Quick Overview of Binance’s New CEO’s First Chinese AMA Future Layout and How US ‘Compliance Officers’ Operate

Insight into Binance's New Chinese CEO Review of Initial AMA, Future Strategy and US Compliance Operations

Source: Planet Daily

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

In this online event, Richard and He Yi shared extensively, including Binance’s perspective on the US settlement, progress in compliance, future investment plans, and views on the cryptocurrency market. This AMA covered many areas and provided a comprehensive discussion of various aspects of the crypto world.

Richard emphasized the increasing trend of countries regulating cryptocurrencies and the positive positioning of institutional investors in the industry, which will bring more confidence and funds to the cryptocurrency market.

• What potential airdrop opportunities can be obtained by pledging TIA as the ‘best profit strategy’ in the new bull market?
• Why can’t we block inscriptions technically?
• Harvard Blockchain Accelerator global recruitment outstanding entrepreneurs

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

As one of the world’s largest cryptocurrency exchanges, Binance will continue to focus on providing users with high-quality products and services to promote the development of the entire cryptocurrency ecosystem.

Three Major Promises from the New CEO

Richard: I have three major promises: always prioritize users, consistently develop top-notch products and services that users love, and always prioritize user experience and protection. The second is to cooperate closely with global regulatory agencies. The third is to collaborate with global partners to promote the growth and adoption of Web3.

“Just earned 2 million”

When talking about the growth of the Binance community, one industry insight made He Yi quite emotional. This segment also caught the attention of the audience and was reposted in multiple communities.

“Hello everyone, I’m He Yi. I joined Binance after the Chinese New Year in 2014, and it has been almost ten years now. What has impressed me the most in these ten years is the growth of the Binance community.

Last night, I saw a young kid on WeChat. Two or three years ago, when he was still in college, he told me on WeChat, ‘I just graduated and am very confused about what to do.’

I suggested to him to join Binance’s referral program.

Yesterday, he asked me if he could follow him on Twitter. He told me he is doing referrals. I checked his earnings, and he just earned 2 million RMB. But for a recent college graduate, that’s already very good.

I am also honored that our community has so many new forces and crypto OGs working together to build this industry. I believe that the future direction of this industry is not determined by the visions of a few individuals. The direction of the industry is determined by the practitioners in our industry together.

Why did the management choose Richard as the new CEO?

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

In 2017, I started getting involved in the cryptocurrency industry. At that time, I was CEO in Abu Dhabi, and I strongly believed that the cryptocurrency industry was the future trend and would have a significant impact on the entire financial sector. When I was working in Abu Dhabi, we were among the earliest regulators of cryptocurrencies. So, at that time, I had a deep understanding of cryptocurrencies, which, combined with my extensive work experience, gained everyone’s support.

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

He Yi: In our industry, we actually only focus on two things: product and service. I have always been dedicated to providing the best service to users.

But as the industry develops, we also need professionals who can communicate in the language of regulatory agencies. So, I believe that walking steadily and smoothly in terms of regulation is a challenge that top exchanges like us have to face.

Another point, personally, I have spent a lot of time researching how to make a company have lasting success and how to make the organization run more efficiently. I believe the most important thing is clear division of labor and clear goals. Just like Elon Musk mentioned in his new book about the concept of entropy, which is actually the uncertainty in an organization. How to reduce uncertainty? By not having people with unclear roles in the team. For Binance, the best division of labor is me being in charge of serving users, while Richard is better suited to be the CEO.

Binance’s high opening price?

He Yi: To be honest, there is still room for improvement in every aspect for us. Specifically, we have a dedicated team for product development and iteration, such as the issues with the Web3 wallet that people often mention. We may not have invested enough in certain areas before, but we will continuously 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’s complaints about Binance or issues with certain projects, such as the high secondary market prices of some projects, we are aware of these problems and actively seeking solutions. We hope everyone keeps an eye on us, and we will strive to live up to expectations.

Wallet support for inscriptions?

He Yi: Although Binance has developed smoothly over the years, we have always been tackling difficulties. 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 been established as well. So, although we started late, we hope to seize the opportunity.

He Yi: Web3 wallets should provide users with a user-friendly scenario in addition to exchanges. Our peers are bustling with enthusiasm, and so was the previous “plucking fur” activity. But I don’t think Binance needs to completely replicate this model. We need to look not only at the present but also at the future.

What we are really concerned about is whether this industry has legitimate projects that can establish great business models or truly bring about change to the world.

I think one of the benefits of “plucking fur” is anti-VC, namely fair minting. But after fair minting, there are so many “fur plucking” activities happening globally, and each one requires someone to take over. But not all “fur plucking” activities find takers. The current state is still somewhat unclear, and whether the next step will lead to the Bitcoin ecosystem remains unknown. 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 is still the largest in terms of international user base and daily active users. But whether it’s “fur plucking” or “minting,” Binance has not yet optimized the user experience and scenario. In the future, we will further iterate and make up for what’s missing in the CEX in the wallet field. I’m not sure if my understanding of wallets is the same as everyone else’s, but at least I know that our wallet is not good enough in terms of user experience and does not support effective “fur plucking” and “minting” operations. But I believe these issues will be resolved one by one in the future.

He Yi: Regarding which chains to prioritize, our general principle is to support chains that have a sufficient number of users as much as possible. Essentially, a trading platform should not favor any particular chain.

Does regulatory fines endanger Binance’s financial status?

Richard: Our business foundation is very solid, and our financial situation is very healthy. Our capital structure is debt-free, and our expenses are very moderate. Although our transaction fees are low, our revenue and profitability are still very strong. Paying regulatory fines is not a problem, and users can rest assured that their assets are always supported and protected in a one-to-one ratio. Users can withdraw their assets from our platform at any time.

What I want to emphasize is that after detailed investigations into our operations, U.S. regulatory authorities did not make any accusations or discover any abnormalities in terms of user funds. This is very important. After reaching a settlement with the United States, user confidence in us has actually continued to increase. There may have been some outflow of funds in the past few days, but now funds are flowing back to Binance vigorously.

He Yi: Whether all of Binance’s businesses are healthy and whether funds are safe can actually be calculated using simple arithmetic operations within 100. You can calculate spot trading volume, contract trading volume, and then calculate how much the transaction fees are. Apart from human costs and server costs, Binance has not had any major expenses. If the enforcement agency wants to impose a fine, they cannot impose an amount that we cannot afford, right?

Will the platform gamble against its users?

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

The platform going against traders may earn more money in the short term, but this kind of profit is not sustainable. Because no one can control this market, the market is always unpredictable. In fact, we have already learned from FTX’s lessons.

Binance has been in this industry for ten years and it is impossible for us to go against our users. When you have enough users, charging service fees is enough. There’s no need to take on additional risks, and that is our operating logic.

How do we interpret the settlement with the US?

Richard: Reaching a settlement with the US regulatory agency is a very favorable development for us. In the early stages, we always put users first, and there may have been some shortcomings in compliance. We take responsibility for these mistakes.

These large-scale fines do not only happen to us, and these errors do not only happen to us. If you look at the top ten global financial companies, you will find that many financial institutions have received enormous fines, up to 90 billion US dollars, and even up to 40 billion US dollars.

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

Compliance is a global trend, not just regulations that we need to comply with. As the largest exchange, we often become the focus of regulatory agencies, but now we have overcome difficulties and put an end to past problems.

“Welcome reports of US users”

He Yi: The fine imposed on Binance has allowed us to enjoy the treatment of a top US financial institution.

When it comes to compliance, most people feel worried. But in reality, we need to comprehensively analyze the settlement with the US.

After the settlement, we cannot accept US users. However, the fact is that we already removed US users from the Binance platform two years ago. If anyone finds that US users are still trading on our platform, please notify us immediately. We welcome reports.

I believe this is an inevitable direction for the entire industry, and it is not just happening to Binance. Other larger platforms that want to reach an agreement with regulatory agencies are also going through this process. In other words, it will be more difficult if only Binance chooses the compliance route while others choose non-compliance. Currently, it seems that the entire industry is facing difficulties together, but overall, the industry is constantly expanding, and the market is growing in a positive direction.

Last but not least, I believe that income is not the only pursuit. This may sound a bit unreal, but for me, for CZ, and even for Binance, income is never the sole pursuit. What we truly pursue is the ability to drive the blockchain revolution together with everyone, to change productivity and production relations, and to create a brand new world. Simply pursuing income, I think, is short-sighted. We insist on long-termism, which will make us stronger.

How does Binance’s “Compliance Officer” in the United States operate?

Richard: Let me clarify that the so-called “Compliance Officer” is not a US government employee, but a very independent regulator. He is similar to an accountant and primarily focuses on anti-money laundering compliance. This independent regulator can help explain to everyone our commitments in compliance and anti-money laundering.

He Yi: I want to correct one thing, which is that the government does not send compliance officers to work for Binance. In fact, it is stipulated in the settlement conditions that we need to hire an independent third-party lawyer or consulting firm. Their task is to supervise whether we fulfill the commitments made in the previous agreement. For example, whether US users have been eliminated, and whether anti-money laundering measures are appropriate. This does not mean that they take over the operation of Binance. These are some points that may be misunderstood in the dissemination of information.

What will Binance Labs’ next investment be?

He Yi: Recently, Binance Labs has made some adjustments to its strategy. We have decided to support blockchain startups on a large scale, which could be ten times the previous scale.

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

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

In any industry, something needs to be created, services need to be provided to users, and the world needs to be truly advancing, even if it’s just a little bit. In this process, income and profits may be gained, while supporting the development and success of users and token holders together. Only something that is a win-win can be sustainable. Running away after a quick profit will ultimately harm one’s own reputation. Therefore, in terms of investment framework and industry thinking, I may be a bit traditional, but we still want to give it a try.

How do we view the market situation?

He Yi: There may be a market peak in the next year or the year after, but this is just my personal opinion, and some people think this view is too oversimplified.

At the same time, we must realize that as the scale of the entire industry continues to expand, we 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 anymore. But I still believe that market cycles will continue to exist. I am more optimistic that the next peak will appear next year or the year after.

Richard: Although there may be some market fluctuations in the future, the overall direction is still positive. First, more and more countries are regulating cryptocurrencies, which will increase investor confidence. Second, institutional investors are actively entering the cryptocurrency field, bringing more funds and investments to the industry. Therefore, I am very optimistic about the overall trend of the cryptocurrency industry.

Currently, the adoption rate of cryptocurrencies worldwide is about 5%. If more countries regulate the crypto industry and the industry moves towards compliance, the adoption rate of cryptocurrencies can increase to 10% or 20%.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!