Compiled edited by TechFlow
Guest: Changpeng Zhao, Founder of Binance
Moderator: Anthony Pompliano
Podcast source: Anthony Pompliano
The King of Crypto: CZ’s Rapid Rise
Air Date: July 2, 2025
Summary of key points
CZ is the founder of Binance and one of the most successful entrepreneurs of our time. In this interview, we take a deep dive into his life trajectory - from buying his first Bitcoin in 2013, to how he copes with the ups and downs of the crypto market, and his outlook for the future. The interview includes his childhood experiences, career, the story of founding Binance, and his challenges in the crypto industry.
Summary of highlights
I missed the Internet wave, but when Bitcoin appeared in 2013, I was already 35 years old. I realized that I couldnt miss this opportunity again, so I quit my job, sold my house, and devoted myself to the crypto field.
Traditional financial markets will also enter the cryptocurrency field on a larger scale.
Bitcoin, blockchain, and artificial intelligence are three core technologies I have encountered in my adult life.
What really limits me is not money, but other factors, such as talent, team, health and time, which are limited resources. So I am more focused on these aspects now.
I have always felt that I am not much different from others, so I have never had a sense of superiority or inferiority. I hope I am not too conceited, but also not too pessimistic.
I think the U.S. has the potential to become a global hub for cryptocurrency, and we hope to contribute to that. We are in a simulation, and when we face challenges, we just have to do our best and keep moving forward.
Starting an exchange is not a new idea. Almost everyone I meet in the crypto industry has thought about starting an exchange. I always believe that the idea itself is not the most important thing, but execution is the key.
To build a successful company, you must have strong convictions and a clear worldview, and you need to recognize the potential of certain trends earlier than others.
Binance’s profit in its first year was about $1 billion, possibly the first startup to make a billion dollars in profit.
We hold our profits in cryptocurrency and do not convert them into fiat currency because we believe that cryptocurrency will have higher long-term value.
When I look at my personal wallet, I have never cashed out these assets, which are more like a virtual number than actual wealth. This mentality helps me focus on long-term development instead of being bothered by short-term fluctuations.
Although I can choose to live in a country without an extradition treaty and live a relatively stable life, this is not the lifestyle I want. I dont want to live a life of escape and hiding.
I have a certain amount of trust in the U.S. judicial system. Despite the political pressure on the crypto industry, I believe the U.S. judicial system is still relatively fair.
The role of Bitcoin and cryptocurrencies in the world
Anthony:
CZ, as one of the most influential entrepreneurs in the world, you have not only achieved success in your personal life, but also led Binance to become a leader in the crypto industry. However, I think many people outside the crypto industry do not understand how a large company like Binance has grown and may not fully understand your achievements.
People who have made it to the top of their chosen field often have very interesting worldviews. Considering that you’re building a company in the crypto industry, talk about Bitcoin and cryptocurrency. What role do you see it playing in the world? How will it continue to grow in importance in the future?
CZ:
Absolutely. I think you hit on a key point that Ive learned over the years, which is that to build a successful company you have to have strong convictions and a clear worldview, and you need to recognize the potential of certain trends before others do.
I think we were lucky to be exposed to Bitcoin early. This is our third podcast. In 2013 and 2014, when I first came into contact with Bitcoin, I was like, This technology is amazing. It will be a bigger transformation than the Internet. I missed the Internet wave, but when Bitcoin came out in 2013, I was 35 years old. I realized that I couldnt miss this opportunity again, so I quit my job, sold my house, and devoted myself to the crypto field.
I think this strong belief is very important. Blockchain technology is not only applicable to the field of currency, but also can be used in any scenario that needs verification in the future. Although traditional databases can store data, they cannot be easily verified, and blockchain technology provides a more reliable way to verify. The application potential of this technology in the financial field is huge, and we are still in the early stages of its application in the financial world. For me, this is a major technological opportunity that cannot be missed. The next similar technological revolution may appear in 10 to 15 years, and artificial intelligence is also an important direction we are seeing now. I think Bitcoin, blockchain and artificial intelligence are the three core technologies I have encountered in my adult life. This worldview is essential to building platforms and driving industry development.
Anthony:
You mentioned worldview, which is obviously closely related to personal experience. You have worked in many types of companies and have been exposed to many different life situations, and these experiences seem to have helped you develop empathy and intuition. Intuition is like your human algorithm, the more you are exposed to it, the better you can recognize potential. When you first came into contact with Bitcoin, what made you think it would be so huge? Was it the technology itself, the price trend, or something in the market? What made you sure it would change the world?
CZ:
I was lucky enough to live in different countries. This gave me a deeper understanding of globalization. I was born in China and later moved to Canada to complete my studies there. After that, I worked in Tokyo, New York, and Shanghai. This global experience made me understand that currency should not be limited to national borders. When moving between different countries, I had to exchange currency, and I lost a lot of money due to exchange rates when traveling from Japan to New York. This made me realize the limitations of the monetary system.
In addition, I have a technical background. As early as 1998, I used PGP encryption technology, which enabled me to understand Bitcoins encryption algorithm. I also worked on Wall Street, such as Bloomberg and Tokyo Stock Exchange System, and gained financial technology experience. This background enabled me to understand the potential of Bitcoin earlier. At the same time, I observed that the Bitcoin community in 2013 was full of innovation and cooperation, which made me more determined.
I think the combination of these experiences made me realize the value of Bitcoin earlier than others and also allowed me to stay firmly in this industry. I think all of these contribute to peoples perspective or understanding of the world. It is very important to have a global perspective rather than a national perspective.
CZ’s Outlook on the Future and Crypto
Anthony:
You are one of the most successful entrepreneurs of our generation. People are curious about your wealth. Can you talk about it publicly? Everyone wants to know how successful you are, and wealth seems to be a way to measure success.
CZ:
I know I have enough money to live comfortably and have enough funds to achieve the things I want to do. For me, money is a tool that allows me to do the things that I think are important. For example, if I want to start a business that can help others and have a positive impact, I have enough resources to achieve it. But the real limit is not money, but other factors, such as talent, team, health and time, which are limited resources. So I am more focused on these aspects now, rather than money itself.
Anthony:
Bitcoin was obviously your first love entering the industry, and you have successfully built a leading global exchange. Where do you think the crypto industry is headed now? Especially as more countries begin to support cryptocurrencies and hundreds of millions of people have begun to sign up to use these assets.
CZ:
I am very bullish on this market. Some of the most powerful governments in the world are promoting the development of cryptocurrencies. For example, we see public companies with Bitcoin reserves, which is a great development. I think we will see more institutional adoption in the future, such as ETFs, public reserves, Bitcoin reserves, etc. In addition, there are companies launching BNB reserves and Ethereum reserves, which are all positive trends.
I think the traditional financial market will also enter the cryptocurrency field on a larger scale. At the same time, in terms of innovation, we will also see more integration between artificial intelligence and blockchain. This intersection is expanding rapidly. For example, blockchain technology has been adopted by many governments and applied to decentralized identity, land registration, medical benefit distribution, taxation and other fields. This shows that blockchain is moving from a single financial tool to a multi-dimensional solution, and these developments are very exciting.
If you asked me nine months ago, I would have never expected that we would be in the environment that we are in now.
This also reflects the importance of changes in government structure. Elections can quickly bring new ideas and innovative policies. I think the United States has the potential to become the global center of cryptocurrency, and we hope to contribute to it. Although there are some limitations at present, we look forward to making more contributions in the future.
Anthony:
Its kind of crazy, right? Youre the largest crypto exchange in the world and youre not based in the United States.
CZ:
We hope to enter the US market. Currently, cryptocurrency exchanges in the US charge about 10 to 20 times more than in other parts of the world. This is a bit abnormal because other products are usually cheaper and shipped faster in the US. For example, I use Amazon in the US, and the products are cheaper and shipped faster. But in the field of cryptocurrency, American consumers pay more and have fewer choices. We hope to change this situation, but we are currently restricted by some regulations, and we need to solve it step by step.
I think we are like in a simulation environment, and when faced with challenges, we just need to do our best and keep moving forward. I also want to thank you for your support over the years. Although we havent had many opportunities to work together, I have always respected your contribution to the industry and you are a rational voice in the US crypto industry. I am very grateful for everything you have done and hope to have more opportunities for cooperation in the future.
CZs Childhood
Anthony:
Although weve known each other for a while, Ive noticed that most people only focus on your career achievements and know very little about your childhood. As I talked to people and learned more, I realized that your growing up environment in China was actually quite difficult. Can you share a little bit about what your childhood life was like?
CZ:
I was born in a remote rural area in China and later moved to an even smaller village. Before I could remember, my family had no running water or electricity. When I was in elementary school, I used to study under an oil lamp with a glass cover. It was a few years later that our family installed a water pump to pump water. A few years later, we had electricity. Later, we moved to a small city in China and then moved to Canada. All this happened before I was 12 years old, so my life has undergone a huge change.
Even after arriving in Vancouver, my parents faced many challenges. In China, they were teachers, but in Vancouver, my father chose to continue his studies and became a professor. My mother, due to language barriers, could only work in a sewing factory, sewing clothes. She left home at 7 am every day and came home at 7 pm, and her salary was almost the minimum wage. Although we were not starving, we were indeed living at the bottom of society. However, we never got into debt because Chinese parents are always used to saving. I saw my parents work hard to create better opportunities for me, and this experience deeply influenced me. I developed a habit of frugality and did not spend lavishly, but I also learned to work hard. I think the combination of these two helped me grow up a lot.
I feel very lucky to have come from a village without running water to the life I have today. This experience has made me appreciate life even more. I remember when I was a child, my mother had to walk 300 meters to the village well and carry two buckets of water on a bamboo pole back home. I am grateful for the fact that I have come from that life to where I am today.
Anthony:
Its interesting that your career is so closely tied to innovation and technology, and yet you describe a childhood that seemed almost technology-free, right? No running water, no electricity. Was there a sense of lacking that you were growing up? Or was it that everyone around you was pretty much the same, so you just assumed that was how everyone lived?
CZ:
When I was a kid, I thought everyones life was the same as ours. Even now, I still have this mentality. I think comparisons between people are relative. In the village, everyones living standards were similar. In fact, my parents were teachers, and they were slightly above average in the village. But when we moved to a bigger city, I realized that living conditions in the city were much better. The city we moved to was Hefei, which has one of the top universities in China. On the university campus, I saw a paved cement road for the first time, which was much better than a dirt road. These experiences made me realize that the world is wider than I thought.
This experience has also cultivated my mindset to accept new things. Early adopters of cryptocurrency are usually open-minded, and I think my upbringing has helped with this. I have always felt that I am not much different from others, so I have never had a sense of superiority or inferiority. I hope I am not too conceited, but I am not too pessimistic either. Overall, I have always been an optimist.
Relationship with parents
Anthony:
I was watching the NBA draft recently and one of the players was talking about how he once lived without electricity and his family relied on generators for seven years. You could feel his emotion in that moment as he said, I came from seven years of living on generators and my mom sacrificed so much for me to now be able to play in the NBA.
Although I dont know how good you are at basketball, in terms of technology, you have reached a top level similar to that of the NBA. Can you talk about your relationship with your parents? Have you discussed with them the huge difference between your current life and the environment you grew up in? Have they ever expressed their pride in you?
CZ:
I was lucky to have a pretty good relationship with my parents. I didnt spend much time with my father because he was away working most of the time to provide us with a better life. I spent more time with my mother. She didnt expect much from me, and she was very frugal. Now shes 83 or 84 years old, and she still complains about how expensive groceries are. I always say to her, Mom, you can buy whatever you want now. But she always keeps her frugal habits.
My father was also a very frugal person. Once I gave him some money, and after six months or a year, I asked him, Dad, do you need more money? I can give you more. But he refused and said, No, I havent spent the money you gave me last time. So I only gave him money once. Their lifestyle has hardly changed, and they dont want to change their lives.
My father passed away two years ago. Although I was not particularly close to him, his lifestyle had a great influence on me. He was very frugal and lived a simple life, never pursuing luxury, and my mother was the same. So overall, my relationship with my parents is still very normal, not particularly close, but not alienated either.
Immigrating to Canada
Anthony:
You were 12 when you moved to Canada. What do you remember about that experience? Canada is sometimes jokingly called the little brother from an American perspective, and while Canadians may not like that term, it is indeed a very Westernized country, and is about as close to the United States as you can get. It must have been a shock to go from a village in China to a slightly larger city, and then to relatively developed Canada?
CZ:
It was a very special experience indeed. For example, when we first arrived in Canada, a friend of my father drove to the airport to pick us up. This was a big deal for me because I had never taken a private car before. Private cars were very rare in China, and I could only take the bus. A few days later, my father bought a second-hand car for our family for 400 Canadian dollars. I was very excited at the time, thinking Wow, we actually have our own car! Life in Canada is really good, and the quality of life here is generally high. The environment is safe, and there are wide lawns to play with friends. The study pressure in school is not too high, it is relatively relaxed, and I still have time to learn English. Overall, the system here is very good. I am very grateful for the time I spent in Canada as a teenager and university, and I have developed many good habits.
In high school, I loved volleyball and practiced about 15 hours a week. I was the captain of the school volleyball team for four of the six years. I was not the captain from eighth grade to the first semester of ninth grade, but I became the captain from the second semester of ninth grade. Not only did I love sports, I also did well in academics. I had a good relationship with all the teachers in school. Our school was very small, with only 200 students at the beginning and 400 by the time I graduated. Because the school was small, everyone knew each other well. I think my teenage years were one of the best times in my life and helped me grow a lot. So I will always have a deep gratitude to Canada, which really made me grow a lot.
Anthony:
What youre saying reminds me of my wife. Shes from Bulgaria, and when she moved to the U.S., she found the math level here much easier than her old school. In Bulgaria, she was solving equations, but in the U.S., other kids were still doing addition and subtraction. She went from being the worst math student in the class to being the best math student. I guess the Chinese education system is also more rigorous. So what was the transition like for you, from the Chinese education system to the Canadian education system?
CZ:
Yes, my mother was a high school teacher and didnt want to take care of me and my sister at home, so she sent us to school two years early. In China, I finished eighth grade and moved to Canada when I was 12 years old. But when I arrived in Canada, they decided to let me go to elementary school first based on my age. I went to elementary school for one year before entering eighth grade middle school. Although the school year was delayed, my math courses were studied at the tenth grade level. I also participated in many Canadian national math competitions, such as Fermat and Euclid. These competitions are advanced math competitions for middle school students, and I was able to enter the top 100 most years, and even made it to the top 25 in my last year, and won some small medals. Math has always been my strong point, and it naturally led me to programming and technology. This part was relatively easy for me.
English was a challenge for me because it was my second language. I joined an ESL (English as a Second Language) class in high school. Usually students in these classes would have a hard time getting an A in a regular English class, but I was able to get an A most of the time. This was thanks to my English teacher, who really liked my writing style. He thought my writing was very interesting, and despite my limited vocabulary, I was always able to add a sense of humor to my writing, which the teacher really appreciated. Having a good relationship with him helped me build a lot of confidence in my writing. Although my grammar was not good enough and I often made mistakes, my sense of humor really helped me a lot. So in terms of academics, I excelled in math, and English was gradually improved through hard work.
Career and life before Bitcoin
Anthony:
What was your life like between graduating from high school and discovering Bitcoin? You are about 35 years old, and I don’t know much about this period. Where did you go? What kind of job did you do? I heard that you worked in some financial companies and returned to Asia. Can you share your experience?
CZ:
During my fourth year at McGill University, I looked for internships every summer. In my first summer, I found an internship in software development. In my second summer, I continued to intern at the same company. In my third summer, I went to Tokyo to intern at a company that provided trading systems for the Tokyo Stock Exchange. I was responsible for some junior development work. In my fourth year, I continued to work at this company and participated in an important project. However, due to the delay of the project, the manager wanted me to extend the semester to complete the work because I had become an indispensable part of the project. In order not to affect the progress of the team, I agreed.
However, the project was not completed on time, which was not my fault. The project was delayed many times, and I did not return to McGill University to complete my degree. Later, I found that not having a degree would make it difficult to apply for a work visa, so I transferred credits through online distance education, took some courses, and finally got a bachelors degree. After that, I continued to work in Tokyo for a few years until the Internet bubble burst in 2000. At that time, technology stocks fell sharply, and my company was acquired by a NASDAQ-listed company, but the stock performed poorly after the acquisition, and many employees left. I started looking for a new job, but recruitment opportunities were very limited. It wasnt until 2001 that Bloomberg recruited and I got a job offer through a telephone interview.
Just when I was about to go to New York to work, the 911 incident happened. I called to confirm whether the job was still available, and the other party told me that the position had not changed, and asked if I was willing to continue to join. I agreed without hesitation. So, in November 2001, I went to New York, just two months after the 911 incident. Although the streets seemed unusually quiet, the work environment was very stable, and I worked there for four years.
During my time at Bloomberg, I grew a lot. After joining as a senior developer, I was promoted three times in two years and started managing a team of 60 people, which later expanded to 80 people, with team members distributed in New York, Princeton, London, and Tokyo. We developed a futures trading system, which was the second-generation trading system that I participated in full-time for the first time. But in the last two years, I did not get promoted again. I found myself as the youngest manager in the team and the only Asian face. Promotion opportunities were very limited and it might take a long time to wait.
So, I started looking at entrepreneurial opportunities. There was a group of people doing startups in Shanghai at the time, and I thought it might be a good choice. Several senior founders from my previous work in Japan were doing new projects in Shanghai, so I decided to join them and became the youngest partner in the team. The six of us started a company called Fusion Systems in 2005. It is a company focused on financial technology solutions, and we have expanded our business to Tokyo, Hong Kong, Shanghai, and Los Angeles. At first, the company was small, with about 200 people. Although we experienced some difficulties, we eventually became profitable and the partners lives became better and better. We persisted in this way for eight years, from 2005 to 2013.
In 2013, I first came into contact with Bitcoin. I thought it was a very novel technology, so I tried to have Fusion Systems develop a Bitcoin payment service similar to BitPay. At that time, I raised $4 million in funding, but the other partners decided not to participate in this project because they were older and had limited understanding of Bitcoins potential. So I chose to leave and officially entered the Bitcoin industry. This was the turning point of my career.
Anthony:
Looking back, people can always find clues in their careers, how the things they did connected and ultimately led to success. But thats usually only clear in hindsight, right? When you join Bloomberg or Fusion, you probably cant predict what the future will hold.
First contact with Bitcoin in 2013
Anthony:
What was the first thing you did when you first came into contact with Bitcoin?
CZ:
I first came into contact with Bitcoin in July 2013, when it was priced at around $70. It took me about six months to fully understand Bitcoin and build enough confidence. By December 2013, when I fully understood the potential of Bitcoin, its price had risen to $1,000, which was the historical high of the year. I felt that I was too late to enter the market and had to act quickly. So in January 2014, I sold my apartment and used the funds to buy Bitcoin. I used it to buy Bitcoin every time I received a payment, such as in January 2014, I bought some at $800 and $600. After that, the price of Bitcoin began to fall. By February or March, when I received the last payment, I bought Bitcoin at a price of about $400. In the end, my average purchase price of Bitcoin was about $600.
However, from 2014 to early 2015, the price of Bitcoin hovered between $200 and $150 for 18 months. It can be said that my investment lost two-thirds of its value in a short period of time. Fortunately, my family was very supportive of me, although my mother always nagged: You silly child, why do you do this? Why dont you continue to work at Bloomberg? You were earning well at that time. But she just complained and did not stop my decision.
My thinking at the time was that either I was really wrong or others had not yet fully realized the potential of Bitcoin. I thought I might have just entered the market early, so I decided to stick with it. In 2016, Zhou Xiaochuan, the governor of the Peoples Bank of China, mentioned blockchain technology for the first time in a public speech. This was the first public mention of blockchain by Chinese officials, which attracted widespread attention. After that, Chinas cryptocurrency industry quickly turned to blockchain technology, and market prices began to recover. This period of time allowed me to experience the first winter cycle of the cryptocurrency market, that is, a long period of market downturn. After the first cycle, the second cycle was much easier to deal with because the markets foundation was more solid.
The idea and process of creating Binance
Anthony:
So, when did you come up with the idea of founding Binance? Was this a process you did alone, or did you form a team from the beginning?
CZ:
Starting an exchange is not a new idea. Almost everyone I met in the crypto industry had thought about starting an exchange. We discussed the idea back in 2013, but I didn’t feel I had enough experience at the time, so I joined an existing exchange. However, the situation there was not ideal, and I left after less than a year. After that, I tried to start a Bitcoin exchange in Japan because Mt. Gox, the world’s largest Bitcoin exchange at the time, collapsed in 2014 due to a security breach. I thought there was a demand for a new exchange in the Japanese market, so I started trying this direction in 2015.
At that time, I approached some venture capital firms to try to raise funds. But they advised me not to start an exchange directly, but to become a technology provider for other exchanges, because they had already invested in some exchanges in Japan, and I was good at building systems. So I found a few partners and started to focus on developing exchange systems. We changed from originally planning to start an exchange ourselves to focusing on providing technical support for other exchanges. The company has achieved good results, and our customers include more than 30 exchanges, many of which are small crypto exchanges. At the same time, an emerging phenomenon called over-the-counter trading emerged in the Chinese market, and these customers needed system support such as order book matching. We charge customers a monthly fee through the B2B model, and our business has developed very steadily.
However, in early 2017, the Chinese government shut down most of our customers, as that type of exchange was no longer allowed to operate. At this point, our team had grown to about 25 people, mostly technical, with a small sales staff, so we decided to change direction and return to our original intention of starting our own exchange.
I have always believed that creativity itself is not the most important thing, but execution is the key. By 2017, we already had a mature system and an efficient team. Although most of the team members are relatively young and inexperienced, they are very good. At that time, most exchanges still only supported Bitcoin transactions, and even large platforms like Coinbase did not support Ethereum. ERC 20 tokens on Ethereum were not widely accepted by mainstream exchanges, and 2017 was the beginning of the ICO boom, and many new projects were issuing ERC 20 tokens. We seized this market gap and quickly launched services that support Ethereum and all ERC 20 tokens, getting ahead of our competitors.
In addition, we made significant improvements in customer service. At that time, if a user submitted a support request, they might have to wait for more than two months to get a response, which was very painful for users, especially when they could not withdraw Bitcoin. We decided to provide a service that responded within 24 hours, and eventually reduced the response time to less than one hour. Through high-quality products and excellent services, we successfully attracted a large number of active users and stood out in the industry. These efforts and decisions helped us achieve success in the early stages.
Rapid growth phase and becoming the worlds number one exchange
Anthony:
During Binances rapid growth, you launched a product that was much needed in the market and solved a pain point. I have found that many business success stories can be traced back to them meeting market needs. So, what was your experience like during Binances rapid rise in 2017?
It was my first time going through a cycle in the crypto industry, and I realized that the market was going to go crazy. It wasnt just a Bitcoin thing, almost all cryptocurrencies were going up. Then the market experienced a big crash, and I guess price fluctuations often go with the ups and downs of emotions. So how did you deal with this situation in the early stages of Binance?
CZ:
I would say the first eight months were very surreal and unexpected. We officially launched on July 14, 2017, and just six weeks later, the Chinese government announced that cryptocurrency exchanges would no longer be allowed to operate. We were faced with a choice: close the company or move somewhere else? This is where my international experience came into play. I didn’t find relocation complicated because I had lived in many countries. So we decided to move 30 members of our team from China to Tokyo and no longer be based in China. This may be unimaginable for many businesses, but it was a reality for us.
At the time, we didn’t have any fiat currency trading channels because banks refused to work with cryptocurrency exchanges, whether in China or other countries. Therefore, we could only focus on blockchain business and become a crypto-to-crypto exchange. Users make Bitcoin deposits, Ethereum transactions and withdrawals through blockchain. Although this model limits our user base in each country, we found that there is a small group of users in each country who are willing to use this method. So, we gradually developed into a global platform.
After the migration was completed, the business began to grow rapidly. Two months after the launch, we entered the top ten of the global exchange rankings; four months later, we were in the top five and stayed in the top four for about a month. By December 2017, five months after the launch, I received a message in Tokyo: Congratulations, Binance is now the worlds number one cryptocurrency exchange. At the same time, the price of Bitcoin soared from $3,000 at the beginning of the year to $17,000 to $19,000 in December. This was almost the same time as our trading volume peaked. However, this also put a huge pressure on the system.
I remember that our CTO had almost no rest time. The product manager monitored the community dynamics late at night and contacted the CTO once he found a problem; the operations manager woke up in the early morning to check the community situation and contacted the CTO immediately if he found a problem. During those months, the CTO dealt with urgent issues almost every day, and the work intensity was very high.
By January 2018, our registrations peaked at 200,000 new users per hour and 300,000 new users per day. The system was under tremendous pressure and could not even process registration requests in time. We had to suspend response services within an hour or 24 hours. Fortunately, as the price of Bitcoin fell, the market became a little calmer, which gave us a chance to breathe. We used this time to re-optimize the system and prepare for the next stage of development.
Anthony:
How much money did you make in Binances first year? Its an incredible story, you launched a product and it quickly became a hit in the market. So how big was it?
CZ:
I think the first year profit was about a billion dollars. I think we were probably the first startup to ever make a billion dollars in profit.
Anthony:
Was that achieved within the first six months? You launched in July, after all.
CZ:
Yes, most of the profits were realized between the first three to eight months, especially between three to seven months, which was when our transaction volume was the highest. We found that while some companies reached a billion dollar valuation faster, we were probably the fastest startup to do so from a profitability perspective.
Anthony:
Hitting a billion dollars in profits in the first year was incredible. What was going through your mind at that moment? Did you feel extremely successful, or were you worried that this might fade away? What were your emotions like? Did you stop to celebrate this milestone?
CZ:
I was in a relatively balanced state of mind at the time, which was closely related to the price volatility of Bitcoin. We held the profits in the form of cryptocurrencies and did not convert them into fiat currency because we believed that the long-term value of cryptocurrencies would be higher. This volatility is something we have to face. I think as long as we ensure that we have enough capital buffer, we can cope with any potential downside risks. So I didnt get too excited and didnt distribute all the profits to avoid being caught in the market when it fell.
At the beginning of 2018, the price of Bitcoin dropped from $20,000 to $3,000. This made me realize that the profit figure depends a lot on the number of assets on the platform. We need to rearrange wallets and transfer billions of dollars of assets. It was really nervous when I did such operations for the first time, but after doing it a few times, I got used to it and gradually became numb to these numbers. When I checked my personal wallet, I never cashed out these assets, so for me, it was more like a virtual number than actual wealth. This mentality helped me focus on long-term development instead of being bothered by short-term fluctuations.
The Binance Hack and the “Funds Are Safe” Incident in 2019
Anthony:
I remember walking down the street in New York City one day and I heard that Binance had been hacked. Was that in 2018 or 2019? I reached out to a Binance executive to ask if they were okay and if they needed help. It was a very chaotic situation, with everyone trying to figure out what was going on, if their funds were safe, and so on. Can you tell us a little bit about that? Because I think when people hear that Binance went from zero to a billion dollars in profit in its first year, it probably makes them think that everything went really well, but you guys also went through a lot of challenges and difficulties, right?
CZ:
Thats right. This happened in May 2019, when we suffered a major hack. Hackers stole 7,000 bitcoins from our Bitcoin hot wallet, which was worth about $40 million at the time. In response to this incident, we suspended withdrawals for a week, but trading continued as normal to avoid price fluctuations that differed from other exchanges. A few hours after the incident, I participated in a pre-arranged AMA. Although it was originally scheduled to take place the next day, I decided to go online as scheduled and communicate directly with users. Many users analyzed my attitude and performance and believed that we had enough funds to cope with this crisis.
To give you more information, $40 million was equivalent to our monthly revenue in 2019. Although this incident will not bankrupt us, it still makes the whole team very nervous. We are worried about whether the hackers will further attack other assets. Security issues have always been one of the biggest risks in the crypto industry. After the incident, we developed a detailed response plan and updated the progress every two hours through Twitter to explain to users the measures we are taking and provide proof of assets. Looking back, this crisis has become a blessing in disguise.
A week later, we restored the withdrawal function and found that the amount of users deposits actually exceeded the amount of withdrawals. Many users expressed their recognition and trust in the way we handled the incident. I think this incident has taught us an important lesson: transparent and timely communication, proactive responsibility and quick resolution of problems can enhance user trust. In fact, we have also seen other companies gain more credibility after adopting similar strategies in similar incidents. This is indeed a complex business full of challenges.
Anthony:
We can’t talk about this hack without mentioning the phrase “funds are safe.” Can you explain the origin of this meme?
CZ:
When the incident happened, I said funds are safe. Later, a YouTuber made a funny video portraying me as a Japanese saying funds are safe in an exaggerated tone. This video attracted widespread attention, and every time we suspended withdrawals or performed system updates, I would respond to users with the phrase funds are safe. Gradually, I accepted this meme, the community began to support it, and eventually it became a popular online cultural phenomenon.
Anthony:
Every time I see this meme, I cant help but laugh because its tied to that moment. Well, 2019 is over, and the hack is a thing of the past. 2020 is obviously a special year, especially after the outbreak. Can you talk to us about this year? Your business was gradually stabilizing at that time, and now its starting to scale, right? I think now everyone in the world, at least those who pay attention to crypto finance, realizes that crypto finance is successful. So what happened in 2020 and 2021 that was special?
CZ:
2020 can be said to be a warm-up year, while 2021 is a breakout year. In 2019, we launched Binance Launchpad, a platform that helps new projects raise funds through token sales. It was at the bottom of the crypto winter, and the price of Bitcoin was around $3,000. We launched many new features through Launchpad to provide users with more choices. The market gradually warmed up in 2020 and became a transitional year, while 2021 ushered in a full-scale outbreak of the crypto industry.
At the beginning of 2021, Binance had about 20 million users, which grew to 120 million by the end of the year, a 5-6x increase. In the same year, the price of Bitcoin rose to $60,000. Although this year was very stressful, we were better prepared. The team was larger and more experienced. Although we still faced challenges with customer support and system issues, we had become more mature overall. This year was not only a year of strong growth in the number of users, but also a year in which Binances reputation was gradually established. We were no longer just a new platform, but became a leader in the industry. This is my main memory of that time.
Bitcoin explosion and regulatory environment in 2021
Anthony:
At some point, Binance quickly grew from a niche crypto product to the worlds leading cryptocurrency exchange. Eventually, you made it to the world stage and attracted global attention. As we entered 2021, I noticed that the crypto industry was beginning to receive more scrutiny, but there didnt seem to be much real action at the time. Obviously, by 2022 and 2023, the pressure of regulation was clearly increasing. This trend has brought challenges to many companies, including Binance.
Can you talk about the explosion of the crypto industry in 2021 and the regulatory frictions you face globally, especially the pressure from the United States?
CZ:
I remember we met in January 2019, during the bear market in the crypto industry, with the price of Bitcoin around $3,100. Even at the bottom of the market, the conference we organized still attracted a large number of participants. In 2021, the market ushered in explosive growth, and the popularity of the crypto industry reached new heights.
However, a few months later, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance, accusing us of fraud, alleging that we had misappropriated customer funds, and issued an emergency freezing order seeking to restrict the movement of all assets of the company. To help the company through the difficult times, I provided a $250 million loan, but I was not able to recover the funds until the case was completely dismissed.
Anthony:
Clearly, there has been an increased focus on you from regulators. Can you tell me more about whats going on? I think a lot of people have only seen the headlines, but I dont really know the details either. What are you being accused of? And how has it affected you?
CZ:
This happened in November 2022. In December 2022, Binance experienced a massive withdrawal of users due to market concerns about the security of funds on centralized exchanges. In one week, we processed about $14 billion in withdrawals, with the highest day being Wednesday, with withdrawals reaching $7 billion. That day I was having dinner with some industry insiders in Dubai, and they were impressed by the rich resources of Binance, but I was thinking in my heart that I was not directly involved in the withdrawal business.
Despite the pressure, our system operated stably and successfully processed all withdrawal requests without any problems. However, a month later in January 2023, the SEC filed a lawsuit against us, trying to link Binance to the FTX crash and accusing us of misappropriating user funds, etc. However, during the court hearing, the judge made it clear that the SEC did not have any substantial evidence. These contents are all recorded and can be publicly consulted.
During the SEC lawsuit, Binances trading volume accounted for about 35% of Coinbases global trading volume. In the US market, our market share even reached 50% of Coinbase. But after the lawsuit, Binance US lost its banking channels and its trading volume quickly dropped to about 1% of Coinbase. This had a huge impact on our business.
Then the U.S. Department of Justice (DOJ) got involved. I entered into a plea agreement with the DOJ for violating one provision of the Bank Secrecy Act. I cant go into more details, but the point is that I became the first person in U.S. history to be sentenced to prison for a single violation of the Bank Secrecy Act, without fraud or other crimes. It was a complete surprise to me, but thats what happened. I volunteered to fly to the U.S. to deal with it, even though I thought it was a less likely outcome, but it eventually happened. I spent four months in prison, and luckily, everything was fine when I got out.
The story of Binance and CZ
Anthony:
I think your decision to voluntarily return to the United States was unique. Maybe you thought the likelihood of going to jail was low, but you chose to face the charges anyway. I dont think anyone would suggest that you avoid it, but in fact, a lot of people would probably choose to avoid it, right? They would say, Im not going. So how did you make the decision in this process? Did you talk to friends or family, or what was your mood like when this happened?
CZ:
This has been a very difficult process. It is hard for me to describe it in words and for people to fully understand the complexity. It has been an incredible psychological challenge. I have considered different options many times during this process and have taken advice from friends and lawyers.
I have to weigh the possibility of becoming an international fugitive and making life very difficult if I choose to flee. I will need to be very careful at border checks and may never be able to move freely. In addition, my business will be severely affected. More importantly, many of our users, especially those who hold BNB, will suffer. The price of BNB is likely to plummet, and the entire crypto industry will be hit, and even the price of Bitcoin may fall. We have seen the huge impact on the market when FTX collapsed.
Although I can choose to live in a country without an extradition treaty and live a relatively stable life, this is not the lifestyle I want. I dont want to live a life of escape and hiding.
I have a certain amount of trust in the US justice system. Despite the political pressure on the crypto industry, I believe that the US justice system is still relatively fair. So I thought, why not face it? Even if the worst case scenario is jail time, it may not be for too long. I think the more likely possibility is a sentence of 6 to 12 months of home detention. At least this way I will not come into contact with other prisoners and my personal safety can be guaranteed.
In addition, I have resigned from Binance, paid a huge fine, and the company has also paid an even bigger fine. I think that is enough. So after careful consideration, I decided to face the problem and take responsibility instead of running away.
Anthony:
During this process, I heard that you missed the birth of one of your children, is this true?
CZ:
No, I did not miss the birth of my children. My youngest son was born in July 2023 and I flew to the US in November 2023. However, I did miss a minor surgery on my other son. When I flew to the US, the plea deal was not finalized. The US government wanted me to stay in the US and promised that there would be no restrictions on my movements and I could move freely in the US, but they did not want me to leave the country.
We argued about it, and I paid $150 million in bail, and three friends mortgaged their properties to me as collateral. I thought I should be allowed to leave the United States because I flew here voluntarily to plead guilty. It would be ridiculous to plead guilty and not show up in court. If someone doesnt want to come, just refuse to plead guilty and fight the case.
The initial judge agreed that I could leave, but the government appealed. This is a very rare appeal, and surprisingly, the judge upheld the governments request that I stay in the U.S. I had to buy new clothes in the U.S. with only a small suitcase of clothes. I also missed an important medical procedure for my older son.
My sentencing process was supposed to take only three months, but the government requested a delay on my birthday, and the court granted a three-month delay. I requested to leave the United States, but the court refused. So I stayed in the United States for six months, away from my family, just waiting for sentencing. Then I went through another four months in prison.
CZs prison experience
Anthony:
I think anybody who has kids and a family would understand your situation. My gosh, if they come to the U.S. and they cant leave or they have other problems, thats really concerning. Right? I think thats understandable. So you were sentenced. I understand you got four months in prison, right? I also heard that your first cellmate was a double murderer, is that true?
CZ:
Yes, its true.
What’s even more interesting is that before I was imprisoned, between sentencing and imprisonment, the government had asked the judge to handcuff me and send me to prison. But the judge rejected this request because I had behaved well during the bail period and had no violations in six months, and the judge did not think it was necessary to supervise me additionally.
After being sentenced, I thought I would be sent to a minimum security prison because my crime was a white-collar crime. In theory, minimum security prisons usually have no fences and are more relaxed, and prisoners can move around freely as long as they do not leave the prison without permission. But because I am not a US citizen, they put me in a low-security prison.
Low-security prisons are mainly for drug offenders and other criminals. My first cellmate was a double murderer who was serving 18 years of a 30-year sentence. Because of his good behavior, he was demoted from medium-security prison to low-security prison, but he could never enter minimum security prison.
The prison groups prisoners by ethnicity to reduce conflicts. I was assigned to the Asian, Pacific Islander, and Native American group. My roommate was a double murderer, but we got along well. He was actually very easygoing, but what made me most uncomfortable was not his crimes, but his snoring when he slept. I hesitated whether to kick him awake the first night, but considering that he was a double murderer, I thought I would forget it. The next morning, I told him in a friendly way, Brother, your snoring is really loud. He responded, Its okay, you can kick me awake. So I did it after that, and we got along well.
Before I went to prison, Bloomberg and the Wall Street Journal reported that I might be the richest person in prison in the United States. This coverage did not help me, but made me worry that I would become a target for blackmail. Fortunately, most people in prison do not read these media.
Anthony:
Have you ever felt unsafe, or had someone try to blackmail you?
CZ:
No, actually. I was a little apprehensive, but I quickly got along and became part of the group. I tried to fit in and didnt show any weakness, so no one tried to blackmail me. Although some people tried to negotiate better terms on some things, I didnt face any physical threats.
Anthony:
I would imagine that if a very wealthy, successful person went to a low-security prison, others would certainly ask you for advice on investing or cryptocurrencies. Did you talk to them about Bitcoin or other cryptocurrencies while in prison?
CZ:
Soon the prisoners and guards knew who I was, and some of them showed interest in learning about cryptocurrencies and investing. So we managed to get some books about cryptocurrencies mailed to the prison. I formed a small study group with them and spent 30 minutes a day discussing investment knowledge. I gave them homework and they asked questions. There were 9 TVs in the prison, one of which was changed to a financial channel to follow the price of Bitcoin. This kind of study group helped me build supporters and reduce trouble.
In addition, some guards also ask me if now is a good time to buy Bitcoin. I usually answer: I dont have internet here and I cant get market information, so I cant give any advice. Although my friends will send me some market updates via email, I try to keep a low profile to avoid unnecessary attention.
Overall, the guards were pretty nice to me. I didnt encounter any major violence in prison, although there were occasional fights, but they had nothing to do with me. I think the American prison system, at least the low-security prison where I was, is relatively safe.
Thoughts on pardons and legal battles
Anthony:
We just mentioned the story of Marc Rich, and I thought it was really interesting that you read that book. I liked that you said you studied it as a textbook, and you also mentioned the case of Mike Milken. There are many people in history who were accused, convicted, and even imprisoned who were eventually pardoned. I noticed that the current administration has also pardoned some criminals, some of whom are drug offenders and some of whom are white-collar criminals. Pardons are usually a complicated process, so have you ever considered applying for a pardon? Can you talk about your views on pardons?
CZ:
I certainly hope to be pardoned, but frankly, I dont know much about the process. For any criminal, getting a pardon is obviously a desirable outcome, but in my case in particular, I think there may be some political factors involved. Five days before I was sentenced, Senator Elizabeth Warren once again declared war on cryptocurrency on national television and wrote an open letter to the Department of Justice. So whether there are political factors involved, I cant be sure. Applications for pardons are usually handled by lawyers, and I dont want to comment on this.
Anthony:
So in terms of the legal battle, how do you view the charges that youre facing? Youve pleaded guilty, but do you think theres an element of legal battle in the investigation and prosecution?
CZ:
I think in the SEC case, its clear that there are indeed signs of a legal battle. Our case has now been dismissed with prejudice, which shows that the new administration is more reasonable in regulating the market. I feel like they are beginning to understand the complexity of new technologies and new industries and trying to find a balance between encouraging innovation and protecting consumers.
We have definitely seen a shift in attitudes. Not just in my case, but if you look at President Trump, hes clearly the primary target of legal battles and political targets. While I was in prison, I heard that President Trump went to Nashville in July to attend the Bitcoin conference and publicly announced his support for cryptocurrency. I also heard that Kamala Harris also expressed support for cryptocurrency. This was very surprising to me because I hadnt been in prison for two months, and the governments attitude seemed to have changed.
Additionally, I read that President Trump was charged with a criminal offense for taking some documents to the bathroom. I think thats a bit extreme. If my staff did that, I would probably reward them because it shows that they are making good use of their time reading documents. This situation makes me think that the definition of a legal battle is very subjective, especially in the context of the previous administrations clear hostility to cryptocurrencies. Elizabeth Warren has repeatedly warned against cryptocurrencies, and Gary Gensler has also launched multiple lawsuits. And now we see that the new administration is more friendly to cryptocurrencies and has a deeper understanding of finance and technology. So I think legal battles are indeed possible, but the specifics are still complicated.
