CZ(CZ), founder of the well-known exchange Binance, was interviewed on July 2, describing his journey from being an immigrant without water and electricity, to working hard around the world, and finally building the world's largest crypto exchage. He also personally responded for the first time to the details of the lawsuit filed by the U.S. Department of Justice and the SEC, his experience of serving four months in prison, and his latest views on the future of the U.S. market and the crypto industry.
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ToggleThere was no water or electricity when I was a kid, so I immigrated to Canada and it became a turning point
CZ started by talking about his background. He was born in a rural family in China. When he was a child, his family did not even have water or electricity. He could only use oil lamps to study, and his mother had to walk 300 meters to the well to fetch water every day.
When he was 12 years old, CZ and his family immigrated to Canada, but life was still difficult in the early days of immigration. CZ's mother did not speak English well, so she could only work in a sewing factory. Although life was difficult, he said:
“I’ve never been in debt. My parents are always saving money.”
He won numerous awards and skipped grades to study. He broke into Wall Street with his skills before graduating from college.
CZ, who has good academic performance, has won the top 100 in Canadian math competitions many times. He mentioned that because his mother is a teacher, he was sent to elementary school early, so when he came to Canada, he had to go back to elementary school for a year. But he said:
"My math level at that time was already at the high school level."
Later, CZ was admitted to McGill University in Canada, but during his internship in Tokyo, his work performance was too good and the company did not allow him to go back to school, so he worked hard without getting a degree. He worked in Tokyo, New York Stock Exchange and Bloomberg, responsible for financial system development.
At 35, I got involved in Bitcoin and sold my house all-in! "I didn't sell it even after the price dropped for two years"
In 2013, CZ first came into contact with Bitcoin. At that time, Bitcoin was about $70. Six months later, it rose to $1,000. He convinced himself that he could not miss this wave and decided to sell his house, quit his job, and devote himself to Bitcoin full-time. He laughed and said:
“I used the money from the sale of my house to buy BTC in batches, with an average cost of about $600, but it eventually dropped to $200.”
His mother once called him a fool: "Why don't you just stay at Bloomberg?" But he said:
“I just believed earlier than others that Bitcoin is the future of financial technology and I can’t miss it.”
Having worked as a B2B software developer, the ICO boom in China prompted him to build his own platform
In 2015, he wanted to open a Bitcoin exchange in Japan, but he couldn't find investors, so he transformed into a B2B software company and built exchange systems for others. Although the business was stable, in 2017, the Chinese government banned crypto transactions, and more than 30 customers were wiped out overnight.
CZ said: “We had a whole technical team at the time, and we decided to build our own exchange.”
That year was the official beginning of Binance.
It ranked first in the world within half a year after its launch, with 300,000 users pouring in every day
Binance was launched in July 2017. In just six months, CZ said:
“One day when I was in Tokyo, a friend suddenly sent me a message saying, ‘Congratulations, Binance is now the world’s number one in terms of trading volume.’”
At that time, when the ICO boom was in full swing, Binance took the lead in supporting a large number of ERC-20 tokens and shortened the customer service response time from 2 months to 1 hour, greatly improving the user experience. He said:
"At that time, we had 300,000 new users a day, and the CTO was woken up by calls in the morning and evening, and he didn't sleep at all."
He revealed that Binance earned $1 billion in the first year, but he reminded himself not to be too excited and to keep a buffer because the price of the currency would fall.
7,000 Bitcoins were stolen in 2019, but he insisted on going on a livestream to emphasize the safety of his funds
In May 2019, Binance’s hot wallet was hacked, resulting in a loss of about 7,000 BTC (about 40 million USD). He admitted that he was very nervous at the time, but he went on the live broadcast as usual the next day. He said that he shouted “Funds are SAFU”, which was later made into a meme by the community.
However, CZ said that the hacking incident has made more people trust Binance:
“After the withdrawal was opened, the amount users deposited back was more than what they withdrew.”
FTX case broke out and was implicated. He took the initiative to go to the United States to answer the charges and believed in judicial justice.
After the FTX collapse in 2022, users lost trust in CEX. Binance processed more than US$14 billion in withdrawals that month, but the system operated as usual without any problems.
In 2023, the SEC filed a lawsuit against Binance and CZ himself, accusing them of illegally transferring user funds. He said:
“The judge directly asked the SEC what evidence they had, but they couldn’t produce any.”
The case was eventually dismissed, but the U.S. Department of Justice (DOJ) later intervened, and CZ finally reached a plea agreement with the DOJ, admitting to violating the Bank Secrecy Act (BSA) and voluntarily flew to the United States to face trial in November 2023. CZ said:
"I don't want to flee, and I believe the American judicial system is still fair."
Sentenced to 4 months in prison for discussing Bitcoin with fellow inmates
He originally thought he would be under house arrest, but he was sentenced to four months in a low-security prison. CZ said his first roommate was a "murderer," which made him afraid to kick him awake the first night, but they got along well afterwards.
CZ then added:
“I didn’t see any violence in prison. I also started a crypto reading group and discussed Bitcoin with several inmates for 30 minutes every day.”
One administrator even secretly asked him, "Is it a good time to buy coins now?"
Still betting on Bitcoin in the future and hoping Binance can return to the US market
After being released from prison, CZ said that his life is safe and his assets are enough to support his future career development. He is optimistic that the intersection of Bitcoin, AI and government blockchain applications will become a trend.
He finally emphasized:
“We really hope that Binance can return to the U.S. market. U.S. users are currently spending the most money but enjoying the least services. This is unreasonable and not what we want to see.”
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
Recently, the cryptocurrency exchange OKX has frequently implemented risk control measures, causing dissatisfaction in the community. Many users reported that their accounts were frozen without warning, and even after completing the complicated KYC process and supplementing the documents, they still could not be unlocked. CEO Star Xu also personally apologized for this. Behind the scenes, it was reported that OKX was conducting a large-scale "risk and doubt cleanup" in order to go public in the United States or cooperate with the tightening of European regulations.
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ToggleOKX's multiple users were subject to risk control, and Star Xu personally apologized: the misjudgment rate is still high
Over the weekend, several OKX users posted on X that their accounts had been frozen multiple times. Even after completing identity verification and submitting work records and employer information for the past 10 years, they were still unable to retrieve their funds, sparking criticism from the community.
In response, OKX CEO Star publicly apologized , admitting that the system has a "high rate of false positives" and that even if users are compliant, they may still be subject to risk control measures due to misjudgment by algorithms and data models:
OKX is working hard to optimize the review process and user experience, but it is undeniable that misjudgments cannot be completely eradicated in any compliance system. We will continue to optimize the user experience of the data submission process.
He said, "If users are asked to provide information such as source of funds, proof of address, previous work units, etc., please submit it truthfully. As long as users do not engage in illegal activities, the security of your account and funds will not be affected."
Listing in the US or tightening of the EU? OKX’s risk control upgrade has its reasons
Market observer AB Kuai.Dong pointed out that the intensified risk control measures of OKX may be related to two major changes:
The plan to go public in the United States is accelerating : It was previously reported that OKX was preparing for an IPO in the United States, and the US regulatory authorities have extremely high requirements for KYC and source of funds review of crypto platforms. Referring to the compliance pressure faced by Didi Chuxing during its listing and delisting , it may be understandable that OKX is now taking frequent risk control actions.
Malta tightens regulation : In the past, many exchanges obtained EU MiCA licenses through Malta. However, according to CoinDesk, Malta’s regulatory attitude has recently become stricter and retrospective inspections have begun, which may be triggering a wave of exchanges supplementing documents.
Therefore, the platform has conducted a comprehensive upgrade review of cross-border VPN users, accounts associated with sanctioned regions, accounts that have interacted with Dark Web browsers, and those whose loan funds are of unknown origin. Even employees with traditional financial backgrounds have been interviewed and resigned , seemingly to prevent regulatory organizations from conducting background checks on employees. This move shows that this wave of risk control is not only aimed at retail investors, but also at higher-level policy implementation.
Is lending for cryptocurrency trading a high-risk strategy? Star: Not recommended, not supported
What caused controversy was that Star Xusaid that he did not welcome loan users, which indirectly reflected the fact that OKX intended to clear out users who used loan funds to speculate in cryptocurrencies. User @linwanwan823 analyzed that there were two core considerations behind this:
Political and regulatory risks : In traditional financial institutions, once loan funds flow into high-risk speculative markets such as cryptocurrencies, they may be blamed by regulators. Especially when some countries enter a "tight fiscal period", the review of the use of funds will become more stringent.
Impact on the path to listing : If OKX is found to have a large number of users taking out loans to speculate in cryptocurrencies, it may have a serious negative impact on its IPO. Even Coinbas made a lot of adjustments to its KYC process before its listing.
There is no middle ground? Why not let the suspicious users withdraw their funds themselves?
Crypto KOL @BroLeonAus pointed out that he understands the sacrifices Star made to get OKX listed, and even forced users to accept it despite the public complaints about risk control. But he also stated that compliance itself has no upper limit, and regulators certainly think that the stricter the better:
I think we cannot blindly believe the regulator's words. Otherwise, we may go too far, the business department will not be able to continue, and there will be a large number of users left, but they don't care about this result.
On the other hand, many users also questioned that if the platform determined that the source of funds was suspicious, why didn’t it allow users to withdraw the funds directly and leave, but instead repeatedly froze and delayed the process and put the user into an infinite loop of submitting additional documents?
The author believes that the flow of these suspicious funds may also be investigated by regulators. If the platform allows suspicious users to withdraw funds, it may also be involved in criminal liability, just like its previous DEX incident.
Compliance tightening is endless, will DEX become a safe haven in the future?
This incident has once again triggered reflections on the risks of centralized exchanges (CEX). Under the pressure of risk control and compliance, CEX would rather kill 3,000 people by mistake than let one person go, and this is precisely the opportunity for the development of decentralized derivatives exchanges (Perp DEX). @BroLeonAus also linked Binance founder CZ to the DEX Aster he promoted.
Although DEX still has operational thresholds and liquidity challenges, in the face of tightening compliance and complaints about risk control, it may become the next wave of safe havens for users.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
Coinbase, a US cryptocurrency exchange, announced the acquisition of token management platform Liquifi, which not only solves the pain points of developers in the process of issuing coins, but also lays a key foundation for Coinbase to consolidate its institutional-level business. As the trend of traditional assets on the chain becomes more and more obvious, Coinbase is also accelerating the creation of the next-generation token issuance and custody platform to strengthen its layout in the field of asset tokenization.
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ToggleWhat is Liquifi? Solving the three major pain points of token issuance and management
Founded in 2021, Liquifi focuses on assisting project teams in handling the tedious processes in the early stages of coin issuance, including "token capital table management (cap table), unlocking and vesting mechanisms (vesting), compliance and tax processing", etc. These detailed tasks are the key to whether the coin issuance project can successfully prosper.
Currently, Liquifi has provided services for well-known projects such as Uniswap, Optimism, Ethena and Zora, and has accumulated a lot of reputation in the encryption field.
Greg Tusar, vice president of institutional products at Coinbase, said: “It is too difficult to issue tokens now. In addition to having to draw up their own equity structure spreadsheets and vesting processes, early teams also face high-risk legal, tax and compliance obstacles.”
Liquifi automates and simplifies these processes that are prone to omissions and regulatory issues, making token issuance and management "simpler, more compliant and more scalable."
Integrating Coinbase Prime: Creating a one-stop institutional coin issuance platform
Coinbase announced that this acquisition not only incorporates an independent product, but also incorporates Liquifi into its institutional platform Coinbase Prime, further completing the puzzle of its coin issuance infrastructure. Tusar pointed out that in the future, Liquifi's token management function will be integrated into the custody, trading and financing models to provide issuers with a compliant "one-stop token management infrastructure."
Such a layout not only serves crypto-native projects, but also provides solutions for traditional enterprises to put their assets on the chain. Through the two companies, Coinbase can complete the entire coin issuance process from token issuance, management to trading, and directly connect with the long-term trend of asset tokenization.
Targeting the tokenization trend: Coinbase's M&A strategy is on the rise
Coinbase has been very active recently. So far this year, it has acquired the on-chain privacy platform Iron Fish , the advertising platform Spindl , and the iconic derivatives exchange Deribit , showing that it is no longer satisfied with being just an exchange and highlighting its ambition to expand its business.
( Coinbase plans to launch tokenized stocks, becoming the blockchain version of Robinhood )
Paradigm partner Hosseeb is also optimistic about the acquisition:
Token and unlocking management has always been a pain point in the industry, and as the trend of asset tokenization accelerates, this will be a key step for Coinbase to consolidate its institutional business.
The era of asset tokenization is coming, and issuing infrastructure is key
The so-called asset tokenization is to present traditional financial assets (such as stocks, real estate, and funds) in the form of on-chain tokens, making them more liquid, programmable, and global. This trend has been regarded by traditional financial giants such as JPMorgan Chase and BlackRock as the focus of the next wave of financial technology iteration.
Coinbase's acquisition of Liquifi at this time is equivalent to occupying the "entrance to token issuance", allowing it to seize the opportunity from the first step of asset on-chain. When the token issuance and management process is simpler and more compliant, it will certainly be easier to be accepted by other traditional institutions.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
On the eve of the ETHCC conference, Robinhood suddenly announced that it would hold a dialogue with Ethereum founder Vitalik Buterin and the Arbitrum development team, sparking market discussions about its upcoming release of its own blockchain. Now this potential L2 is not only expected to become the main rival of Coinbase Base, but it may also make it difficult for crypto startups to continue their next steps.
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ToggleRobinhood on stage with Vitalik and Offchain Labs: Arbitrum selected?
Robinhood announced yesterday that it will hold a fireside chat at the ETHCC event. In addition to Johann Kerbrat, general manager of its crypto department, participants will also include Ethereum founder Vitalik Buterin and AJ Warner, CSO of Arbitrum technology team Offchain Labs.
Although the theme has not yet been revealed, the community generally links it to the previous news that Robinhood is entering Europe and intends to launch a tokenized platform. It is believed that Robinhood finally seems to have chosen to use the latter's architecture and technology stack to build its own L2 blockchain in the competition between Solana and Arbitrum.
( Robinhood enters European market, plans to launch its own blockchain platform to tokenize US stocks )
Judging from the timing, guest combination and ETHCC, it may indeed be an announcement of a new product or business expansion. As soon as the news came out, the price of Arbitrum ($ARB) rose by 16.6% in a single day, which also shows the excitement of market sentiment.
Will Robinhood Arbitrum L2 become a potential rival to Coinbase Base?
Selv Labs founder @0xfoobar believes : "If Robinhood really launches L2 based on Arbitrum, the market may usher in a new check and balance force that will go hand in hand with Coinbase Base."
Although there are some differences in the underlying technology (Base uses Optimism, Robinhood is rumored to use Arbitrum) and the direction of network development (Base emphasizes on-chain and open construction, Robinhood may focus on the tokenization of currency), the two still have something in common: "both are large brokerages or exchanges with huge user traffic and brand advantages."
As Robinhood intends to guide its millions of traditional users to participate in on-chain activities directly within its app, the competition to become the first user portal for future Web3 will intensify.
As traditional brokerage firms swallow up market share, is there any future for crypto startups?
Robinhood’s move has also caused the community to worry about whether crypto startups will be impacted. Crypto KOL @howdymerry bluntly said:
Robinhood is going to take the stage tomorrow and slaughter a bunch of startups with their announcement. Welcome to the era of vertical integration in crypto, where everything we have worked for the past three years will be swallowed up by an incumbent that already owns the channel.
Given Robinhood's huge user advantage, built-in wallets and assets, brand trust and regulatory qualifications, once the company successfully opens up the on-chain entrance and payment structure, it will undoubtedly be a major blow to startups that are still looking for users and funds.
Robinhood started too late: Just a copy of Base?
However, not everyone is optimistic about Robinhood's entry. Some people believe that they not only entered the market too late, but also have an uncreative strategy:
Robinhood is just copying Base by changing the underlying technology. They neither understand this space nor show ambition.
User @mrink0 said the company missed a real opportunity. Not only does its L2 have a blank starting point, it may also face challenges such as cold start and ecological poverty.
Will platforms building their own chains become a new narrative?
Regardless, whether Robinhood will announce any major news is still an unknown, but it is enough to make the community excited. In the future, there will be more and more cases of traditional Web2 platforms entering the crypto field through their own blockchains. At that time, the crypto battlefield may shift from the TPS and technical architecture of the public chain to who has the most users and the most diverse and practical product integration.
In addition to Coinbase and Robinhood, Kraken and Ethena are also participants in the tokenization platform, and it is also exciting to see how the highly competitive market will change.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
