point to a transaction or some No, they wasn't. So this two enhancements the court outright rejected but we decided to we before I went to the US we said we agreed that we will argue that in court right um and also based on I don't want to get into the sort of privileged conversations but like the understanding I went before I went was no one went to jail the worst uh guy who got punished was author Hayes of Bitmax he got six months of home confinement uh for run for for Bitmax and uh when I look at that case he had much more direct interactions with clients whereas I had much less direction. I basically I don't deal with clients at Binance. I deal with users on Twitter but not like you know the Bance back end kind of thing.

So I felt pretty confident that you know we should be in a fairly strong position and that's the best thing forward.

Right. So you're like we agree with this. We agree with this. We're going to really debate this in court. Layers three and four. I'm going to come to the US.

Yeah.

And we're going to hash it out in court.

Yeah.

So you land in America.

Yeah.

You go into the courtroom. you start this process, what happens?

So yeah, there was quite a lot of details there. Uh first of all, the first like the first day you go you go and plea, right? So the plea the agreement has already like debated by the way. Sorry. And where you're staying in a hotel?

I was staying in a hotel. Yeah, I was staying in a hotel in downtown Seattle.

Um is your family with you or No, my family went to join to to Well, not my not my not my not my kids. Um but my sister and my mom went to join me. Um I didn't want my kids to go um they have school and and then my partner has a business to run. Um I was already like no no longer running the business.

Yeah.

So I didn't want to drag her away from from from from that.

So um yeah so my sister my my my my mom and my older kids with with me and then um uh yeah so that's and then I was stay in a hotel um and then the next morning go going to court. Going to court the first part of the process is the plea right. The judge asks you, "Do you understand this paragraph, this paragraph, this paragraph?" Just say, "Yes, yes, yes." the the paragraphs were already like negotiated like out of the wazoo by the multiple so many lawyers over lawyered over lawyered and you the um so so you know and then you then the lawyers debate about you know the the uh they didn't the first case when I after the plea they didn't debate about the charge they debate about my bail my bail condition right so I got a post bail u my lawyers argued I should be allowed to go back to UAE waiting for the sentence three months Later the government argued that um uh I may not come back.

So they want me to stay in the US and they said they will not restrict me in my movement in the US because I don't I don't I don't I I don't possess any harm to the community. They argue about that the the the magistrate judge the first judge approved me leaving the US to go back to the UAE for 3 months which would which would have been great. And then the the the government appealed that uh my lawyer says like in his 40 years he never seen a appeal on a bail condition.

Wow.

And then he said well this guy is a ton death uh because they will this will piss off the courts which will actually be my favor. And guess what two weeks later the court ruled ruding in the government's favor and I was kept in the US. So I was kept away from home uh for three months. When three months came that hotel I was free to travel in the US. I was like well I'm stuck in the US so might as well travel. Uh I had a sister my sister have a place in the US. So I was staying with my sister for a bit of the time and then I was traveling um just cool just to try to keep myself cool.

Chill. All right. Um and then 3 months later the government requests for another 3 months extension. So now I have to stay in the US for another 3 months longer waiting for Now were your kids at this point coming to see you at least so that they could come see you or No, I I did not ask them to come and see me. Um so you didn't see them for six months?

Uh yeah and well actually I didn't see them for that year. Yeah. For Yeah.

Yeah. So uh and then so the government asked for another 3 months extension then on April 30th 2024 uh that's my core date and then a week before that is when both sides submit their their request the government request for 36 months which is twice the maximum sentencing guideline for the worst case scenario for me. Right. So the court said like then this court had never seen a government asking the court to ignore the sentencing guideline. Did you find that out for the first time sitting there in the court?

No, just a week before the court because the government had to make the subm submission. There's a written submission before.

How did you react to that?

Well, not good. Right. So, uh and then my lawyers also the my lawyer told changed before they said, "Oh, you can probably get home." They said, "Look, the judge most likely is going to split the baby." So, if the government's asking for 36 months, you're asking for probation. The the government most likely to pick some number in between, right? So I was like, "Okay, that's not good."

Wow.

Yeah. And also 5 days before my sentencing, um on April 25th, Senator Elizabeth Warren went on TV to say to declare war on crypto again. Um so this is like 5 days before my sentencing. Um and he wrote an open letter. She wrote an open letter to the DOJ saying all this stuff. Um which is actually most of it is is is not correct.

So uh yeah. So then that's and April 30th I got sentenced and then the judge the judge said a bunch of good really good things about me. Uh I have all the excerpts in the book but then at some point the judge says but and then you like okay that's not good.

Wow.

Yeah. And then I got forward that's how they start the sentencing.

They're like he's telling you all the good things and then he gets to the butt and you're like oh my god.

Pretty much. Pretty much. Yeah.

Wow.

Yeah. So uh the the lawyer still debate the sentencing on the April 3rd is the lawyers debating court about no this ar that's when the two hazmats got rejected u by the court like my lawyers argue like no this and that uh this I never touched any of transactions I'm not aware this things just layers three and four of the accusations got thrown out.

Yeah. So um and then uh they argue about you know what's what what should what should what the recommended uh sentencing should be. My lawyers of course argued for either uh home uh probation uh or home confinement at the worst case, right? Um and then the government argued like this guy's really bad guy, you know, this case is really big. Um and we should punish him really really hard with double the punishment of any legally recommended punishment.

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Uh 36 months. Um so the judge landed at four.

How did you deal with that?

It was difficult at at the beginning, right? Um it wasn't a full month. It was am I going to be safe?

Yeah.

Right. So if if if like if you tell me like I'm going to go to this place for 4 months. Am I I'm guaranteed to be safe?

I'll be okay. I be like, "Okay, fine. I I just deal with it." But the uncertain part is like uh also right after the sentencing, uh um a bunch of the big media wrote that I'm going to be the richest person to ever go to US prison.

Uh and or and then my lawyers plus prison consultants they say well given all the all this coverage what is a prison consultant that's a whole industry of some guy who advise you what prison is like and give you advice and stuff like that how to live how to yeah so that's a whole big industry that's growing because of the prison population is growing in the US so anyway so the prison consultants like given the highprofile coverage you are a prime you're the probably the biggest target for potential extortion in in in prison. So your safety is going to be a issue. So that's the thing I was worried about then. I was like uh so how how do I deal like you know you go in and they you don't have anything, right?

Um how how do you how do I make sure that I stay safe? Um uh that's like the the top consideration, right? So you you're really thinking about how do you do that? So well you know um you talk to a lot of people who prison consultants are usually like um exgards ex wardens.

There's another group of guys who people who have been to but those guys are in prison but they working there. They're not they're not inmates. There's another group of guys who've been into prison prison like know they they were there for like as a inmate. So you talk to a lot of those guys. Um and then uh you figure out what prison is like. Do you make friends? Do you not make friends?

you get advice on like know if somebody comes up on to you on the first day and they're really really friendly don't take anything from them because know they will ask for 10 times more favor back later on if you don't then they stab you and stuff like that so um I got a lot of different advice but at the end of the day you just got to go and face it right so um um I learned what I learned is actually the US prison system so vast 2 million people stay in US prison the US government spends perm more on prison than the on education on schools right so That's know how much uh how big the US prison population is. And uh because and there's 50 states and everyone every state has a different system. Uh the state prisons, there's federal prisons and each one is like a mini city. They each like the prison I went in has um has 2200 inmates. It's like a small city. Um and they each have their own rules, etc. So I got some advice um but many of those advice are not really useful. But when you go in, you just got to deal with it. Yeah.

So, you get sentenced on April 30th, you said.

Yeah.

And when do you start?

So, when you get sentenced, you don't know where we don't know which prison you're going to. The court makes two recommendations. Um, and then um uh usually you will receive a letter in but you're you can be in the hotel or doing whatever and then you have to check in basically on some date like you have to go. So, in my case, the judge ruled that I don't need supervision which is very unique. Um then I don't have to check in. So I just have to sit uh I just have to wait for a letter uh that comes to my sister's place which is a address I I register with a court. In fact the the the government the DOJ in their request they asked me to be uh pre-manded uh meaning I'll be taken away with in hungcuffs.

Uh I think they really wanted that photo for PR reasons but the judge said look he's not a risk. He's not a flight risk.

He's not a risk to society. I'm not going to do I'm not I'm not going to do that. In fact, the judge added one sentence that said, uh, he doesn't he does not need supervision, which is actually a very interesting legal clause I learned later. So, this is why when I finish my sentence, I don't have probation. I there's no parole. I don't I don't need supervision.

Oh, wow.

So, um, uh, so there's some really interesting stuff. Well, interesting stuff that you learned.

How was that period for you?

Did anything bad happen or was it Luckily, nothing too bad happened. Uh, it's not it's a really bad experience overall, but nothing like no physical harm. uh there's no fights uh there's no um there's no real extortion what I found like so my prison consultants tell me like know when you go in don't join any gang stay to yourself uh uh just you know just just stay to yourself uh be quiet stay out of sight just the minute I walked into the prison gate the guard says well you're going to need some protection here um I I hear the Pacific Islanders are hiring so you might want to join them like that's like this is literally like the minute I walked through the gate one guard was saying this to me.

Wow.

I was like, what does that mean? Right.

Um, and then, you know, after the whole day, the first day was like the first day is pretty like they take you through so many process. You strip search. I talked on CNBC like, you know, they they strip search you and then you move to your unit, which is like, you know, 200 inmates there. Um, it's like three rows of cells, 20 20 cells each facing each other, three floors, and there's a common area in the in the bottom. Um, and there's like 200 macho guys looking at you and you know, you walk into a cell and then um, but what actually found out is um, they organize prisons by race. Uh, so by ethnicity uh, they group uh, so if you are a Chinese dude, they group you with a Chinese dudes. Um, and if you're like a white guys, they group you with white guys. Black dudes group with Mexicans, Spanish guys, no, they they put them in one group. Um, this actually does avoid a lot of conflicts.

um you are more likely to get along uh with people of your own ethnicity in terms of culture, customs like know Arab there was one or two Arab uh uh guys that you know they they pray they know they have a different schedule. Um so uh they put you in groups by ethnicity and the guards actually incur the prison encourages because it reduces uh fighting.

Oh wow. Um and then once you're in your group, uh if you have a problem with somebody else in somebody some other group, there's a group rep and the rep will talk about it and you know there's like a hierarchy and so u union reps kind of like a union reps. Yeah.

And then they come together and they hash out.

Yeah. They say look step stand down. We walked we walked through it. So uh so there's a system to it but I I I didn't know any of this right. So I walk in and then this um half ch half Asian looking dude comes to me say look u my name is Chino um welcome to our group uh he says car welcome to our car I was like what what should I shake his hand should I not like am I joining this gang this like it's yeah that's crazy yeah and this this guy is a Filipino German mix uh there's not enough Asians so they kind of group anything that's kind of Asian and they also group the Native Americans plus plus Pacific Islanders like how the Hawaiians into the same group. So our group only has six people out of this 200 people. Um and I was sent to a low security prison.

I should be eligible for a minimum security prison which is one one level lower where most of the white collar crimes go. But because I'm not a US citizen, uh they put me into a low which is where all the drug laws are. So uh wow.

Uh yeah. So that's a it's a crazy experience. I have quite a lot quite a quite a lot of details about this part in my upcoming book. What was the first thing you did when you got up?

A good shower. A good meal. Um the when you first get So the shower is like literally like you know box this big.

This is like a this is like a a cowboy uh bar door like that covers the middle part. They can see your legs and see see your head. Um but it's hard to take a shower without touching the wall. Um so the when you get out of prison the first time it's like taking a shower no you no longer need to touch the shower wall.

That's like a luxury that's a luxury.

And uh also um uh there's very limited fruits, uh very limited protein, like good like proper protein. Um there's a lot of carbs, uh a lot of like you know uh bread, uh uh uh flowers, fried stuff.

Um very little veggies, very little protein, very little fruits. Um I haven't seen a whole fruit for like months. When I saw when I got out and saw like a plate of fruit, I was like, "Wow, that's that's a luxury I haven't seen for a few months."

Wow.

Yeah. Did you immediately just go back to the UAE?

Yeah.

Yeah. When I left prison, it took took me about six 26 minutes from leaving the uh the the the prison door to getting on the airplane and flying out.

What were you thinking? Were you saying to yourself, "I understand where they were coming from, and I was at least vindicated on the parts that I felt were overreach.

I can see where they were coming from with these first two things." Did you say that to yourself or did you say this was a total railroad and this is completely unfair and how did this happen to me? Why did this happen to me?

What were you saying to yourself?

I have some restrictions on some on what I can say about the agreement, the plea, etc. So, um I I'm just talking emotionally.

Emotionally, I just want to be I would just want it to be over with. Um and remember that when I first got out, this is still the Biden administration. The election has not happened. Um, and uh, uh, it wasn't clear who's going to win.

It wasn't clear the U. The US policy is still the same.

You went in when?

I went in on May 30th, 2024, and you got out four months later.

Uh, September 27th is the day I fully got out. The election was in November, right?

And by the way, sorry, at that point, you had been in America for a year.

For you hadn't seen your kids in a year.

Yeah.

Yeah. So, at that point, like, I just want this whole thing to be over with.

Um, and I thought they will continue.

Well, I was thought if they if the policies continue, then you will still be anti-crypto uh policies, um we'll just whatever we'll just survive however we survive. Um so, um yeah, so that that was that was kind of the mentality.

So, when you get back, had you come to terms as well with the fact that you couldn't run Binance per se and that that was part of the plea and uh yeah, so I'm actually okay with that.

Uh stepping down was really really hard.

Um I actually cried out of it and the the only other time I really cried was like know when my father passed away a few years ago. Um but after a few after coming back uh you know I was actually quite happy not to run Binance. I have a lot more free time. Um and then if I step down myself people say hey this this guy ran out of stamina but like now I can't run Binance. So uh so it's not my fault. It's not your problem. It's not it's not my choice.

Right. But after after a while I was like know there there other there are other very useful meaningful things I can do with my life. Uh I am I think overall I'm in a very fortunate position right um I have resources um I have enough money to do whatever I want to do uh in terms of amling projects and businesses etc. Um including like know Google academy free education stuff like that.

Yeah I wanted to talk about that in AI.

Yeah. Yeah.

But before I do that let's just do a little bit of the final kod here. Tell me about the process to start getting a pardon and getting it and what you had to do and Yeah. So the so on the pardon um I don't think anybody knows what the pardon process is.

It doesn't seem like there's a process.

Like I don't even know what the process is. So what the process is you find a lawyer who writes you a petition who put all the arguments why you were you should be pardoned why you know you were over overly prosecuted etc etc right and why you're a good person. And a pardon what is it for? Is it effectively to recognize overprosecution?

No. Partnership partnership er you raise everything you had you had before. So you're you're now a very normal person.

But the reason to be considered for it can be anything.

Can be anything.

It's really just the discretion of the president reading the petition.

I think so. Uh well based on my understanding based on my understanding is um uh the constitution grants the US government or the US president to give partisans and that's as about that's about as much detail as it says I think.

Right. Okay.

Um and then how he does it.

So it's really about the social norms in that moment and then how he interprets I think so those social norms.

Yeah. And then you know historically most presidents pardon on the last day.

Right.

Exactly.

And then Biden I think started uh pardoning some in between and and he also did pre-pardons which is which is which is a bit new which is new and also crazy.

Well it was very new. Yeah. I was largely around co for for for that but yeah that that really caught a lot of people. He he also pre-pardoned his son for some for some for some period.

That's right.

Biden prayed.

It wasn't just the co stuff. That's it wasn't just a co stuff. It was like a period where nobody where a period of time where nobody even talked about.

That's right.

It was like why do we need it to That's right.

But anyway, so the process I believe is there's no process. The president can do whatever they want and then u so you petition and you wait and then uh there's there is a pardon SAR in the white house. Uh I think her name is Alice Johnson. uh she also went to prison for many years. She wrote she she wrote a really nice book which I read um but your lawyers you know pink her say they need a status update they need a status update and there's no no and then suddenly it happened. So uh uh that's kind of my the the uh extent I know about the pardon process. I don't think anybody know I don't think that's a fixed process. I don't think anybody knows what that is.

The question that some people can kind of jump to is they think what must CZ have done to try to get it. Do you want to put that to bed?

Well, I didn't do much. I didn't do anything. And then but I think look, um, without the apartment, it's quite hard for Binance to enter the US in a in a proper way. I think if you because you're the Ubo.

I'm the UB. Yeah. So, uh, and B I'm the UBO of Binance and Binance US, right?

Without a partner, Binance, Binance is severely limited to do stuff in the US, right?

Uh, if US wants to become the capital of crypto in the world, you cannot have not you cannot not have the largest player.

you cannot not you cannot have US people not be able to access the largest liquidity pool.

Yeah.

Uh in crypto and also we're the we're also one of the largest crypto ecosystems. Uh so I think uh my guess would be that look the president is a pro crypto president. Um you obviously um he's had his own issues like the debanking. Exactly. Where he's felt what it feels like to be targeted.

Not only debanking he got 34 criminal charges.

Yeah. Right. And he got like one of the I don't know all the other charges but that as well.

When I was in prison I saw on the prison TV that he got 34 criminal charges like and one of the charges was he brought some document to his bathroom to read.

That's like that's crazy, right? So I think the fact that he went through that do the Biden DOJ will probably help me a lot to get the pardon because he will sympathize. He he knows how aggressive that DOJ was, right? So um that's that probably helped me in some way.

So how do you spend your time now?

I'm still getting pretty busy now. So I do giggle academy um you know this free education platform. I consult with many governments on uh to help them to putting so sound crypto regulatory policies. Um I get involved on the investment side. We we invest in the um blockchain AI biotech um the very active team um uh doing investments and then uh this is within Binance or outside of this is outside of Binance. this is a part of easy labs and then I also help like mentor coach a few guys in the a few funders in the B&B chain ecosystem etc. So between all of those things, I'm actually pretty busy.

Tell me about Google Academy.

So I thought no, it's possible to uh develop fully digitize all education content. And why is that important?

There's some numbers. I think 7 700 to 800 million adults do not are illiterate. Two two-third of them are women. And on top of that, there's about 500 million kids who are not in school.

So if you add all of that up, that's like 1.2 billion people. Yeah.

Uh who are not educated. Uh and this 12 12 13% of the world population.

Yeah. And uh these are all in really poor areas. Uh they there's just no schools around or they just couldn't afford to go to school. Um and the schools are not very good today either.

Um the schools are like you know they the schools average you out.

Yeah. No you um you have a classroom and how is the software designed?

So it's just an app on a phone uh on a phone or tablet. It's just an app. Um I believe that we have enough technology with you know gaming understanding of human psychology with AI a single app can deliver all the education content you need and we can do that for free.

Have you looked at versions of this like alpha school and do you have any opinions on that?

Yes. Yes. I think alpha school is great.

Um Alpha School is really really good.

Um uh but you know it's high cost high cost right. So uh uh it's more I think um I think Joe's software is called time back. I think that's what it's called.

Yeah.

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Have you had a chance to see?

I have not played with a with a lot. Uh I did meet some of the founders there and some of the key executives there. Um uh they target a they solve a very hard problem of making making the existing education better where I solve the other end of the problem making the education accessible, right?

Uh hopefully better later too.

And so your goal would be that this is widely proliferated.

Are there schools in your view of how giggle works or No, I actually don't want to do schools.

Uh, I I want everyone to learn from one app.

The software is very reward oriented.

Yeah.

Badges.

Yeah. Yeah.

I'm just going to ask the obvious question.

When I looked at it, I was like, well, badges is like a trail of breadcrumbs to like tokenize and earn and payments. Am I just making this up or?

No. Uh, so I thought really hard about this. Um, but I res I will for a very long time resist issue a token on the gold academy. This has pros and cons. Uh when you issue a token, you can do the rewards. You can earn uh learn to earn.

Learn to earn. Exactly. You can do a bunch of stuff. You can do you can incentivize teachers. You can to create content.

Yeah.

Um that's good. Um but the uh for me I want to avoid the token because of me, right? Because if I do a token, everyone wants to buy the token and everyone on the platform.

People want to speculate on the token.

People the then I won't be able to tell if people are they real kids learning or they just farmers that that are trying to farm the token. Yeah.

Um, I want to rem uh if I issue a tok if Google issue a token, everyone's going to I have to be honest. I think giggle sounds really incredible, but that was where my reptilian brain went was the everyone thinks about that obvious thing, right? Yeah, exactly.

Um, but I want the giggle I want to be a real free education platform instead of a token platform instead of some crypto thing.

Right. So if if there's a token then people is going to focus on the token.

So your goal is that you'll just deficit finance this and just continue to kind of proliferate this.

Yeah. Yeah. So that was my goal. But what happened is um there's a community project that donates um donated like $12 million based on 12 million$12 million US based on memecoin. Um and this is not some like and I've only spent like maybe three $4 million on the entire project so far.

Yeah.

So now you know it's actually net like you know it's hard to give money away.

Yeah.

So uh it's hard to give money away with positive impact.

With positive impact it's very very difficult. So u very difficult.

So uh yeah. So my plan is I will fund it for as long as it needs to reach that goal uh of a fully um fully digitized delivery of education in a gamified sticky way. Let me ask an AI question for a second.

Yeah.

You said that AI is this third pillar of your life that you see these big waves, right? Yep.

One of the most interesting things about AI is that when you basically get one level below the English and you start to look at the embeddings and that the layer of embeddings, what you start to see is that it's this machine readable language. It's not English.

Yeah.

And there's a richness of information there. It's perfect for agents.

It can traverse it. You can cipher query it. You can do all this stuff that allows you to make really incredible leaps in productivity and otherwise.

Yeah. It stands to reason that agents are also participants of commerce and need payments and you know and I think you've said this is like probably the largest user of crypto at some point in the near future. Describe that vision for us.

Yeah, I think it's it's it's fairly straightforward. I think as you said right I think it's very clear soon we're gonna each of us going to have like know hundreds or thousands or millions of edgings working for us in the background and they will be transacting they will be they will be moving money around right so uh in theory if I want to listen to this podcast you know your people should pay a few cents to to listen to it um whatever economic model that you want you more than that CC sure of course sure but there was some economic model right uh right now u you know even last year we talked about aging is buying tickets for us. It's not quite there yet, but you will get there, right? Uh they will book restaurants.

They'll pay they'll pay for hotels for us. Um and then um uh the agents can transact a million times more than us.

Yeah.

And they're not going to use banks. Uh banks just won't be able to Well, banks won't onboard and AML KYC an agent. Doesn't even make sense.

You can't do a KYC. They It doesn't make any sense, right? So, uh but also what agents will do is they'll transact at a transaction volume and at a rate. Yeah. It'll make the traditional network's head spin.

Exactly. They're just not going to be able to support it.

Yeah.

Right. And also um even stuff like investments or trading, right? So today, you know, you open the Binance app, you look at a chart, you have to like, you know, click on a price level and you have to type in the price and a green or red button. That shouldn't be the interface. The interface should be like, hey, look, convert 10% of my stable coins into B&B. And then you'll figure out, okay, if you have a large position, you'll do slowly over time. Uh if you have a small position, which what be one one market order? Um, all of that stuff should be just happening in the background. All right. So, the agent can do this for us. Uh, you soon you will be able to.

What is the most viable payment system today that agents could rely on?

I'm actually not too sure. Uh, I don't think there is any one that's super that's what crypto project today do you think comes Oh, you mean crypto?

Yeah.

That agents could use theoretically.

Again, it's early days. I don't want to speculate. I don't want to name any specific projects. Um, it'll cause some token price fluctuations. Um but quite a number of people are working on it. Uh so especially recently with a more like a AI agent social network thing. So it's getting more and more hype.

Yeah. Um and uh yeah. So I think you you'll get there.

Let me ask you about crypto in general for a second. What is the role when you see a lot of stuff around free speech? What is the role of privacy in crypto? One of the things that I struggle with. If you ask me am I a Bitcoin maximalist? I would say no. Even though I was early, I think my biggest issue with it is that there's a lack of fungeability, which I think is problematic to get to mega scale and then there's a lack of privacy.

I agree. It's probably the biggest thing that will hold Bitcoin back from being ubiquitous. Where does privacy play as the world evolves as you see it? I think privacy plays a very fundamental role in our society. But right now, as you said, I also think that uh Bitcoin and most cryptocurrencies do not have enough privacy features.

Yeah. Um I think when Bitcoin was designed it was going to be pseudo anonymous but the fact is every transaction on the blockchain you can trace especially now you have a centralized exchange with KYC.

Exactly.

Um and you know if you have like it's actually very easy and by the way we go always back to the same argument which is it always goes back to the corner case of well somebody's using this for something illicit. And I say there are those use cases, but the overwhelming majority is you buy a pack of gum, but tomorrow you may buy, you know, you may want to buy a certain movie or a video game, you may want to buy a cigarettes. And it's not for me to judge.

Yeah.

And dollars are funible in that sense.

There's complete anonymity. We have no idea about what it was used before that I got my hands on it.

Yeah. Well, there there actually real applications where privacy is extremely important. uh if you book a certain hotel and people know that hotel address like blockchain hotel address receiving address they will know that you will be in that hotel. That's right. That's a that's a physical security for for you.

That's right.

Right. So there there are real use cases where privacy is very important. This is why people don't publicize their home addresses online.

That's right.

In many countries if you if you reveal somebody in Japan if you re review somebody's home address that's illegal, right? So uh um so there they're they're real there are real use cases for privacy and which Bitcoin uh most cryptocurrencies currently do not provide.

Yeah.

Um there's a counter argument okay law enforcement wanted to track down bad guys that can be done uh even with no that can be done. Um we I'm supportive of that but there's fundamental privacy issues. So uh I do think that in the future we uh as an industry need to figure out how to uh evolve the privacy features which no one no one's really focusing on right now. There's a few privacy focus of coins. I I was going to say no one. Um but they are they don't have much market cap. They don't they don't have much size.

Right.

Yeah. Tell me about the book. It's coming along. It's a it's a it's a it's it's a always a longer project than I anticipate. Right. What was the point of it? Was it is like catharsis or is it to make a point? Is it to tell the story?

All of those things?

A bit of everything. It started because I was bored. uh because I was I started drafting when I was in prison. It was just to get keep me busy uh because I don't want to deal with you know I don't want to be chatting with it just keep me busy in in prison. So I started drafting it and typing on on a very dumb terminal and sending it to my assistant. Um and then once I got out I was like well I have enough that if I spend a bit more time on it I can have a book. And then um uh but but editing a book takes so long.

uh every every every pass takes like two three weeks if you want to edit a book because like know right now it's like uh 95,000 words so it's like 300 pages um and then um I'm also editing the English and Chinese version so uh uh so it just takes longer but the point of the book right now I think is just to get the story out I think there's many misconceptions about who I am uh what we what I went through what are those misconceptions do you think well there's a lot of negative media about crypto there's a lot of negative media about uh um uh CZ, Binance, um the entire industry and to some extent I think there's a lot of negative media about Trump the party etc. I that part is not too heavy in my book.

I just know this is as simple as we we talked about on this podcast but just for people to understand like you know who we who I am uh who B to some extent by extension who Binance kind of is from my perspective.

Is it important story for your children?

I think so. Yes. Yeah.

Why? Um I think it's important for them to un like no they see they of course are more on my side. They know all this media uh not the right stuff. Uh but they haven't I didn't have time to explain the story to them in this level of detail and I think it's important for them to read this and they will understand a lot more detail than what I what I'm able to tell them verbally or in person etc. Uh even though the book doesn't contain everything but it's as much as I can put in. What do you want for your kids? I want them to live a healthy and happy life however they define it. Uh if they're happy just being a normal person then that's good for me. Uh if they want to do startups and you know build companies and that's great. Um if if they want to be artistic etc that's great. If they want to do human humanitarian efforts charity that's also great.

Um whatever they figure out what they want to do I just want to be there to support them. Um uh yeah that's how similar or different is that from what you got from your parents? pretty similar. My my parents didn't have pressure to on me. Uh my pre my parents didn't pressure me to be this and that. Like they didn't they're not even like normal Chinese parents where they want you to be a doctor or engineer or lawyer, engineer, lawyer. Those that was my parents. Yeah.

Okay.

My parents didn't do that with me. My parents like you can do whatever you want. Just my parents said to me like very unche very unche u my parents said don't hurt yourself. Don't hurt other people. Right. So don't do drugs. Uh don't get into like you know don't don't get into crime. Um, and then don't hurt other people. Uh, so that's as simple as like as I got from my parents. And uh, yeah, I think there's a lot of people that probably hear this and they'll probably think that, and I think this is a real compliment, by the way, so don't take this wrong when I say this this way. That could have been me, too.

Yeah. I think that we glorify success in a way that makes it seem like it's impregnable. It's like this very quicksotic thing that happens and it's not that.

No.

Yeah.

And the reason why I can say that is that when I spend time with you and I'm sure now with the people, you know, rounding two hours with you, they'll think, man, this guy is really normal.

It's a nor I'm a normal dude.

Exactly. A lot of people say that like, you know, to me as well in this weird way, it's like you're just a normal guy. And it's like there's something really valuable about working on things that you like because then the time just passes.

Yeah.

And you kind of just put your head up and you're like, "Wow, okay, there's something new to try. Let's go try that.

Let's go learn something." I want to give you a chance to speak to all these people who are probably thinking to themselves, "Wow, that could be me."

Absolutely. I think um number one, I'm a normal dude. Uh I don't I don't think I know I'm not super smart. Uh but you don't need to be super smart to to be successful. You can't be too dumb, but you can't be you don't need to be super smart. There's a lot of other things like you know principles, values, uh emotional quotient, a lot of those those things come into play. I think um there's a lot a lot of luck as well. Um but I think for most people um you are in a situation where you are you usually cannot change the situation. So what you can only do is change yourself, right?

So if you just push yourself a little bit every day, you don't have to push yourself too hard. You too you push yourself too hard, you're gonna burn out and you're not going to last long. But you want to push yourself to like 120% 110 130 somewhere in that range where however you can last long.

Yeah.

And if you do that for like 30 years and you get lucky, you will most likely be relatively successful. You might not be a you might not be a billionaire, but you'll you you'll have a very comfortable life. Do you think that it's important to maybe dispel the myth that being a billionaire is not everything it's cracked up to be?

Oh yeah, absolutely. U money is money.

So in in our life there's a few if I kind of picture spiderweb graph right money is only one tangent.

Yeah.

Right. So once you have enough having one thread it's one thread. Having more doesn't help you. Uh in fact there's health there's family um there's other things that can keep you happy like your values uh contribution positive impact like that's intrinsic internal rewards that you feel very happy about. Um a lot of those things are extremely important. So once you have enough money on this graph you don't more doesn't make you happy.

Sometimes you have more, sometimes you have less. Um, then how's your health?

Also, like there's another dime, time.

How much time do you have? Can you use your time the way you want? Can you are you working on the stuff you you want?

Are you spending with the people that you you want to spend with?

Yeah.

Um, and are your family healthy? Uh, you'll be you were very lucky if your family is all healthy. Like that's that's already a huge gift.

Um, so uh and then your mental health is also important. How to deal with pressure etc. I somehow am very lucky to have a very sort of stable uh mind. So I think all of those things are extremely important and all of those things you can improve on uh instead of just money.

A lot of people only chase money but sacrifice everything else. They work really really hard. They don't have free time. They are not spending time with their family. Their health deteriorates after 10 20 years.

They don't enjoy the time that they're spending on these things even to get the thing that they have so much of that they don't need.

Yeah. Yeah. So this is also the this is also the part like you know I'm actually very grateful that I don't have to run Binance anymore now I have more time.

Yeah. Whereas before like even though that was very enjoyable but on my other questions I was not doing well.

Yeah.

Yeah. So yeah.

CZ thanks for joining the online podcast.

Thank you. Thank you for having me.

I'm going all in.