From entering the market by selling houses to being forced out, reviewing CZ’s 6-year entrepreneurial history

From Initial Success to Unexpected Exit A Look into CZ's 6-Year Entrepreneurial Journey in the Housing Market

Original | Odaily Star Daily

Author | Hao Fangzhou, Qin Xiaofeng, Azuma

November 22nd is destined to be a big day in the personal history of CZ, Binance, and even the entire crypto industry.

Early this morning, Binance officially announced that it has reached a settlement with the US Department of Justice, Commodity Futures Trading Commission, Office of Foreign Assets Control, and the Financial Crime Enforcement Network on historical registration, compliance, and sanction issues. As part of the settlement agreement, Binance has agreed to plead guilty and pay over 4 billion US dollars in fines.

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At the same time, CZ released an open letter stating that he will step down as CEO of Binance, and Richard Teng, Binance’s Global Market Head, will take over. In the open letter, CZ revealed that it is unlikely for him to lead a startup like he did with Binance in the future. Instead, he wants to transition into an investor, investing in the fields of blockchain, Web3, DeFi, artificial intelligence, and biotechnology.

Looking back at CZ’s leadership of Binance over the past six years, he not only made Binance Exchange a leader in the cryptocurrency trading industry, but also strategically connected its public chain ecosystem, payment and stablecoins, upstream and downstream investments, education and charity initiatives, and transformed the once “one-legged” CEX into a comprehensive Web3 conglomerate. He has also spread Binance’s products, services, and brand influence to the world.

From the perspective of the Web3 industry, CZ as a top KOL frequently voices opinions, representing the determination and courage of Chinese innovation, going global, and collaborating with clients from different backgrounds. He has also repeatedly warned of risks, appeased market sentiment during crises and volatility, stabilized morale, provided guidance, and offered criticism and advice on regulation. In the high-pressure regulatory environment, he has stood up for the young crypto field and fought for a broader space for development.

Therefore, CZ’s guilty plea and Binance’s settlement are regarded by some industry insiders as a move to “burn oneself to illuminate the path to compliance and innovation,” and may even pave the way for the “accelerated promotion of ETFs.”

In the following article, Odaily Star Daily will take a look back at key milestones and outstanding achievements of Binance, summarize its success experiences, and based on the guiding principles of its first leader, predict the focus areas of the successor and the next stage tasks of the cryptocurrency trading platform.

Creating the “Largest Exchange in the Universe”

When it comes to top cryptocurrency exchanges, you may think of a long list of names, but there can only be one king – Binance.

This is a fact that even its competitors have to admit. In various rankings, whether it’s spot or futures trading, Binance’s market share is far ahead, often exceeding 50%, more than the sum of the top five.

Data shows that Binance currently has over 6,000 employees worldwide, supporting 18 different service languages. The number of users who have undergone KYC certification has exceeded 120 million, which means that there is approximately 1 Binance user for every 66 people in the world. Jokingly, people in the industry call Binance the “Number one exchange in the universe”.

From being a small and transparent startup in early 2017 to becoming the industry leader today, under the leadership of CZ, Binance has built a diverse business system in just 6 years, covering spot trading, futures, options, OTC, mining pools, cloud services, public chains, investments, charity, and more. Today, Binance is not just an exchange platform, but has become a comprehensive blockchain giant.

So what is the secret to Binance’s success? Many people say that it was the industry opportunity provided by China’s “Nine Four” (referring to the 2017 boom in the cryptocurrency market). While opportunity is important, what is even more crucial is how people within that industry seize the moment and make the right decisions. CZ’s establishment of an internationalization strategy successfully helped Binance capture a batch of traffic during its early stages.

When a large number of domestic exchanges crowded in the market in 2017, Binance, with its keen sense of policies, positioned itself as an international trading platform, expanding its target users globally and avoiding the intense competition in the domestic market. Two months later, strict regulations were imposed. While many domestic exchanges were forced to shut down, Binance’s global strategy enabled it to thrive and lay a solid user base for future development. In just 165 days, Binance made a powerful comeback and became the leading cryptocurrency spot exchange at that time.

After the hype subsided and the market turned bearish, Binance did not rest on its laurels, but continued to enrich its trading services. For example, in the second half of 2019, Binance focused on derivative contracts and gradually launched services such as C2C and lending, enhancing network effects. After establishing its leading position in the trading business, Binance also sought transformation, mainly focusing on investment, technology research and development (public chain), new businesses (such as mining pools), and charity, among other dimensions.

Unlike the traditional image of autocratic managers, CZ, who oversees the vast empire of cryptocurrencies, advocates a decentralized model and does his best to decentralize power. All Binance’s businesses are done step-by-step, slowly exploring and finding their way. “We have always had a relatively loose management model, with everyone having a lot of freedom. Starting a project at Binance is relatively simple, and everyone can do what they want. But if they can’t produce results within a certain period of time, we may stop that project.”

Perhaps it is in this mode that Binance’s innovative factor bursts forth, and the management efficiency has not been reduced due to distributed office spaces. Taking Binance Chain as an example, from announcing the development of its own public chain in December 2018 to launching the mainnet in just over a year, this year they also launched OpBNB, the second-layer network of BNB Chain, and BNBGreenfield, a distributed storage chain. Binance’s public chain is also one of the most well-developed among exchange-based public chains, rivaling Ethereum at one point.

Interestingly, Binance’s exploration in many fields is not as a “pioneer” but as a “follower”. Take the hottest trend of IEO for example, exchanges had attempted it as early as 2017 with little success. Instead, it was Binance in 2019 that ignited this trend and it has continued till now, becoming a standard for CEX.

“If you look at the development history of Binance, when it comes to trading products, Binance wasn’t the first to take the leap, but we are able to iterate on the foundation set by our predecessors.” Binance co-founder He Yi said that every move Binance makes is well-calculated, aiming to achieve maximum results with minimum trial and error costs.

The right time to do the right thing. Binance’s achievements today are the rewards for quickly launching new businesses, focusing on the right areas, and seizing the market.

Pride of the Chinese, advocating for crypto

If we view “leading your own company to become a unicorn in a vertical field” as the first step, CZ’s next steps have mostly been focused on driving industry-wide Web3 growth.

Looking at the crypto world, the roles that can “shape the industry with their own perspectives” include infrastructure (early mining, the public chains that boomed in the previous phase, emerging bottom-layer ecosystems), trading platforms, investment institutions, traditional tech and financial giants, and regulators.

The KOLs in the space include Wu Jihan, Vitalik Buterin, CZ, Arthur, the persistent writers of a16z and LianGuairadigm, Cathie Wood, Michael Saylor, Musk, Jack Dorsey, Buffett and Charlie Munger, Gary Gensler…

We can see that as the Web3 industry themes change, few KOLs are left actively voicing their opinions on social media, and even fewer belong to the Chinese except for CZ.

Looking back at the past few years, CZ’s classic remarks are still fresh in our minds.

For example, CZ has always advocated embracing regulations and remains optimistic about compliance. During the bear market last year, CZ cheered for the industry, stating that most countries and jurisdictions are establishing regulatory frameworks instead of completely banning Bitcoin or cryptocurrencies, which is creating a better environment for cryptocurrencies.

At the beginning of this year, CZ mentioned his four key focus areas for 2023, once again calling for the industry to prioritize education and compliance. It is worth mentioning that CZ’s fourth focus area is “ignoring FUD, fake news, and attacks,” which is why CZ often makes a gesture of dismissing unfounded rumors with four fingers.

Although being the captain of the world’s largest CEX, CZ holds a strong belief in the future of decentralization. When discussing the future development of DeFi, CZ has repeatedly mentioned that DeFi may surpass CeFi in the next bull market.

In addition, CZ admits that he is “not very good at trading” and basically only holds coins without trading; the BTC in his hands was sold for a house many years ago and he hasn’t touched it since. Even though he often speaks out on Twitter, he always focuses on industry or Binance-related business trends and never predicts coin prices. “I am more concerned about the usage rate of Bitcoin, how many people are entering this industry and how many people are using Bitcoin, this question may be more core.”

In terms of internal management, Binance employees, including CZ himself, are prohibited from trading futures, and the product testing team has dedicated limited accounts; all employees’ Binance accounts are registered and closely monitored. The starting point for all work is to avoid Binance becoming a counterparty to users and to maintain market trading order.

CZ is also happy to support Binance employees in starting their own businesses. When commenting on the departure of former high-ranking officials from Binance, CZ said: “Some employees are engaged in exciting new ventures outside of Binance, they are growing into more important roles, and I have even helped many of them with introductions and recommendations. We support everyone, we are a group, and this also creates more development opportunities within Binance.”

As one of the busiest people in the industry, CZ never forgets to blow the whistle and warn users of asset risks in emergencies. For example, actively informing during a crisis of information leakage from a competitor, without disclosing the specific name of the competitor, actively calling on users to update when vulnerabilities are exposed in iOS, and repeatedly assisting project parties in freezing hacker funds after hacking incidents.

It is these contributions to the industry that have prompted many insiders to write and thank CZ today. (For details, see 《CZ Farewell, Cryptocurrency KOL Send-off》)

CZ Steps Down, Richard Teng Takes the Helm

With CZ’s departure, Richard Teng, Binance’s Global Head of Markets, will take over as CEO.

This morning, Richard Teng also released an open letter following CZ:

• “I am honored and humbled to assume the role of the new CEO of Binance. Our operation of the world’s largest cryptocurrency exchange, trusted by 150 million users and thousands of employees, has always been a responsibility that I value and cherish. With the support of CZ and the other leadership team, I have accepted the role of CEO, and we will continue to meet and exceed the expectations of all stakeholders, while fulfilling our core mission of currency freedom. Today, Binance’s foundation is stronger than ever before.”

• “My focus will include assuring users that they can continue to have confidence in the company’s financial strength and security; collaborating with regulators to maintain high standards that promote innovation globally, while providing essential consumer protections; and working with partners to drive the growth and adoption of Web3.”

Richard Teng’s appointment was not so surprising. Bloomberg reported in June that if CZ resigned due to regulatory pressure, it was very likely that Richard Teng would become the next CEO of Binance.

That was also the first opportunity for most crypto users to learn about Richard Teng, and at that time, it had been less than two years since Richard Teng joined Binance.

• In August 2021, Richard Teng joined Binance as the CEO for the Singapore region;

• From December 2021 to October 2022, Richard Teng served as Binance’s new head for the Middle East and North Africa region;

• From November 2022 to April 2023, Richard Teng served as the executive for Binance’s Asia, Europe, Middle East, and Non-US regions;

• In June 2023, Richard Teng was appointed as the market head for all regions of Binance except the United States.

CZ once talked about how he met Richard Teng. The two met through an employee of the Singapore central bank. After communicating with Richard Teng for two weeks, CZ made the decision to recruit him. Compared to the self-made CZ, Richard Teng’s biggest characteristic is having sufficient regulatory work experience.

• Prior to joining Binance, Richard Teng worked at the Monetary Authority of Singapore (MAS) for 13 years;

• After leaving MAS, Richard Teng joined the Singapore Exchange (SGX) in 2007 and became the Chief Compliance Officer within 8 years;

• In 2015, Richard Teng joined the Abu Dhabi Global Market’s Financial Services Regulatory Authority (ADGM) as the CEO. During this period, ADGM was voted as the “Best International Financial Center in the Middle East and North Africa” for four consecutive years.

If in the past six years, CZ needed to lead the fledgling Binance to break through the market encirclement with more aggressive strategies, actively compete in exchanges, public chains, wallets, investments, and other fields to seize a leading position, then now that Binance has grown into an industry giant, CZ may have realized that the biggest challenge facing Binance is no longer how to compete with opponents lagging behind but to take on the responsibility of positive regulation and lead the crypto industry towards compliance.

This process is filled with significant uncertainty, it may be lengthy and full of friction. But what CZ may be certain about is that his years of frontline work experience have earned him countless reputations, but also brought numerous controversies. As Binance moves into a new development stage and needs to face challenges with a smoother stance, he may no longer be the most suitable candidate to lead Binance.

Perhaps this is the key reason why CZ chose Richard Teng as his successor.

Looking to the future, there is reason to believe that Richard Teng will continue to advance the development of Binance’s various business on the foundation laid by CZ. At the same time, he will also make full use of his experience and resource advantages in traditional finance and compliance, leading Binance to communicate with regulatory authorities around the world in a more stable manner.

As for CZ, he has made perhaps one of the most challenging decisions of his life – knowing when to relinquish control of the company he founded, as he mentioned in his comments on the Sam Altman incident a few days ago.

This afternoon, CZ wrote in an internal letter to all Binance employees: “Binance will be fine, I will have to endure some pain, but I will get through it.”

Making this decision must have been extremely difficult, but CZ chose to step down for the sake of Binance’s continued progress.

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