The Pomp Podcast - CZ, Founder and CEO of Binance: Binance and the Future of Global Crypto Regulation

Episode Date: February 18, 2019

CZ is the Founder and CEO of Binance, a company with 400 employees, and hundreds of millions of dollars in profit. In this conversation, CZ and Anthony Pompliano discuss what he understood that many others didn't when he started the company, how he scaled, and what their future plans are. ----- This show is sponsored by The Grove: thegrove.co/pomp Your branding and website are the first things your customers will see.  You never get a second chance at a first impression, which is why it's so important that your website is sending the right message to the world.  Luckily, you have The Grove to help you with that. The Grove is a full service creative and design agency that helps new and established companies tell their stories.  The Grove firmly believes that a brand is more than just a logo - it is the entire essence of who a company is.  That's why The Grove works with companies on every aspect of their marketing, from brand identity, to web development and design, to SEO, to specialized graphic design projects. The Grove has helped grow companies like Tiffany and Co, Bloq, AAA, The Red Cross, and the Chamber of Digital Commerce by amplifying their branding and web presence.  Get big results today, and visit thegrove.co/pomp. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. CZ is the founder and CEO of Binance, a company with 400 employees and hundreds of millions of dollars in profit. In this conversation, we discuss what he understood when he started of the company that many others didn't, how he's scaled, and what their future plans are. I'm a big fan of the work that he's done, and I think that Binance and CZ are some of the best executors in the crypto industry. I hope you enjoy this conversation nearly as much as I did.

Before we get started, I want to talk about one of our sponsors, The Grove. As many of you know, branding and online presence is crucial to the crypto space. With so many damn scams out there, it's tough to tell who's legit. The Grove, however, is a full-service creative and design agency that will help you amplify your brand with the perfect website, logo, collateral, or custom design project. Branding isn't just about looking pretty though, dot, dot, dot, like me. The Grove understands it's about driving revenue. If you want to check out what they're doing, you can go to thegrove.co backslash pomp.

Again, that's thegrove.co, not dot com, co, new age stuff, thegrove.co backslash pomp. Let's crash their servers and light up the webpage. Let me know when you do it, and I'll shoot you some fire emojis on Twitter. Thegrove.co slash Pomp. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a

particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, I'm super excited. I've got CZ from Binance. We've got a whole bunch of stuff to cover. But first, sir, thank you so much for coming on. Thank you, Palm. It's a pleasure to be here. Absolutely. I think almost everybody in Crypto knows you as the CEO of Binance, but you've got a pretty interesting background beforehand. Maybe just talk about some of the stuff you did before you started Binance. Sure, sure. So I was born in China, went to Canada when I was a teenager, did high school and college in Canada.

And then I worked in Tokyo, New York, and then Hong Kong, Shanghai, and now everywhere. So that kind of gave me the sort of where I travel kind of background. I've always been a, I used to be a programmer. So I was computer science, C++ programmer. And then I was always working in the financial field. So in Tokyo, I worked for a subcontractor of a software company that programmed some stuff for the Tokyo Stock Exchange. And then in New York, I worked for Bloomberg,

mostly on their futures trading products. I was leading a development team that covered everything to do with Bloomberg Tradebook Futures when it first started. So I was the first team to start that group. And then I went back to Asia to start my own business. And again, still always, always in trading systems. So I got into crypto in 2013-ish. And then I think the rest is kind of the history, yeah. and do you feel like a lot of the uh living in different places working at different companies

that's helped uh in terms of the way that you view building binance today oh i think absolutely um i think um uh both from uh the the fact that when you travel through different countries you realize that one currency is limited to one to one country this is very different from a large percent of the population where they think that their local currency is every is the money whereas you you kind of view that as a different piece of paper um so that kind of shifts the mentality a little bit uh it also helps tremendously for binance to have the international uh reach and position so uh traveling between different countries i kind of always adopted the mentality with one world we're not focused on one country one geographic location so it does have a lot of

impact um very some sometimes less even less clear than that sometimes it's more subtle but um it does have an impact for sure and i guess really you know a lot of people obviously um know about everything that's going on now but it's not like you just stumbled into crypto a year and a half two years ago right i mean you've been around for quite a while maybe talk a little bit about when you first uh discovered bitcoin um and the broader crypto industry and some of that early stuff like the conferences um some of those stories sure sure so um the first time i heard about bitcoin was when i was hosting a poker game in my house in shanghai uh when bobby lee and rancao was playing so bobby lee is the ceo of btc china uh well he just about he was just about to

join btc china and that's when the conversation came up i was like well if he's gonna do that and then rancao lysby is gonna pump five million dollars into it this is sort of mid 2013 i better learned what it is right so i i googled bitcoin and read the white paper um and for me actually the white paper was relatively easy to understand i didn't understand a lot of the mathematics but i i had my private keys pgp private keys since 1998 so i i kind of understand how asymmetric encryption works and i've always worked in the financial industry so i kind of know how finances work kind of uh at least at some high level so it's quite easy for me to understand and i immediately see the utility of it and so and then i think it was like december 2013 i went to vegas

for a conference um i met with metallic uh matt rosek uh brock pierce charlie lee all the same crew um and i said well if this is the community uh back then back then they were they were not famous they were we were just all regular guys uh at a conference and uh um but i kind of liked the community so after that conference i i came back and told my boss i'm gonna leave and i'm gonna do something crypto and um so that's how i started really so yeah yeah and then what was that first thing you did because it wasn't to start uh binance no so um uh so bobby and i had talked about me joining uh btc china like maybe a technology or cto type of role um but somehow i I bumped into Roger Ver, and he's the biggest owner or shareholder of blockchain.info.

So I ended up joining blockchain.info as the third guy. But there were some blockchain.info, I was the third guy in, together with Nicholas Carey and the original founder, Ben Reeves. And then we grew the team to 18 people. I learned a lot of stuff from there. So blockchain.info back then was also a company that no offices, no bank accounts. And of the 18 people that we built, they were spread out around, I don't know, like 12 countries. So very similar to Binance today. But then the company took a different direction.

They took venture capital and everything else. I left just before that to join OKCoin, which is a Chinese-based exchange, which turned out to be, which basically morphed into OKYes today. But then, so OKCoin was on exchanges, which fits my tech background much more. But there were some value system differences or the way we do things that's different. And I left after about less than a year. And then I started my own startup, building technology platforms,

exchange trading platforms for other exchanges. And this is a cloud solution where if you pay a fee and point your domain into an IP address, then you have your exchange system. So we did that for 30 exchanges. and quite a number of them are not in the crypto space, actually. And then in 2013, a regulator shut down most of our clients, so we lost a lot of that business.

And we said, well, let's do crypto to crypto. That's how we started Binance, and it kind of worked out. Yeah, to say it worked out is an understatement, my friend. So maybe talk about, you know, when you started Binance, My understanding is that it was you and a very small group of others, and you were actually building the initial product. Is that correct? Yes.

So basically, when we started Binance, I had a team of about 30 people. I think 33 or 34 people back then. We were all crammed into one very small space in Shanghai. But we had most of the product already. We had to do some stuff on the deposit withdrawal security side, etc. But we had 90% of the product. So, we did an ICO. From the time we finished the ICO to launching the product took us 12 days. So, we finished the ICO on July 2nd, 2017 and launched it on July 14th, 2017. So, we had a small but very dedicated team and that helped a lot. Yeah, I mean, that's incredible speed.

And it's funny because, you know, as you and I have talked, the early days of Binance, a lot of those same ethos or the approach to building technology, even though you've now scaled to many, many more employees all around the world, a lot of that still applies in terms of the speed that you guys are able to move at and kind of the way that you approach building products. Yes, absolutely. So the original team, there's almost no one left. Everyone's still here. And they're all quite wealthy as well, at least on paper. And so we kept that team. The culture from the early days kind of filtered throughout the organization now. We don't have long-term plans.

We have weekly plans, and every week we'll get some stuff done. So we're still on that very fast pace. Even though now, given a larger, more decentralized team, there's more overhead on communication. But I still push things very, very hard and things get done very quickly. So we still move forward very, very fast. Absolutely. And what do you think that you knew in those early days? And early days is literally what? I think you guys are like 18 months old now, right? Yeah.

Right. What do you think you knew then that maybe other exchanges or other entrepreneurs didn't know or maybe didn't put as much importance on that you did? I think basically when we started, there was a big track on Polynex who were doing crypto to crypto only. Most of the other guys are still focused on fiat and everybody viewed fiat as the bigger market. And that's true. The market potential is bigger. But what people missed was the crypto to crypto. So you can go international, right? So you can have a small market in each country, but you can do 180 countries.

And even Polonex and Bittrex kind of missed this in the early days because they were focused on the US market. They only had an English interface. They only had a web interface. They didn't have a mobile apps back then. And so they kind of missed the international aspects. So we want a little bit of...

So basically back then, the crypto to crypto market is relatively new. All the guys trading it are advanced crypto users because basically you've got to have Bitcoin to buy some other coin. And that's the user using us. So those other guys missed the international aspects of it. So I think Binance is probably one of the very few companies

or at least one of the earliest companies that grown sort of simultaneously in 180 different countries. So that's never done before. The most of the mentality before was, let me target the US market. Let me conquer the U.S. market first, and then we'll move to China, and then we'll move to India, and then we'll move to Europe. So that's kind of the mentality where, given the blockchain aspect of it now, there's no borders.

You can grow in many countries at once. I think that's early days. That's one of the key benefactors for us growing quickly. Yeah, this idea that the blockchain allows for a world without borders is fascinating to me. As you were building Binance, what would you say were the biggest challenges? Because obviously there was the regulation challenge. But other than that, what else were those challenges in the early days that maybe people don't know that you guys faced? So, yeah, regulatory space is very challenging for when you're going in 180 different countries, because theoretically, there's a hundred different, slightly different variations of regulations going on. And also in our industry, to be honest, the regulations are still unclear in most of those countries, probably in all of those countries to some extent.

So that's always challenging. So you don't want to step on somebody's toes. You don't want to violate something. But then the rules are not clear. So what you do and what you cannot do are a little bit fuzzy. So you have to have a very strong moral compass. You have to have a very strong ethical values. And as the team gets bigger, we've got to make sure that the ethical values are inherited in every person.

So we've got to hire people very carefully to have that value. So that's probably the biggest challenge we have, is basically getting the team right. And once you have the team with those kind of values, then things become a lot easier. Other difficulties are more tactical. It's like, okay, communication. As the team is growing, we have a lot of communication issues. We didn't have any system to facilitate it. Everything was done either by chat or like a Google Doc.

But those challenges are more tactical. They're not very strategic. There are multiple ways to overcome them, and eventually you do. Yeah, so let's dig in a little bit about the organizational structure of finance because I don't think a lot of people actually realize. You went from 30 people all literally in a room to today. How many employees, how many different countries are they in? maybe just talk a little bit about that structure that you have that's so unique to what you guys

are doing sure so uh so today we have uh 400 uh exactly 400 people actually um and uh we've grown about 10 times in about uh 10x in terms of headcount in about 18 months and that's very challenging to deal with um and also we're spread out around i think 43 different countries the last time we counted um and uh so the way we organize ourselves and the only way we could organize ourselves is basically have very small teams and they're very independent they're very autonomous so very often i find out things afterwards uh after they're live they're done um and we're like okay that feature is already done and it's already live um so so it's a very it's a fairly decentralized organization now we have some mechanism to share status across groups or

across teams. And now the teams who have to cooperate with each other more often, for example, the marketing team kind of needs to interface with everybody. And now it's kind of slowly grown. The processes are sort of more fluid now. But there were times where the marketing team were pushing out stuff that the tech team doesn't know about or vice versa. So we had a lot of those issues.

But what we did is because we have people who are very passionate and they all work very hard on themselves, That overcame a lot of the issues. And we had, so basically, we just give them a lot of freedom. They decide what they're asking to do. Eventually, they figure out how to cooperate with the other teams, how to communicate, what tools we use, et cetera. So, yeah, I mean, I can get into a lot of details, but there are so many problems as well. For example, we have so many different chat groups, so many different chat tools.

And that's a constant distraction. How do you deal with that is another issue. Again, there's no perfect solution, so we cannot deal with things. Yeah, it fascinates me because there's so much talk in Silicon Valley specifically about distributed teams versus not distributed teams. And not only have you guys made it work at scale with 400 employees, but you've done it in such a short period of time. The way I think about it is the faster that you grow a distributed team, the more stress you put on everything from the communication to the systems, the management, et cetera. And you guys, although there's been those challenges, have not only kept it together, but frankly, the company has thrived while you've been scaling that employee base. um i think it's very uh i think we got lucky in a lot of fronts where um we have what's called a

um uh there's a term for a massive transport transformative mission or something so we got a mission that make that's that's meaningful and that's very impactful and people want to contribute to that and that's that's something i think as long as people working on something that's meaningful and impactful uh i think that's that's much stronger than paying them a little bit, like 20% more, 50% more. So I think that helped us a lot. And actually some of the external difficulties we face actually unites us.

So when there's an external war going on, we actually, the team unites together and try to fight that war. And that kind of overlooks the small differences or small problems within the team. So we actually faced a lot of external challenges. So I think just keeping the team busy on external challenges

and getting things done really fast helps a lot. And at the end of the day, I think we're doing a really meaningful thing. And everybody on the team knows that. And so I think that helps overcoming a lot of the issues that we're facing. But at the end of the day, we're still having a lot of the issues. We're still having a lot of the growing pains. And it's not a secret. For sure.

It's working. Well, one of the things that I've heard you say before is that, you know, finance isn't going to necessarily be the highest paying employer. And actually, a lot of people will take a pay cut to come work with you guys. You know, one, talk a little bit more about that. And then two, maybe talk about how do you describe that world changing mission to the employees internally? Sure.

So, yeah, so almost all employees, we don't really use the word employees, but we use more of team members. We view ourselves as one team. And the concept of a company is kind of virtual anyway. But so most people do take a pay cut to join us. And then the good performers, we send us, we compensate them in other ways. And some, usually when they first joined, they would almost most definitely take a pay cut. If they do well, we kind of, we can adjust over time.

So that definitely happens. And we look for people who are very passionate about this industry. And we, so we look for people who are already understanding this industry already. So, luckily, Binance has a really good brand reputation out there. So, it's quite easy for us to attract those guys. And so, basically, it's like two magnets attracting each other and we find those guys quite easily. And they find us quite easily as well. So, that kind of worked out.

In terms of communicating the value to the organization, I think, basically, that's what you say and that's what you do. So I think every decision we make internally, when we make those decisions, the decision process is quite transparent to most of the people on our team. So when we make those decisions, our philosophy is, okay, are we protecting our users? Are we doing the right thing?

And we ask that question all the time and we make decisions based on that. A lot of times we take a hit that other people don't know. And when you do that consistently, the team knows, the team trusts you. So the team gets a lot more exposure to my personalities or our leadership personalities. So that value,

so it's what you do that filters down. So, and the team, given their visibility to that, trust, like there's very strong trust within the team.

So that's also why most of the team take B&B as compensation. They know that B&B is good. So that's basically how iView kind of works. Absolutely. And so,

you know, one of the things that I think people would be upset uh is this idea that you're able to communicate very well internally with those 400 employees and they get to see you kind of day to day um the actions that you take along with the words that you say and kind of the values that you're pursuing um and the type of company that you aspire to build but there's plenty of people who don't get to see that right and they're i'll just put them in the category of like the detractors and these are the people who they'll

complain about everything from the listing fees to the transparency you guys have um to you know what you choose to list the regulatory um you know kind of avenues you choose etc what would kind of be your overarching message back to a lot of those detractors um and maybe something that they don't know or or kind of you know if you were talking with them that you would want them to understand sure sure so i think there's uh in terms of like the the detractors you you mentioned there's a few different uh groups of those guys um there are guys who just honestly don't understand we do or don't don't don't know us that well or they haven't followed our news they didn't watch what we do so for most people who's kind of look uh know our history watch watch this from day one

or watch watch us for a period of time they kind of get it that they kind of understand um so that's and there there are limitations on the amount of information we can disclose for example our listing process uh if we fully disclose that people will engineer that and we change that all the time anyway so we don't follow one standard one standard process uh and then at the end of the day we just want to list good coins and that's very generic and uh how much value do we put on number of users or product or um the token economics um it's very hard to say so um and it changes all the time and uh how how much listings do we charge well it changes in every case actually as well so um as a business we uh uh we keep a lot of that uh finance.com is a

centralized private business so we we keep and we keep a lot of a lot of those informations internally because we also don't want our competitors to know we also have other pressures from every from other directions so there are certain parts of the business we can't fully disclose. Because if we have no competitors, we have no risks and yes, then we can do that. But it's a little bit difficult.

And there's a second category of distractors, which are basically guys who I would say have some deficiencies on their own. They are either jealous or they feel entitled. So a lot of guys feel that they're

entitled to be listed on Binance for free. I'm like, well, no, not necessarily. That's not how the world works. In a decentralized, freedom-driven world, you do what you do, we do what we do. We have all the right to charge a listing fee if we want to. We also have the right not to charge it if we don't want to. And even if we don't charge a listing fee for a coin,

let's say we never charge a listing fee for Ethereum or Bitcoin, but we may charge a listing fee for your project. So there's a lot of those kinds of things where people feel entitled and they feel that the world should work in a certain way, but actually the world doesn't work that way, especially in a, you know, in a freedom driven world. So some of those guys can't really help. They really just need to come to an understanding of how the world really works and that freedom is freedom. And some, like some guys,

even get offended when I blocked them on Twitter, right? So the guy's talking shit. I just, I just, I just don't want to be, I just don't want to be bothered and block the guy. I don't need to hear what he says. And he says, well, now I'm violating his freedom of speech. I'm like, wait a second. You can still speak. I just don't have freedom to block you.

There are those guys I can help. So it is what it is. Listen, I'm with you on a lot of the Twitter trolls. You know, you and I probably get a good handful of them. And some of them you can kind of put up with and just say, you know, kind of ignore. But every once in a while, somebody crosses the line. And frankly, it's better for you to block them. So I fully understand that.

Yeah. All right. So let's talk a little bit about how you see the world, right? Because you're the CEO of one of the most important pieces of infrastructure in the global crypto ecosystem, right? And I think a lot of people see what you're doing on a day-to-day basis. but understanding your mindset or your view of the world will help them better think about crypto, right? And so one of the big differentiations is between these utility token

and like cryptocurrencies, things that I'll say are not as heavily regulated versus like tokenized securities, maybe talk through, you know, at a high level, the difference, how you view them. And then if there's certain jurisdictions around the world where you think that tokenized securities will kind of get adopted first, just given the kind of regulatory compliance that is, you know, easier to do in certain jurisdictions? Sure, sure. So, yeah, so that's actually a very good question and it's very broad. So I'll try to stab at a few different places.

I think in terms of a utility versus security token, that's sort of a very much man-made distinction. Again, as you said, different parts of the world regulate them differently. Some parts of the world don't even have regulations for some of that stuff. The concept is very different from different places. But I think fundamentally, a token or a coin should have value based on utility. So that's how you use it. It may be that it represents value in a company share or something that will be closer to security. I actually personally think security tokens are probably going to take off faster

where the regulations are more relaxed. So in countries where there's very heavy and very small regulations on securities, I think it's probably going to take off slower because there's just more work involved in moving through those very rigid structures. And I think also cryptocurrency, even tokens, that kind of represents, Basically, we talk about tokenizing everything in the world, and when you're tokenizing everything, many of those things will look like a security because they will represent certain shares in certain things. But I think fundamentally, cryptocurrencies probably should not be classified as securities, to be honest, because cryptocurrency does a lot more than what traditional securities do, because now you can transfer them on a blockchain. So if you use the traditional sort of security tokens model,

then now you have to do whitelist in the smart contracts of addresses of approved accredited investors, et cetera. Then it's still better than a piece of paper. The blockchain is still better than a piece of paper. But then you severely limit the growth of that new tool. So I think in countries where they're more relaxed about this kind of thing, So you can tokenize a building or you can tokenize real estate as you probably have a couple of projects involved in that area.

Then in countries where the regulations are more relaxed, as long as you're not a scam, as long as you have real estate that's being tokenized, then people are free to trade it more freely. Then you get a lot more liquidity. You get a lot more market cap. And then you get a lot more funds. And you will be able to grow faster. So I think in that aspect, I think in the early stages of the industry, the regulation should try to prevent bad actors, but not limit the industry growth.

So I think that's very key. And in terms of jurisdictions and sort of my kind of worldview of what we're doing with finance, right now, I think it's very clear that most of the money is still in fiat. So we need to somehow, we need to build bridges to let those money flow more freely into the crypto world. So that's why we're adding fiat on-ramps in different places. So that's why we're doing Jersey, Uganda, Singapore, Malta, many other places. And that's also why we enabled credit card payments

through a third party. And there's more. We are also exploring or at least researching debit card integrations, and other things. So there's a lot more to come. So we want to build a fiat on-ramp so that we can allow fiat to come into our world of crypto. And then on the flip side, of course,

we have the, right now, Binance.com is a centralized crypto-to-crypto exchange. So we are also building or releasing the Binance DEX, the decentralized exchange we have. So we're trying to explore on both sides. And then we have a launchpad, which I firmly believe is a very, very important part of our ecosystem, which is we want to help entrepreneurs to raise money

and also to be able to better develop our ecosystem and every other ecosystem as well. So I think fundraising is a killer app. Blockchain fundraising is a killer app of blockchain. And we kind of slowed down a little bit in 2018 due to the market correction, due to a large number of projects didn't work out. people are still trying to get used to that and some some scams and fraudsters involved once people learn how those things work once people learn how to deal with that i'm almost

100 sure that blockchain fundraising will be back uh it is a it is a killer app for a blockchain and we should help it and once we do that we're going to help the entrepreneurs uh very strongly in our space and uh to some extent in traditional industries as well and i think helping entrepreneurs is one of the strongest things to help ecosystems or economies grow. So I come from an entrepreneurial background, so I really want to help other entrepreneurs. And I think entrepreneurs are the guys who are going to make the world change into a better place.

So that's kind of my worldview. And we're navigating a very complex world right now with 100 different sets of regulations or different sets of rules that we made up for ourselves. We just want to be very cognizant of that and respect every rule that's out there. I'm never a revolution kind of guy. I'm not extremely libertarian like many crypto people are.

I'm not against any government, any individual, any company, any organization. I just want to improve things a little bit at a time. I'm not trying to remove banks. I'm not trying to revolutionize against them. I just want to provide a different alternative that potentially has different instead of characteristics or advantages and let people adopt. And some of those things will work, some of those things will not,

and the market will choose. So that's kind of my worldview. Yeah, one of the things that, you know, as you and I have talked more and spent a little bit of time together in Singapore, or that, frankly, I was surprised, is your approach to a lot of the decisions you make not only are one rational and obviously you're a smart guy who a lot of people believe in and you'd be able to build this fairly large company, but also your approach to regulation is quite sober, right?

You aren't kind of storming the hill, if you will, with pitchforks, right? You're saying, look, what are the rules there? Let's try to operate within those rules and understand that the historic frameworks that have been applied to some of this stuff may not be perfect, but let's do as little as we can to disrupt that. Let's not try to step on toes. Let's not try to piss people off or get in the way of regulators or do things they don't want you to do. and I wish that more people kind of saw that side because I think it's pretty commendable one and two frankly it's counter intuitive to what you know many

from the outside see sure yeah absolutely I think many people have a different I don't know for whatever reason have a different set of beliefs in how we operate I personally am not I'm a very practical kind of guy so I like to understand

how the world really works and figure out what we can do in the world to make things better and i'm not like kind of uh idealistic or uh philosophical that we have we have to make the world work in this way so um even though i have a set of philosophical beliefs on what's the best but uh practically what we can do we got to be program program very programmatic about it so i'm always thinking those kind of things in those kind of ways where so so far binance actually have never had any runnings with anybody um so uh contrary to what people believe so we actually uh we we're actually just trying to find solutions to make things better that's

that's what we do for sure and you know two of the parts of the business that you didn't talk about yet uh binance labs and then um the charity work maybe give a little overview of what you guys are doing there and why you're spending so much time and resources um you know building those two functions out sure sure i'll talk a little about balance charity first so uh there is a little bit of self-serving aspects to the philanthropy work, I think. I think using charity, social impact work to push crypto is the best way, or one of the best ways for people to adopt crypto. And when people receive a donation in crypto, they have to learn it. They have to learn how to use a wallet. They have to learn how to exchange it. And they have to learn what is Bitcoin, what is Binance

coin what is finance what is this wallet so i think that's the best way to educate i think there's more value in educating that person than giving them ten dollars in crypto so um and that will help uh and that's when you when you have that kind of positive experience as the first interaction with crypto uh that uh that gets that basically gets imprinted into your into your mind or subconsciousness and the crypto is a good thing so i think you can do that uh uh consistently a little bit by a little bit at a time if we just build that habit and eventually it's gonna it's gonna add up 10 years later the next generation people who grow up will like crypto so they will not have the same kind of misconceptions or concerns as we do about crypto as some of the

people today and uh so um and also um so and it's a great way to spread to to educate the industry And we also, of course, at the same time, we're doing a really good thing. We're doing social impact work. That's really satisfying. And it's very good that we were able to do that this early stage in the organization's journey. Binance Labs is an investment arm. So basically, there's many good projects. There's many things out there that's really good that we are not expressing, or at least I'm not expressing.

So, for example, wallets, other faster blocks. So there's a lot of stuff out there that I'm not an expert in. And there are other people building those projects. So this way, we want to find them early and we want to fund them. We want to give them money so that we want to invest so that they have a healthy platform to grow on. So Binance Labs and Binance Launchpad and even the listing process of Binance are three core pillars that we will want to help entrepreneurs and new coins. to new projects to grow. So we can invest in them,

we can help them raise money through Launchpad, and then we can list them to help them, give them liquidity, give them access to more users. So all of those things we do. And so Binance Labs, we make investments. We also do incubation programs. We just launched a fellowship program

where you don't have to really have a project or we don't have to invest in, but we can give you a grant. We can give you like a, and there's no strings attached. We can give you like, I don't know, a couple of thousand dollars or for a few months or so. You can go and do your project and there's no strings attached. We just want to help you build out the industry.

So that's kind of what we do in those areas. Got it. And then are there other things that you're thinking about now in terms of building out other like divisions of finance? Or do you think you'll just continue to invest in the ones you've got right now and then maybe in the future you can expand even further? I think Binance right now probably has enough sub-teams or divisions on the coverage. So I don't think we're going to add a lot more. To be honest, I actually think we're doing too much. I actually want to do less.

But the organization is decentralized. It's already spread out. So I can't really centralize them right now. But I think we're doing enough in terms of a number of initiatives. I think we want to go deeper in each initiative and do them well. The Binance virus is spreading and it's out of control. Thanks. The virus is always spreading. Exactly. So let's talk a little bit more big picture, right? Is there anything that you guys

are not doing today that you would like to do in the future? Not necessarily like new divisions, but just whether it's operating in certain jurisdictions, if it's adding certain types of assets like what is kind of the bigger larger um picture for binance right now from the ceo's uh seat sure um i i think as you said i think there's a lot of different jurisdictions we don't cover those servers or there's no coverage by anybody uh we want to cover those jurisdictions so that we can help those people get into crypto uh or get into the blockchain ecosystem uh so there's so many jurisdictions in the world and we're i'm always asking my team do you research this country, this place,

and give me a list of places where we should be next. And on the product side, so obviously we don't have margin, we don't have futures. So those things will probably come later. Security tokens, there's a few experiments run by different projects. We want to see how that market shakes up.

We have licenses in a number of jurisdictions for that already. But honestly, we don't know how to use those licenses. Basically, we don't know what we can or cannot do. Given Binance's impact, we actually want other smaller exchanges to try it first. Because with Binance, if we try something bad or something that's kind of steps on somebody else's toe,

the impact will be large and the reaction will be large as well. So we kind of want to avoid that. Other than that, I think we have enough work on our plate and we don't have to cover everything. What we want to do is we want to be the infrastructure player for a few things out of many, and we want to do them well. So for exchanges, definitely our core business. Decentralized exchanges, if that industry takes off, we want to be there.

Fiat exchanges, less important, but I think right now it's important. It's just for the transition period. So that's kind of our view. For sure. And one of those things that you personally, I think, have done a great job of is the way that you use Twitter, right? You really communicate well whenever there's maintenance or a security issue or anything like that. Maybe talk a little bit about why you spend time doing that. Your time is valuable.

You've got a bunch of employees. You could be doing a whole bunch of other things. But why spend so much time kind of communicating with customers that way and other people who are interested in what you're doing? Sure, sure. Well, just let me say first, on how to use Twitter, I'm always trying to learn from you. I think you are the best on Twitter. Your way of communication, just precise presentation communication is just awesome. So I'm always trying to learn from you on that.

And how you find out Twitter is great. So for me personally, I really like to interact with our community and with our users and what we call binatians. So in the early days, we were using WeChat. and but it only allows 500 people up to 500 people in a group and and then we switched over to like slack and slack has some security issues with spam bots and stuff like that so then we switched to I don't know what else we tried so many different things eventually we we're now using telegram as well but telegram groups go up to like 100,000 now they go up to 200,000 whatever you

type on screen doesn't stay there for like half a second especially when I People get excited, see this in here, and the screen just starts scrolling like crazy. So I find Twitter is actually the best platform where I can interact with a number of random people, but also a number of stead people that I follow. And the interaction is a little bit random because I don't see all the tweets that's tweeted at me, but I see a portion of them, and I just respond when I respond. And so I think that's kind of worked well because number one, it allows me to learn

what our users think, what our community think, if there's a big problem or if there are training problems, training complaints. Right now, there's big demand for OCOs and like a new order type. Before, there was a lot of demand for XRP base pair. So I kind of get a direct feedback that way. And I also get feedback on how our team's doing,

even though without the mentioned direct teams. And also I think the community appreciates that. So I try to spend somewhere between 10% to 20% of my time interacting with the community. And then the other 80% or so I spend internally with a team or doing other random stuff. So that's kind of how I allocate my time. And on Twitter, I don't view myself as a Twitter expert,

but what I do is very simple. I just be myself. So whenever I do a speech, get on stage or get on Twitter or you drive with somebody, I just say, be yourself. So sometimes I do stupid stuff. I yell at, oh, I like people or I even use profanity sometimes.

But look, I just be myself. And if that works, that works. If that doesn't, I steal myself. So there's really no choice. Yeah, look, I think people appreciate your authenticity. I think so. I don't see many other CEOs, especially for exchanges doing what i what i'm doing but i'm okay with it um i just try i just

do my thing and looks like it's kind of working so i haven't got into any big problems absolutely um one of the things that uh i'm personally interested in is you know why are you doing all this right what's kind of personally driving you to um continue to you know i always tell you you're pushing the pace right you're you're pushing the pace in terms of features that you're launching, the speed at which you guys are building, the number of assets that you're bringing online, the jurisdictions that you go into, like what is your personal motivation to do all of this? I think it's just to have a more fulfilling life, right? It's just that I think you want to make the best out of your life. I mean, basically we're, or at least currently,

we're on this earth for about, I don't know, a couple of decades. I don't know, 50, 100 years or so so i think basically um i so i asked myself right so what i want to do do i want to relax on the beach and uh sipping martinis all day long i'll get bored at like like in five hours or less and that's just not this is not fun do i want to drive a sports car no it's not fun um so uh i'm not interested in those kind of stuff so i think basically today uh i can relatively confidently say i can i can take care of myself relatively okay on most fronts some places i do need other people help etc so i'm still a social animal and then uh and then i think for uh for me or for humans in general the way i figured it out is to have the most meaningful life is actually just to

do something impactful i think as a species uh we are we're genetically engineered so that you take care of yourself first and then you want to take care of help others i think that's the most rewarding thing to do as a species so if we don't do that if we're not genetically engineered that way then our species probably would not exist so uh the most rewarding thing for me to do is find a way to help others and if i might if my abilities are stronger then i'll do more if my abilities are weaker i'll do it i'll just do my little bit that i can do so uh it's whatever i can do so i'm like honestly i have enough money and doubling it or taking half away of it is not going to change my life very very much so that doesn't drive me so i think basically at the end

of the day what drives me is to be able to make a positive impact and that's really meaningful and the best thing i know how to do is basically increase adoption of crypto i think that's going to be the most positive impact i can bring to our species so it sounds a little bit uh uh arrogant but that's kind of uh that's kind of honestly what i think and uh and then and then in terms of the speed of pushing things out you basically you do the you do your best and then you try to challenge yourself a little bit right so i think as humans we feel most satisfied if we do things that's a little bit challenging but not over not overly challenging to ourselves so we always want to push ourselves a little bit and um so we keep pushing so we're always competing with ourselves

so we keep pushing the pace a little bit keep pushing the pace a little bit doing the fastest we can while ensuring security and quality and that's and things just happen so i think And honestly, given that's kind of my personality, the team inherits quite a lot of it. We have very little bullshit, very little politics, very little, sometimes even communication going on in the team. But we just get stuff done. We're very resource-driven. We just get stuff done, and we ignore everything else. So it kind of works.

It works quite well. I love it. All right, before we end this, though, I want to do a quick kind of rapid-fire of questions. And when asked the question, you just fire away with whatever comes to mind. What's the most important book that you've ever read? Yes, I actually did prepare for this one because I listened to your podcast before. So contrary to my early answer, I would say the book I recommend very highly is actually called The Law by Frederick Bastiat. I think it's written in 1850.

So it's written more than 150, 170 years ago. But it's still there, still around, still being printed. And so people should read it. And that's what the law should be, describing that book. I believe that works very strongly. And I think when you read that, you understand how our world works better. There's a couple of other books, if I can squeeze in there, I would recommend. Economics in One Lesson by Henry something.

I apologize, I forgot the author's full name. That book is kind of an extension of the law. but it talks more about economics where there's very fundamental basic concept of economics that makes total sense by that book but that's a totally misunderstood by i would say majority of our population so people you got to understand how the world works and so economics in one lesson is a book i strongly recommend um yeah so uh those two books are are very good yeah and i've never heard of The Law, so I'm going to have to go read that one. It's a very short book. It's very good. I'll tweet you the link later. There's actually a third book, which I would really recommend as

well, which is Sapiens by Homo Sapiens, A Short History of Humankind or something. Again, I forgot the author's full name. But again, when you read that book, you understand how humans work, how we evolved, how we were made, what emotions we have, how do we think, how different structures of our societies work through history basically you understand how we work which is very important um so uh i think i think to be successful you got to understand how the world works and how we work so i think those books are very very helpful for sure um all right i usually uh end with letting you ask me one question but before we do that we got to talk about aliens what's the uh what is the probability that aliens exist so this is a very interesting topic i um

I believe almost 100%, basically 99.99999% that aliens do exist. Which form, what does that look like is very variable, but they could look similar to us in being able to communicate, interact with us. They could also be aliens who are totally different

dimensions with us that we can't really interact with. I think both exist. And on that topic, we could open up a whole different kind of worms. I also believe in simulation theory, the fact that basically we live in a simulation, I'll kind of also believe in that. But anyway, so we can, we can have some time. CZ, man, I knew I liked you. I knew you

were going to believe in aliens. Yes, absolutely. Yes. Amazing. All right, to finish it up, what one question do you have for me? So I have a more of a fun question, to be honest. So congratulations on the recent fundraising on your fund. I have a question about that. I heard through the grapevines that you have a police pension fund investing in you as well yes there is a uh it is a public police pension in a uh a county in virginia uh in the united states that is awesome congratulations that's my question i think that's my question yeah look no it's interesting because um i think a lot of people uh you know there's been this narrative of like the institutions are coming. We've been hearing that since end of 2017, early 2018. And last year

in 2018, we did get a first look at what that might look like in that Yale, MIT, Notre Dame, Stanford, Harvard, a bunch of endowments came in. And some of them, very small checks, some a little bit more meaningful checks, but it was pretty much contained to the endowments. Then the other data point that we had was, um, the, uh, Singaporean government, right. Uh, they actually invested in you guys. Um, and so that was kind of another institutional type investor, you know, putting money into the crypto ecosystem. Uh, but we wanted to raise a fund and really focus on institutions. And so, uh, the, the fund that we announced is anchored by two public pensions. And then it also has, uh, an endowment, a hospital system, an insurance company, et cetera. And, you know,

frankly it's funny to hear a lot of what you're talking about because um they really do believe in um a lot of the like every stock bond currency and commodity is going to be digital or tokenized right there's going to be this new digital world that has uh less focus on borders um just you know across the institutional world you you see them buying into a world of like automation and machine-to-machine transactions. And so going into a venture fund where you can own equity in these businesses in this industry is a little bit less risky for them than, say, just buy Bitcoin or BNB or whatever. And so I think that this is a nice first step. And then hopefully over time, more institutions will follow them and go to the liquid side.

The other thing that I will say is the police pension. It's funny to me personally because while everyone is yelling and screaming about criminals use this stuff, bad people use this stuff, I think that those that are closest to crime, like law enforcement, whether it's at the federal level, the state level, or the local level, they realize that bad people do bad things regardless of the industry. yeah there's people doing bad things on wall street there's people doing bad things in crypto there's people doing bad things with bitcoin and there's people doing bad things with the u.s dollar right and so it's less about you know the dollar being bad or bitcoin being bad or the industry and it's much more about let's go find the bad people and make them stop and then let's allow innovation to thrive right so i think there's a lot actual overlap between the way that you see what you guys are doing and kind of building the company and the way that these institutional investors see the world. And so hopefully we'll just have more of them come into

the space. Sure. Absolutely. I mean, that's awesome. And it reminds me of the movie or the TV series Billions. I didn't watch much of the series, but the episode I watched was the police fund investing in the funds. So now you're doing that. I have to admit, I've seen it and I did not think that people were going to make that reference and of course twitter is undefeated they literally at 6 a.m this morning started tweeting uh photos of the uh the billions characters and so i got a good laugh out of that right right and also just just one more clarification um uh the uh it's not that i gotta say this so that my investors doesn't get on me uh it's not the singapore government that invests in us it's the uh vertex which is a uh holy owned

subsidiary of uh domestic which is basically a singapore sprint fund that invested in binance but again it is it is a very it is a very sort of a government related type of fund that's that's you that's reinvesting yeah yeah yeah so it's related just so the structure is a little different yeah yeah so i just want to make that clear so that we don't have any i don't have any guys you got it um all right listen man i uh i appreciate everything you're doing i think that um you know, there's a lot of people who, uh, who use your service every day. You obviously are employing a ton of people and, uh, you are one of the entrepreneurs that is at the forefront of this industry. Um, and so just, uh, just keep going and let me know however we can help. I,

um, I'm cheering for you. Thank you so much. And, uh, you've been an inspiration in our industry and for me as well. So, um, yeah, I mean, we talk to each other, what we see each other on Twitter all the time. Uh, let's keep the conversation going and, uh, good luck with the fund. If you need any help, let me know. You got it, sir. Yeah. Thank you. All right, guys. I appreciate listening to that episode. I enjoyed it and I hope you did too. Before we go, I want to remind you that it was brought to us by The Grove, a full service creative and design agency that has worked with companies like Block, Chamber of Digital Commerce, AAA, and the American Red Cross. You can check out more of their work at thegrove.co backslash Pomp.

Again, that's .co and not .com. thegrove.co backslash Pomp. Go check it out and let me know what you think. Hey everyone, Pomp here. If you like this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off The Chain homepage, scroll down until you see the five blank stars. taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us

take the entire crypto ecosystem to the top of the charts i appreciate you listening and see you next time on off the chain