The Power Dynamics of Binance: The Predicament of a 300 Million User Empire

Author: Lesley, ChainCatcher

Prologue: The Birth of a Coordinate

At 4 PM on January 5, 2026 (Beijing time), a seemingly ordinary moment marked the beginning of a new phase in the most dramatic power shift in cryptocurrency history.

On this day, Binance's global services were officially taken over by three licensed entities in the Abu Dhabi Global Market (ADGM): Nest Exchange Services Limited was responsible for the operation of the trading platform, Nest Clearing and Custody Limited handled clearing and custody, and Nest Trading Limited provided over-the-counter trading services. This global giant, which once claimed to have "no headquarters," finally established a clear legal domicile.

It had been exactly one month since He Yi was appointed as co-CEO.

In this month, Binance experienced: an employee was suspended and referred for legal proceedings for using insider information to post content for personal gain on social media; a $100,000 whistleblower reward was distributed equally among five informants; He Yi publicly admitted on multiple occasions that Binance had "poor listing quality, no wealth effect," "products were not good enough," "the gap in wallet products was obvious," "the organization was too large and rigid," and "there were issues with talent iteration"…

From a chaotic era ruled by one person to today's modern corporate structure with three entities, two co-CEOs, and a seven-member board, Binance took eight years.

But building the structure is just the beginning. The real question is: when individual will can no longer cover the whole, and the system has yet to operate coherently, what is this global behemoth with 300 million registered users experiencing?

The Gold and Shadows of the Centralized Era

In the summer of 2017, in an office in Shanghai, Zhao Changpeng (CZ) and He Yi began building Binance. At that time, no one could have imagined that this makeshift team would become the largest cryptocurrency exchange in the world by trading volume within 180 days.

The early success of Binance was built on extreme efficiency—CZ's will was the company's direction, and the people below were responsible for execution. There was no board of directors, no lengthy approval processes, and not even a fixed headquarters. The company moved quickly like a nomadic tribe, strategically navigating regulatory gaps: from China to Japan, then to Malta, always maintaining strategic fluidity.

This model created miracles. By the end of 2021, with the surge in Bitcoin and other cryptocurrencies, CZ became the richest Chinese person with a net worth of $94.1 billion, briefly ranking among the world's top ten wealthiest individuals. Binance processed an average of $65 billion in transactions daily, capturing up to 70% of the market share.

But the other side of the miracle was the accumulation of systemic risks.

In the old era under CZ's rule, in pursuit of extreme user growth, the management often ignored compliance department warnings about "high risks," even demanding to "cancel KYC" to ensure users could start trading within ten minutes of registration. The marketing and growth teams ran rampant, and the compliance department's status was low, often seen as an obstacle rather than a safeguard.

A Reuters investigation revealed the cost of this culture: Binance admitted to prioritizing growth and profit over compliance with U.S. laws. Court documents showed that He Yi was involved in planning strategies to evade regulation. The internal decision-making logic of the company was simple and crude—if it could bring users and trading volume, everything else was negotiable.

This model created astonishing growth in the short term but laid the groundwork for significant hidden dangers in the future.

In Binance's power structure, "listing rights" were the most tempting piece of meat, related to immediately realizable wealth. As the world's largest exchange, Binance's user base and liquidity, along with its credit endorsement of projects, created a substantial wealth effect; "listing means taking off" was Binance's core weapon to outpace competitors in the chaotic era.

For this reason, listing rights were highly concentrated and strongly personalized in the old structure, reflecting the goals and values of the exchange or founding team at that time.

During the phase of reckless expansion and exploration, the early Binance angel system played a subtle role. Nominally a community promotion channel, due to its very short reporting chain that could directly reach the core decision-making level, it effectively became a "fast track" for certain projects to gain visibility. Some people made good use of this channel, which is why it was sometimes difficult for outsiders to see the unified logic behind the listing rhythm—because the logic itself was diverse and even competitive.

Of course, Binance also established its own listing system early on, which remains the foundation of its current listing framework. According to public information, BitWell co-founder Jeff Young participated in Binance's listing-related business, while Buidlpad founder Erick Zhang was more deeply involved in building Binance's listing standards and processes.

What sets this group of "system builders" apart is that they not only understood the rules but also defined them. When they left Binance and turned into project incubators or investors, this understanding did not reset—it became a scarce resource.

From public results, it is known that after leaving Binance, the founder of BitWell had several projects associated with or recommended by him successfully listed on Binance's spot market; similarly, four projects incubated by Buidlpad completed their listing on Binance, claiming a 100% "Binance selection rate." This higher-than-average "hit rate" in the industry is hard to explain solely by project quality. A more reasonable understanding is: when you have personally written the scoring criteria, you naturally know how to get a high score.

Additionally, YZi Labs (formerly Binance Labs) is also a representative in this regard. Despite Binance repeatedly emphasizing that there is a "firewall" between departments, historical data and market consensus indicate that obtaining investment from YZi Labs is one of the strongest "passports" for listing.

According to insiders, the early listing framework was promoted and established with the participation of Erica Zhang, Jeff Yang, and others. The early YZi Labs team also had a voice in the listing process, but later there were significant personnel changes, with several core members leaving around June 2022, including head Bill Qian.

Binance has never publicly explained the reasons for this concentrated departure, but the coincidences on the timeline—the overall replacement of the Loss team (now the Yield security team) and the subsequent tightening of the listing process—suggest that this was not a simple strategic adjustment.

Rumors within the industry involve internal governance issues, but due to the lack of official confirmation, no definitive conclusions are drawn here. What can be confirmed is that after this personnel upheaval, Binance clearly strengthened its internal control over the listing decision chain.

It is worth noting that even during the most centralized period, listing decisions were not solely determined by one person. Insiders familiar with the internal processes revealed that significant listing decisions require signatures from multiple key positions, meaning that even the highest management must seek balance within an established approval system.

After experiencing the aforementioned growing pains, Binance systematically restructured its listing power structure. Historically, there was a centralized Global Head of Product (such as Mayur Kamat), but after Kamat's departure in 2023, this role was split and reorganized. The current model is that the decision-making power for spot listings has been divided among product managers, trading operations heads, and other parallel lines, no longer centralized in a single department or individual. The cost of this design is a decrease in decision-making efficiency, but the benefits are evident—by increasing "veto nodes," any attempts to influence outcomes through a single relationship or channel will face higher coordination costs.

The evolution of Binance's listing system is essentially a history of transformation from personal rule dividends to institutional defenses. But institutional transformation never means the end of problems.

On February 2025, the now-former CEO CZ publicly stated that Binance's listing process was "a bit broken"; in the same year, a leak involving a listing of a certain MEME coin was exposed, once again revealing the fragility of internal information control. These events indicate that even after multiple rounds of power structure adjustments, the inertia of old gray areas remains stubborn, and the soil for loopholes and corruption has not been completely eradicated.

On December 17, 2025, Binance issued a stern announcement, officially releasing a complete listing framework covering Alpha, futures, and spot, explicitly prohibiting any third-party intermediaries from participating, and published a blacklist naming individuals and institutions such as BitABC, Central Research, and Andrew Lee, while also establishing a reward of up to $5 million for whistleblowers.

This announcement is both a milestone in institutionalization and a footnote to the long-standing issues. When Binance needs to emphasize in black and white that "applications can only be made through official channels," and offers substantial rewards to combat intermediaries, it precisely indicates that the previous "distributed checks and balances" did not completely close the gaps of personal rule. Notably, Binance did not designate a "single head of global spot business" in its external announcement. The decision-making power for the spot product line is dispersed among several product managers and trading operations heads.

The $4.3 Billion Turning Point

On November 21, 2023, in a federal court in Seattle, USA.

47-year-old CZ admitted that he failed to maintain an effective anti-money laundering program and resigned as CEO. At the same time, Binance agreed to pay $4.3 billion to U.S. authorities to resolve criminal charges—this is the largest corporate settlement agreement in U.S. history involving criminal charges against executives.

According to the terms of the plea agreement, CZ is prohibited from participating in Binance's daily operations and management and cannot engage in any activities related to Binance for three years. However, the agreement does not prohibit him from retaining ownership shares or from "providing advice."

This is a subtle way of exiting power: CZ is no longer the CEO, but he remains the largest shareholder; he no longer commands operations, but he controls investments; he no longer appears internally, but his name is always associated with Binance.

On that day, Richard Teng, who had long served as a senior executive at Binance, was announced as the new CEO. An exchange facing regulatory pressure needed someone who could engage with global regulators to stand in front. He is one of the few executives within Binance with an "institutional background."

Before joining Binance, Richard Teng held key positions at the Monetary Authority of Singapore and the Singapore Exchange (SGX). In 2015, he participated in the establishment of the FSRA (Financial Services Regulatory Authority) and helped ADGM become one of the first jurisdictions in the world to introduce a cryptocurrency regulatory framework. This composite background also allows him to navigate both traditional finance and cryptocurrency.

The $4.3 billion fine changed not only CZ's trajectory but also began to transform the large ship that is Binance.

In the settlement agreement reached with U.S. regulators, the CFTC (Commodity Futures Trading Commission) explicitly required Binance to establish a corporate governance structure that includes an independent board of directors. Additionally, the U.S. Department of Justice and the Treasury Department required Binance to accept external compliance oversight—Forensic Risk Alliance and Sullivan & Cromwell were appointed as independent overseers, who will continuously review Binance's operations over the next three years.

Thus, in the summer of 2024, Binance, which had been established for seven years, held its first board meeting. The seven-member board gathered around a long table in a conference room in the Abu Dhabi Global Market. Sitting in the main seat was Gabriel Abed, a former diplomat from Barbados; opposite him was Richard Teng, the newly appointed CEO who had consumed a lot of coffee to stay awake.

Among the seven directors, three are independent non-executive directors—they do not receive salaries from Binance and can theoretically make judgments independent of management. Gabriel Abed was elected as the chairman of the board, a choice that carries significant meaning: a former diplomat from a small Caribbean nation, he is neither close to U.S. regulators nor to CZ's camp, making him a somewhat acceptable "intermediary" for all parties.

The other two independent directors were also carefully selected:

Xin Wang is the CEO of Bayview Acquisition Corp., familiar with capital market operations, and she is also a practicing lawyer. The other independent director transitioned from Arnaud Ventura in 2024 to Max Yang, who, according to Binance's official website, is a strategist and corporate leader with extensive international experience.

The remaining four directors are insiders from Binance: Richard Teng, Lilai Wang (a founding member), Heina Chen (co-founder), and He Yi. Notably, Jinkai He was an original board member but has now been replaced by He Yi. Among them, Heina Chen is a relatively mysterious but highly influential executive at Binance. She has long controlled multiple bank accounts of the company and serves as a director or signatory for several Binance entities, responsible for clearing, settlement, and treasury-related matters. In investigations by the SEC, Forbes, and others, she has been repeatedly mentioned as one of the core figures "managing the purse strings" at Binance.

What does this configuration mean? On the surface, independent directors account for less than half and cannot form a majority in key votes. However, from the outside, the significance of independent directors lies not only in voting; their existence itself is a form of constraint—at least in form, Binance is no longer ruled by a single person.

The Appearance and Substance of Decentralization

In December 2025, during the Dubai Blockchain Week, Binance announced that He Yi would serve as co-CEO. As Binance's global user base surpassed 300 million, this woman, who had been working alongside CZ since 2017, finally transformed from an "invisible second-in-command" to a visible center of power.

According to insiders, this arrangement was not a last-minute decision but a governance requirement when Abu Dhabi invested $2 billion in Binance in 2024: He Yi was to serve as CEO in the following one to two years to facilitate the transition of power and governance structure.

This arrangement is based on multiple considerations, the most important being business complementarity: Teng excels in compliance and regulatory engagement but is not particularly experienced in the cryptocurrency industry; whereas He Yi, as a co-founder, has an intuitive understanding of products and markets that Teng lacks. Teng manages compliance and regulatory matters; He Yi oversees products, markets, and user growth, with both lines advancing in parallel.

But the deeper question is: does He Yi's return mean the resurgence of CZ's influence?

Court documents show that He Yi was involved in planning strategies to evade regulation. Media reports citing anonymous sources stated that the U.S. Department of Justice also wanted He Yi to resign during early settlement negotiations but ultimately did not hold her accountable for unclear reasons. The media described it as: the U.S. authorities overthrew the king of cryptocurrency, but the queen remains standing.

Additionally, on January 23, 2025, when Binance Labs was renamed YZi Labs, CZ's name appeared in the "co-founder" section. The name "YZi" itself is significant—it is derived from the "Yi" in He Yi's name and the "Z" in CZ's name. This investment department manages approximately $10 billion in cryptocurrency-related assets.

According to insiders, CZ has a significant influence on investments—his informal opinions on a certain sector or technology posted on X directly sway the judgments of YZi Labs' investment managers.

YZi Labs Invested Projects

Has power really been decentralized? Or is it just a different way of presenting it?

During CZ's era, the compliance team's status within Binance was not high. The company's culture was "act fast, break the norm," and compliance was often seen as an obstacle rather than a safeguard.

But now, everything has changed.

In January 2023, Noah Perlman joined Binance as Chief Compliance Officer (CCO). Perlman's career spans traditional finance and cryptocurrency: he previously oversaw financial crime compliance at Morgan Stanley and later served as COO and CCO at Gemini Exchange. Perlman led the rapid expansion of the compliance team, establishing global AML (anti-money laundering), sanctions screening, law enforcement liaison, and listing approval processes.

According to Binance's 2024 annual report, the internal compliance team has grown to 650 experts, and if external contractors and related personnel are included, the broader compliance team numbers even exceed 1,000. Bloomberg reported in August 2024 that Binance's annual spending on compliance had already surpassed $200 million. This means that the compliance department is becoming one of the largest cost centers within Binance.

More importantly, the power dynamics have changed. Within Binance, if compliance does not approve, no business can proceed. Perlman is no longer just the head of a functional department; he has become a key participant in the company's strategic decision-making.

Chief Compliance Officer Noah Perlman explicitly stated in interviews with CNBC and other media that his task is to find a new "balance," which will inevitably create "friction" and "unpleasant experiences" for the business.

Listing data is the most intuitive measure of this tension. According to Binance's official announcements, the exchange listed 80 new projects in 2021, which dropped to 19 in 2022. During the eight months from March 2023, when the CFTC filed a lawsuit, to November when the Department of Justice issued a $4.3 billion fine, Binance only listed 10 projects—the power of the compliance department to veto has never been stronger. However, in the three months following the resolution of the penalties, Binance quickly listed another 10 projects, nearly matching the total during the entire lawsuit period. The marketing department's impulse has never disappeared; it has just been temporarily suppressed.

Growing Pains in the Institutionalization Process

If the reconstruction of the power structure is Binance's "software upgrade," then the events of October 11, 2025, exposed the "hardware" fatal flaws.

On that day, Bitcoin plummeted from around $115,000 to about $102,000, with a maximum drop of over 11%. But what truly turned this drop into an "epic slaughter" was the system failure of the Binance exchange at the most critical moment.

Numerous users reported being unable to log in, unable to add margin, unable to close or reduce positions, and some even claimed that their accounts were frozen and stop-loss orders failed during the market crash. Within 24 hours, the total forced liquidation across the market reached approximately $19 billion, with over 1.6 million accounts liquidated, setting a record for the highest single-day liquidation in cryptocurrency history.

Social media unanimously accused Binance of "pulling the plug at a critical moment."

On October 12, Binance issued a statement acknowledging that "some system modules experienced brief technical failures under extreme traffic" and stated that it would compensate users who suffered losses due to asset decoupling issues, with two batches of compensation totaling approximately $283 million.

Despite Binance providing an official explanation, the market's doubts about Binance's system processing capabilities and technology did not subside. The technology side is overseen by CTO Rohit Wad—this veteran, who joined Binance in 2022, previously held technical leadership positions at Microsoft, Facebook, and Google for over 30 years.

But the events of October 11 proved that, in truly extreme situations, this system still has vulnerabilities.

If the technical collapse was an accident, the problems exposed during the listing process are systemic institutional flaws.

In February 2025, an article titled "To All Practitioners, Investors, and Industry Observers Concerned About the Future of Web3" sparked industry attention on The Medium. The author listed projects suspected of "backdoor dealings" and "interest transfers," detailing the issues faced when engaging with Binance.

The now-former CEO CZ publicly stated that Binance's listing process had "some problems."

Even more concerning is the failure of internal controls.

On December 7, 2025, reports surfaced that a Binance employee allegedly exploited their position to benefit personally, with consistent content between an on-chain token issuance (13:29) and an official account tweet (13:30). Binance immediately suspended the involved employee and cooperated with the jurisdiction to advance legal proceedings. The official $100,000 whistleblower reward was distributed equally among the first five individuals who submitted valid reports through audit@binance.com.

This is not an isolated case. Throughout Binance's development history, multiple incidents of listing information leaks have exposed the fragility of internal information control.

The root of the problem lies in the fact that when a company transitions from "personal rule" to "rule of law," systems can be established quickly, but cultural transformation takes time. The behavioral patterns formed during the chaotic era—informal flow of information, the influence of personal relationships on business decisions, and prioritizing "getting things done" over "following processes"—will not disappear immediately due to an announcement or a penalty.

Talent Density—The Real Dilemma

In December 2025, when He Yi officially took on the role of co-CEO at the Dubai Blockchain Week, she candidly stated in a media interview that Binance's biggest challenge currently is still the issue of talent density.

"With the development of technology, not only in the cryptocurrency field but also in AI, traditional industries, whether in finance or tech companies, have very high talent density. In fact, we are competing with top talent in these fields."

He Yi emphasized, "I have always believed in one thing: if you don't believe in something yourself, you won't do it well. Such employees are hard to help the company build a top global team and enterprise. So, I think the biggest pain point is still our talent pool. This is also an important responsibility I feel I have—finding the best talent for Binance."

This is not the first time He Yi has publicly discussed talent issues. It raises the question: as the world's leading cryptocurrency exchange, why is there talent anxiety? Salary is clearly not the issue—given Binance's scale and profits, it has enough purchasing power to offer top industry salaries.

The real problem may lie in a more hidden place.

According to insiders, CZ personally approached a leading project in a certain sector, wanting to acquire it for a highly attractive amount, but the founding team declined. Previously, Binance had made several acquisitions, and being acquired by Binance was generally considered a good outcome, so why was it rejected?

The reasons behind this are worth pondering. The credibility crisis is one of the most difficult risks for Binance to ignore—it is transforming into a pervasive trust deficit.

Most projects that were previously acquired or deeply collaborated with Binance lack public information, and this information asymmetry itself forms a signal: for potential partners, the real uncertainty is not market prices, but who holds the interpretive power over the rules. Discussions about the complexity of terms, payment rhythms, and betting arrangements, although not verifiable one by one, have long sedimented into an industry consensus—when negotiating with the platform, you are always at a disadvantage.

This concern about "credibility" has triggered a chain reaction among top geeks and successful entrepreneurs. For this group, while monetization is important, whether the team can gain respect after integration and whether the system can guarantee the initial commitments are core indicators of a platform's attractiveness.

The employees He Yi mentioned who "believe in something" face not only the pressure of cross-border collaboration but also a highly pragmatic and somewhat cold organizational character. When this character translates into doubts about "contractual credibility" in mergers and executive recruitment, Binance's talent pool experiences a structural shortage: ordinary talent is eager to join, but top elites with independent value and a long-term focus on credibility are hesitant.

In February 2025, He Yi publicly acknowledged: Binance currently faces issues such as being too large to pivot, expending energy on regulatory pressures, organizational rigidity due to size, and talent iteration.

From the "attraction center" of wealth effects to now facing a "systemic bottleneck" of talent density, this segment of Binance's talent history is essentially a painful transition from early chaotic expansion to modern professional governance. If it cannot provide top talent with a sense of "certainty" for a good ending institutionally, relying solely on rewards and high salaries will likely be insufficient to fill the "talent pool" that He Yi is anxious about.

The "regional autonomy" model previously implemented by Binance was seen as an attempt at institutional decentralization, but key decisions still heavily relied on CZ's personal influence. This superficially decentralized structure once brought high efficiency but could not maintain continuity after the founder's exit. The introduction of the board and the current co-CEOs is essentially a institutional compensation for the vanished will of the founder.

But this compensation is incomplete.

Personal rule can rely on a few core confidants, but institutional operations require stable collaboration among thousands of professionals. Binance has entered a vacuum period of "power still concentrated, but individuals unable to execute"—when individual will cannot cover the whole, the core issue shifts from institutional design to talent density: does Binance have enough people to support this global giant under strong regulation?

Conclusion: Between Certainty and Uncertainty

From a chaotic era ruled by one person to today's co-CEOs, seven-member board, and 1,000-person compliance team, Binance's power structure has undergone tremendous changes. But the structure is just a container; the real challenge is: what will fill this container?

Listing corruption indicates gaps in the system, technical collapse reveals vulnerabilities in the system, internal leaks show cultural inertia, and talent anxiety highlights limitations in attractiveness. When personal will exits, the system has yet to operate coherently, and organizational culture is still transforming, Binance faces not just a specific problem but a whole set of interconnected systemic challenges.

He Yi stated at the Hong Kong Crypto Finance Forum in April 2025: "The essence of Binance is three things: first, to make good products; second, to serve users and employees well; third, to communicate effectively with regulators."

These three things sound simple but are difficult to execute, especially against the backdrop of 300 million users, global distribution, strong regulatory pressure, and the founder's exit.

Perhaps Binance's biggest challenge now is not regulation but how to maintain innovation within a compliance framework, how to repair credibility in the process of institutionalization, and how to find people who "believe in this thing" amid talent competition.

As Binance is no longer the brash dragon-slaying youth and has even begun to transform into the dragon of yesteryear, can the dragon-slaying spirit it embodies continue? Will the internal pursuit of stability and the shadow of centralization allow for the emergence of more business models and innovative capabilities? The era of reckless growth has passed, but the real challenges have only just begun. How far can it go?