Binance's new CEO and He Yi's first joint AMA: Analyzing the management's choice of the new CEO, Binance's future plans, and compliance strategies

整理：Loopy Lu， Odaily Planet Daily

Last night, Binance CEO Richard Teng and co-founder He Yi held a joint Chinese AMA, marking Richard Teng's first Chinese AMA event.

During this online event, Richard and He Yi shared extensively, including Binance's views on reconciliation with the U.S., progress in compliance, future investment strategies, and perspectives on the cryptocurrency market. The AMA covered a wide range of topics, providing a comprehensive discussion on various aspects of the crypto world.

Richard emphasized the trend of increasing regulation of cryptocurrencies by more countries and the proactive positioning of institutional investors in the industry, which will bring more confidence and capital to the cryptocurrency market.

He Yi expressed optimism that the next peak may occur next year or the year after. He also emphasized support for long-termism, stating that Binance plans to support Web3 entrepreneurs by incubating more projects to create more long-term sustainable value.

As one of the largest cryptocurrency exchanges in the world, Binance will continue to commit to providing high-quality products and services to users and promoting the development of the entire cryptocurrency ecosystem.

Odaily Planet Daily has excerpted and edited highlights from the AMA event as follows.

Three Major Commitments from the New CEO

Richard: I have three major commitments: always being user-centric, we will continue to create top-notch products and services that users love, and always prioritize user experience and protection. The second is to work closely with global regulators. The third is to collaborate with global partners to promote the growth and adoption of Web3.

"I Only Made 2 Million"

While mentioning the growth journey of the Binance community, a piece of industry insight made He Yi quite emotional. This segment also drew the audience's attention and was shared across multiple communities. Odaily Planet Daily has excerpted and edited part of the content, with the transcript as follows:

"Hello everyone, I am He Yi. I joined Binance after the Spring Festival in 2014, and it has been nearly ten years now. What has impressed me the most over these ten years is the growth of the Binance community.

Last night, I saw a young person on WeChat. Two or three years ago, when he was still in college, he told me on WeChat, 'I just graduated from college and feel lost, not knowing what to do.'

I suggested to him that he could do Binance's referral program.

Yesterday, he asked me if he could be followed on Twitter, and he told me he was doing referrals. I looked at his income, and he made about 2 million RMB. But for a recent graduate, that's already quite good.

I am also very honored that our community has so many new forces and crypto OGs working together to build this industry. I believe the future direction of this industry is not determined by the visions drawn by a few people. The future direction of the industry is something that we practitioners in the industry will collectively carve out.

Why Did the Management Choose Richard as the New CEO?

Richard: My experience is mainly in traditional finance and regulation, with about 30 years of work experience.

In 2017, I started to get involved in the cryptocurrency industry. At that time, I was the CEO in Abu Dhabi, and I firmly believed that the cryptocurrency industry is a major trend for the future and will have a significant impact on the entire financial sector. While working in Abu Dhabi, we were one of the earliest regulators in the world to start regulating cryptocurrencies. So at that point, I had a very deep understanding of cryptocurrencies, and perhaps it was my rich work experience combined with my understanding of the cryptocurrency industry that garnered everyone's support.

But I want to emphasize that the strength of the Binance team is not solely due to my contributions. We have a very strong core management team, including core members like He Yi, as well as other founders and partners who have made significant contributions to Binance. Over the past two years, we have made many investments and hired many professionals. Therefore, our team is very strong in the Web3 field and in terms of professional talent.

He Yi: Our industry actually focuses on only two things: one is products, and the other is services. I have always been committed to providing the best service for users.

However, as the industry develops, we also need professionals who can communicate in the same language as regulators. So I believe that moving more steadily and smoothly in terms of regulation is a challenge that we leading exchanges must face.

Another point is that, from my personal perspective, I have spent a lot of time in recent years studying how to make a company sustainable and how to operate an organization more efficiently. I believe the most important point is clear division of labor and clear goals. Just like Elon Musk mentioned the concept of entropy in his new book, it is essentially about uncertainty within an organization. How to reduce uncertainty? It is to ensure that there are no unclear roles within the team. For Binance, the best division of labor is that I am responsible for serving users, while Richard is more suitable to serve as CEO.

Is Binance's Opening Price Too High?

He Yi: To be honest, we still have room for improvement in every aspect. Specifically, we have dedicated teams responsible for product development iterations, such as the Web3 wallet issue that is often mentioned. We previously did not invest enough in certain areas, but we will continue to optimize and improve based on user needs.

For me, it is important to focus on user needs and complaints and to continuously improve. Whether it is complaints about Binance or issues regarding certain projects, such as the high secondary market prices of some projects, we also recognize that this is a problem and are actively seeking solutions. We hope everyone stays tuned, and we will strive to meet expectations.

Will the Wallet Support Inscriptions?

He Yi: Although Binance has developed smoothly over the years, we have always been facing challenges. In 2018, Binance did not have contract and P2P trading functions, while competitors already had these features. Now, our contract trading has become one of the largest in the market, and the P2P market has also been established. So, although we started late, we hope to seize the opportunity.

He Yi: The Web3 wallet should provide users with an easy-to-use scenario outside of exchanges. Our peers have been actively engaging in inscriptions, and previous airdrop activities were similar. But I do not believe Binance needs to completely replicate this model; we need to look not only at the present but also at the future.

What we truly care about is whether there are serious projects in this industry that can establish great business models or truly bring change to the world.

I believe one of the benefits of inscriptions is fair Mint, which counters VC. However, after fair Mint, there are so many inscriptions globally undergoing large-scale Minting, and each one needs someone to take over. But not all inscriptions have someone to take over. The current state is still somewhat vague, and whether the next step can lead to the Bitcoin ecosystem remains uncertain; we are still observing and learning.

New things always emerge in the industry, but the downside is that there is always a lot of uncertainty. From the perspective of wallets, Trust Wallet remains the largest in terms of user scale and daily active users internationally. However, whether in airdrops or inscriptions, Binance has not yet optimized user experience and scenarios. In the future, we will further iterate and fill the gaps that CEXs have in the wallet field. I am not sure if my understanding of wallets aligns with everyone else's, but at least I know that our wallet's user experience is currently not good enough and does not support effective airdrop and inscription operations. But I believe these issues will be resolved one by one in the future.

He Yi: Regarding which chains we will prioritize supporting, our main principle is to support chains that have a sufficient number of users. Essentially, trading platforms should not favor any particular chain.

Do Regulatory Fines Endanger Binance's Financial Status?

Richard: Our business foundation is very solid, and our financial status is very healthy. Our capital structure is debt-free, and our spending is very moderate. Although our trading fees are low, our revenue and profitability are still very strong. Paying regulatory fines is not an issue; users can rest assured that user assets are always supported and protected on a one-to-one basis. Users can withdraw their assets from our platform at any time.

I want to emphasize that after U.S. regulators conducted a very detailed investigation into our operations, there were no accusations or findings of any anomalies regarding user funds. This is very important. After reconciling with the U.S., user confidence in us has continued to increase. A few days ago, there may have been some outflow of funds, but now funds are flowing back to Binance very strongly.

He Yi: Whether all businesses in the crypto circle are healthy and whether funds are safe is essentially a matter of simple arithmetic involving addition, subtraction, multiplication, and division within 100. You can calculate the trading volume of spot and contract trades, and then calculate the fees. Binance has not had any major expenses apart from labor and server costs. If law enforcement wants to impose fines, they cannot fine an amount that cannot be paid, right?

Will the Platform Gamble Against Users?

He Yi: As a trading platform, the most important thing is not to participate in trading.

The platform and traders can make more money by being counterparties, but such profits are not sustainable. Because no one can control this market; it is always unpredictable. We have actually seen the lessons learned from FTX.

Binance has been in this industry for ten years; it is impossible to go and gamble against users. When you have enough users, collecting service fees is sufficient, and there is no need to take extra risks; this is also our operational logic.

How to Interpret the Reconciliation with the U.S.?

Richard: Reaching a reconciliation with U.S. regulators is a very favorable development for us. In the early days, we always prioritized users, and there may have been some shortcomings in compliance. We also take responsibility for these past mistakes.

Such large-scale fines do not only happen to us; these errors do not only occur with us. If you look at the top ten financial companies globally, you will find that many financial institutions have faced huge fines, reaching as high as $90 billion, or even $40 billion.

From a compliance perspective, I have been communicating with numerous institutional investors, users, VIP clients, partners, and potential partners over the past two to three weeks. In fact, everyone has a very positive attitude towards our reconciliation. In the past year, some partners may have been conservative, but now many are very actively cooperating with us.

Compliance is a global trend, not just regulations we need to follow. As the largest exchange, we often become the focus of regulators, but now we have weathered the storm and have closed the chapter on past issues.

"We Welcome Reports of U.S. Users"

He Yi: The fines imposed on Binance have allowed us to experience treatment from the top financial structures in the U.S.

When compliance is mentioned, most people feel worried. But in fact, we need to conduct a comprehensive analysis of the reconciliation with the U.S.

After the reconciliation, we cannot accept U.S. users. However, in fact, we had already removed U.S. users from the Binance platform two years ago. If anyone finds that there are still U.S. users trading on our platform, please notify us immediately; we welcome reports.

I believe this is an inevitable development direction for the entire industry, and this is not only happening to Binance; other larger trading platforms that wish to comply with regulators are also undergoing this process. In other words, it would be more difficult if only Binance chose the compliance route while others chose non-compliance. Currently, it seems that the entire industry is facing difficulties together, but overall, the industry is expanding, and the market is growing, moving in a positive direction.

Lastly, I believe that revenue is not the only pursuit. This may sound a bit unrealistic, but for me, for CZ, and even for Binance, revenue is absolutely not the only pursuit. What we truly pursue is to work together with everyone to promote the blockchain revolution, change productivity and production relations, and create a brand new world. Simply pursuing revenue, I believe, is short-sighted; we adhere to long-termism, which will make us stronger.

How Do the U.S. "Compliance Officers" at Binance Operate?

Richard: Let me clarify that the so-called "compliance officers" are not U.S. government employees but rather very independent regulators. They are similar to accountants and mainly focus on anti-money laundering compliance work. This independent regulator can help explain our commitments to compliance and anti-money laundering.

He Yi: I want to correct one point: it is not the government that sends compliance officers to become employees of Binance. In fact, it is stated in the reconciliation terms that we need to hire an independent third-party lawyer or consulting firm. Their task is to oversee whether we fulfill our commitments according to the previously reached agreements, such as whether U.S. users have been removed and whether anti-money laundering measures are adequate. This does not mean that they take over Binance's operations. This is something that may be misunderstood in the dissemination of information.

What Will Binance Labs' Next Investment Steps Be?

He Yi: Recently, Binance Labs has made some adjustments to its strategy, and we have decided to significantly support blockchain startups, potentially at a scale that is ten times larger than before.

We have noticed that many projects received venture capital support in the early stages and then pushed the projects to the secondary market, ultimately being purchased by retail investors. In this process, the true early supporters did not share in the corresponding returns.

We want to support Web3 entrepreneurs who are genuinely willing to adhere to long-termism. Let all ordinary investors and retail investors share in the returns brought by project development, just like Bitcoin.

Regardless of the industry, it ultimately needs to create something, provide services to users, and truly push the world forward, even if just a little. In this process, there may be revenue and profits, while also supporting users and token holders to develop and succeed together. Only win-win situations can last. Taking a quick profit ultimately harms one's own reputation. Therefore, in terms of investment frameworks and thoughts on the industry, I may be a bit traditional, but we still hope to give it a try.

How Do You View the Market?

He Yi: There may be a peak in the industry next year or the year after, but this is just my personal view; some people think this perspective is overly simplistic.

At the same time, we must realize that as the entire industry continues to expand, it may face a ceiling. Cryptocurrencies will be compared with various assets such as gold and stocks. In this case, the growth rate may not be as fast. But I still believe that market cycles will continue to exist. I am relatively optimistic that the next peak may occur next year or the year after.

Richard: Although there may be some market fluctuations in the future, the overall direction remains positive. First, more and more countries are regulating cryptocurrencies, which will boost investor confidence. Second, institutional investors are actively positioning themselves in the cryptocurrency field, which will bring more capital and investment to the industry. Therefore, I am very optimistic about the overall trend of the cryptocurrency industry.

Currently, the global cryptocurrency adoption rate is about 5%. If more countries regulate the crypto industry and it moves towards compliance, the adoption rate could increase to 10% or 20%.