Original - Odaily

Editor - Loopy Lu

Yesterday evening, Binance CEO Richard Teng and co-founder He Yi held a joint Chinese AMA. This was also Richard Teng’s first Chinese AMA event.

In this online event, Richard and He Yi shared comprehensively, including how Binance views the settlement with the United States, progress in the field of compliance, future investment layout, and views on the cryptocurrency market. This AMA covered many areas and provided a comprehensive discussion on all aspects of the crypto world.

Richard emphasized that the trend of more and more countries regulating cryptocurrencies and the active layout of institutional investors in the industry will bring more confidence and funds to the cryptocurrency market.

He Yize said that he is relatively optimistic that the next high point will occur next year or the year after. He also emphasized his support for long-termism, saying that Binance plans to support Web3 entrepreneurs by incubating more projects to create more long-term sustainable value.

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

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

Three major promises of the new CEO

Richard：I have three major promises: We will always be user-centered, we will insist on creating first-class products and services that users love to use, and always put user experience and user protection first. The second is to work closely with global regulators. The third is to work with global partners to promote the growth and adoption of Web3.

I only made 2 million yuan.

When talking about the growth process of the Binance community, an industry experience made He Yi quite emotional. This clip also attracted the attention of listeners and was forwarded to multiple communities. Odaily intercepted and edited part of the content. The actual recording is as follows:

“Hello everyone, my name is He Yi. It has been almost ten years since I joined Binance after the Spring Festival in 2014. Over the past ten years, what impresses me most is the growth of the Binance community.

Last night, I saw a kid on WeChat. Two or three years ago, when he was still in college, he told me on WeChat, “I was very confused when I just graduated from college and didn’t know what to do.”

I suggested to him that he could do Binance’s rebates.

Yesterday, he asked me if I could follow him on Twitter and he told me he was doing rebates. I looked at his income and found that he only earned 2 million yuan. But for a recent graduate, this is pretty good.

I am also very honored to have so many new players and crypto OGs in our community joining us to build this industry together. I believe that the future direction of this industry will not be determined by the vision drawn by a few people. Wherever the industry will go in the future, it is up to practitioners in our industry to work together to find that path.

Why did management choose Richard as the new CEO?

Richard：My experience is primarily in traditional finance and regulation, and my career experience spans approximately 30 years.

In 2017, I started getting involved in the cryptocurrency industry. I was working as a CEO in Abu Dhabi at the time, and I firmly believed that the cryptocurrency industry was a major trend in the future and would have a great impact on the entire financial sector. When I was working in Abu Dhabi, we were one of the first regulators in the world to start regulating cryptocurrencies. So at that point in time, I already had a very deep understanding of cryptocurrency. Maybe it was my rich experience in the workplace and my understanding of the cryptocurrency industry that gained everyone’s support.

But I want to emphasize that the strength of the Binance team is not solely due to me. We have a very strong core management team, including core members such as He Yi, other founders, and partners who have made great contributions to Binance. In the past two years, we have made a lot of investments and hired many professionals. So our team is very strong in the Web3 field and professional talent.

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

But as the industry grows, we also need professionals who can speak the same language as regulators. Therefore, I think that moving forward more steadily and smoothly in terms of supervision is a challenge that we, the leading exchanges, have to face.

Another point, I think from my personal perspective, I have spent a lot of time in the past few years studying how to make a company last forever and how the organization can operate more efficiently. I think the most important thing is a clear division of labor and clear goals. As Elon Musk mentioned in his new book, the concept of entropy is actually uncertainty in organizations. How to reduce uncertainty? That is, there should be no people in the team whose roles are unclear. For Binance, the best division of labor is that I am responsible for serving users, and Richard is more suitable as CEO.

Is Binance’s opening price too high?

He Yi:Frankly speaking, we still have room for improvement in every aspect. Specifically, we have a dedicated team responsible for iteration in product research and development, such as the issue of Web3 wallet that is often mentioned. We did not invest enough in some areas before, but we will continue to optimize and improve based on user needs.

For me, its important to pay attention to users needs and complaints and continue to improve. Whether it’s complaints about Binance or issues about certain projects, such as the secondary market prices of some projects being too high, we are aware that this is a problem and are actively looking for solutions. I hope everyone will stay tuned and we will work hard to live up to expectations.

Does the wallet support inscriptions?

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

He Yi:Web3 wallet should provide users with an easy-to-use scenario other than exchanges. Our colleagues, their inscriptions were in full swing, as were their previous hair-raising activities. but IDon’t think Binance needs to completely copy this model, we not only need to look at the present, but also look to the future.

What we are really concerned about is, are there any serious projects in this industry that can build a great business model or truly bring changes to the world?

I think one of the benefits of Inscription is anti-VC, i.e. Fair Mint. But after the fair mint, there are so many inscriptions around the world undergoing large-scale mint, and each one needs someone to take over. But not all inscriptions have been taken over. The current status is still a bit vague, and it is still unclear whether the next step will be to the Bitcoin ecosystem. We are still observing and learning.

There are always new things emerging in the industry, but the bad thing is that there is always a lot of uncertainty. From a wallet perspective, Trust Wallet is still the largest internationally in terms of user size and daily active users. But whether it’s brushing hair or inscribing, Binance has not yet optimized the user experience and scenarios. In the future, we will further iterate and make up for what CEX lacks in the wallet field. I’m not sure if my understanding of the wallet is the same as everyone else’s, but at least I know that our current wallet is not good enough in terms of user experience and does not support effective lubrication and inscription operations.But I believe these problems will be solved one by one in the future.

He Yi:Regarding which chains will be supported first, our general principle is to support chains with enough users as much as possible. Essentially, trading platforms should not favor any one chain over the other.

Will regulatory fines jeopardize Binance’s financial health?

Richard：The fundamentals of our business are very strong and our financial position is very healthy. Our capital structure isno debt, and very modest in terms of expenses. Even though our transaction fees are very low, our revenue and profitability are very strong. Paying regulatory fines is not a problem. Users can rest assured that user assets will always be supported and protected at a one-to-one ratio. Users can withdraw assets from our platform at any time.

I would like to emphasize that the US regulators, after conducting a very detailed investigation of our operations, did not make any accusations or find anything unusual regarding user funds. this is very important. After the settlement with the United States, users’ confidence in us has actually continued to increase. There may have been some capital outflows in the past few days, but now funds are flowing back to Binance very vigorously.

He Yi:Whether all businesses in the currency circle are healthy and whether funds are safe are actually addition, subtraction, multiplication and division within 100. You can calculate the spot trading volume, contract trading volume, and then calculate the handling fee. In terms of expenses, Binance has not had any major expenses except for labor costs and server costs. If the law enforcement department wants to impose a fine, its impossible for him to fine him an amount that he cant afford to pay, right?

Will the platform bet against users?

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

The platform can make more money temporarily by competing with Trader, but this benefit is not long-lasting. Because no one can control this market, this market is always unpredictable. We have actually seen lessons learned from FTX.

Binance has been in this industry for ten years, and it is impossible to compete with users. When you have enough users, it is enough to charge service fees. There is no need to take additional risks. This is also our operating logic.

How to interpret the reconciliation with the United States?

Richard：Following the settlement with US regulators, this is a very favorable development for us. In the early days, we have always put users first, and there may be some shortcomings in terms of compliance. We also take responsibility for these previous mistakes.

These massive fines arent just happening to us, and these mistakes arent just happening to us. If you look at the top ten financial companies in the world, you will see that many financial institutions have been hit with huge fines, as much as $90 billion or even as much as $40 billion.

From a compliance perspective, Ive spent the last two or three weeks communicating with numerous institutional investors, users, VIP customers, partners, and potential partners. In fact, everyone is very positive about our reconciliation. In the past year, some partners may have been conservative, but now many are very active in working with us.

Compliance is a global trend, not just regulations we need to follow. As the largest exchange, we have often been in the spotlight of regulators, but now we have turned the corner and put some closure to the issues of the past.

“Welcome to report American users”

He Yi:The fine imposed on Binance allowed us to enjoy the treatment of the top financial structure in the United States.

When it comes to compliance, most people feel worried. But in reality, we need a comprehensive analysis of rapprochement with the United States.

We cannot accept US users after the settlement. But in fact, we already expelled American users from Binance’s platform two years ago. If you find that any American users are still trading on our platform, please notify us immediately and we welcome reports.

I think this is the inevitable direction the industry as a whole is going, and it’s not just happening with Binance, but other exchanges that are larger and want to come to terms with regulators are also going through this process. In other words, it will be more difficult if Binance chooses the compliance route and everyone else chooses non-compliance. At present, it seems that the entire industry is facing difficulties together, but overall, the scale of the industry continues to expand, and the market continues to grow and develop in a positive direction.

As a final note, I believe that income is not the only pursuit. This may sound a bit untrue, but for me, for CZ, and even for Binance, income is by no means the only pursuit. What we really pursue is to work with everyone to promote the blockchain revolution, change productivity and production relations, and create a new world. I think it is short-sighted to purely pursue income. We insist on long-termism, which will make us stronger.

How do U.S. “compliance officers” assigned to Binance work?

Richard：Let me clarify, the so-called compliance officer is not a U.S. government employee, but a very independent regulator. He is similar to an accountant and focuses primarily on anti-money laundering compliance. This independent regulator can help explain our commitment to compliance and anti-money laundering.

He Yi:I would like to correct that it is not the government sending compliance officers to become employees of Binance. In fact, it is stated in the terms of the settlement that we need to hire an independent third-party lawyer or consulting firm. Their job is to monitor whether we are fulfilling our commitments in accordance with previous agreements. For example, whether US users have been removed and whether anti-money laundering measures are appropriate. thisanddoes not meanlooking at themtake overof Binance’s operations. Here are some things that can be misunderstood in the dissemination of information.

Where will Binance Labs invest next?

He Yi:Recently Binance Labs has made some adjustments to its strategy, and we have decided to support blockchain startups on a large scale that may be unprecedented beforeten times。

We noticed that many projects received financial support from venture capital in the early stages, and then pushed the projects to the secondary market, and were eventually purchased by retail investors. In this process, the real early supporters did not share in the corresponding rewards.

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

Regardless of the industry, ultimately you need to create something, provide a service to users, and truly move the world forward, even just a little. In the process, income and profits may be obtained, and at the same time, it can also support users and token holders to develop and succeed together. Only win-win things can last. If you just cut it and run away, you will end up hurting your own credibility. So I might be a little bit traditional in terms of my investment framework and my thinking about the industry, but we still want to give it a try.

How do you view the market?

He Yi:There may be an industry high next year or the year after, but this is just my personal opinion, and some people think this view is too simplistic.

At the same time, we must be aware that as the scale of the entire industry continues to expand, it may face a ceiling. Cryptocurrencies are compared to various assets such as gold and stocks. In this case, growth may no longer be as rapid. But I still believe market cycles are here to stay. I am more optimistic that the next high point will occur next year or the year after.

Richard：Although there may be certain market fluctuations in the future, the general direction is still good. First, more and more countries are regulating cryptocurrencies, which will increase investor confidence. Secondly, institutional investors are actively deploying in the cryptocurrency field, which will bring more funds and investment to the industry. Therefore, I am very bullish on the overall trend of the cryptocurrency industry.

Currently worldwide, cryptocurrency adoption is around 5%. If more countries regulate the encryption industry and the industry moves towards compliance, the encryption adoption rate can increase to 10% or 20%.