Sam Bankman-Fried, the co-founder of FTX, says your tweet killed FTX.
If one of your competitors can make a tweet to kill your company, then you don't have a company. If the whole time he was running a company that I could kill with one tweet, he would never have that company. But you didn't expect this at all or you underestimated the impact of a tweet you could do. So I think my tweet was...
CZ Changpeng Zhao, the founder of Binance, the world's largest crypto exchange by trading volume, a leading crypto figure, now investing, advising governments, and advancing education through Giggle Academy.
Let's start with the beginning. Who are you?
I'm like a crypto guy. President Trump called me the crypto guy. I go to a lot of different countries advising on crypto regulatory frameworks, etc. So I'm usually viewed as the crypto sales guy.
What happened in your life that can help explain how you became one of the 20 wealthiest people in the world before the age of 50?
Okay. Well, first of all, I went to prison for a few months.
What belief do you enter prison with that you left without?
I was very worried that I'll be kept there forever. They will bring another charge. They'll bring another charge. There'll be endless charges. In my case, no one went to prison for a single violation of a banking secrecy act in US history. Even till today, most people are not even charged.
What does Hyperid do better than Binance do?
Uh, well, they don't have KYC. It's almost that.
The US president went about 10 to 40 presidential pardons every year. You got pardoned by President Trump. Walk me through the pardon process from the first phone call to the final signature.
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Yeah. And also uh yeah a little bit sleepy actually.
The in and out is your life in general?
Pretty much go to a place usually stay one night or two nights and then uh yeah get out. There's always something happening like later. So...
I'm not sure. Yeah, but I get like now it's actually much easier than before. So I got a lot more um downtime. Yeah.
Um I don't actually I usually let my team choose. So my team is pretty good at choosing like especially this type of events where like who to talk to, which podcast etc. My team does all of that like pretty generally pretty good team. Yeah.
If I told you that the biggest shift in your life hasn't happened yet. What do you think that that shift would be?
Uh I believe that u I don't know what that will be. Uh but I think there's always more opportunities in the future than there were in the past and the pace of change or shift is f getting faster and bigger. So um no before the internet you know it's hard to change the whole world at the same time. Now information flows more freely. Now we have a network for money a blockchain and now we have AI. So I think um there will be quite a lot of big shifts in the future. I just don't know what they are. Um I think AI is going to cause a lot of um efficiency uh improvements and that's also going to speed up shifts. Yeah. So...
If the biggest shift hasn't happened yet for you, let's start with the beginning. Who are you?
Uh I'm like a crypto guy, crypto sales guy. I think President Trump called me the crypto guy. So yeah, I'm a strong believer in blockchain technologies and I think that's where I uh made most of my uh the biggest contributions so far and I think that's where I continue to spend most of my energy as well. So I view myself as a crypto guy. I go I go to a lot of different countries um advising on crypto frame regulatory frameworks etc. So I'm usually viewed as the crypto sales guy.
There's a common pattern amongst our guests. They have something that happened in their life often a childhood trauma that gave them a chip on the shoulder which explains their incredible success today. What happens in what happened in your life that can help explain how you became one of the 20 wealthiest people in the world before the age of 50?
Ah, okay. Well, first of all, I don't think I'm the ranking correct. Um, I may be the top 100 or 500. uh um etc. There's a lot of people who's not on that list and also my network is severely skewed on the high end.
Why do you think that's the case?
Why do you think that's the case?
I have no idea. I think they just want to make I don't know. They just want to sell news. So putting a crypto guy really high up there may maybe a way for them to sell news. Actually heard that some of our Chinese competitors actually well one I heard the rumor is one of our Chinese competitors actually paid money to some journalists to rank me higher so that you know I get more scrutiny u so I don't know I don't know though I don't know for sure um yeah what's the question um where where does the fire in belly come from a yeah um I didn't I didn't I cannot remember any traumatic experiences in my childhood but I grew up fairly poor. Um, you know, we, uh, my family immigrated to Canada. Um, both my parents are working at close to minimum wage. Uh, compared to my friends who are like, you know, investment immigrants from Taiwan, Hong Kong, um, or other uh, places, they're quite wealthy. So, that gives a little bit of pressure uh, when I was younger. Um, but overall, there's no traumatic experiences. Uh, I had many good uh, Taiwanese friends. They were all very nice to me. Uh, and their their families are very nice to me, too. So uh so it was like but there was a bit of comparison.
Um yeah so but for me I feel lucky that I was able to stand on the shoulder on my parents' shoulder. Uh my parents immigrated to Canada uh for the benefit of of me and my sister. Um, so I I'm basically a second generation immigrant and they say the second gener generation immigrants usually uh they look at how hard their parents work and that's usually the the and then the parents because my parents don't speak English that well when they when the first generation immigrants they usually work very hard uh at close to minimum wage jobs and um uh this it's the second generation that sees the hardship and want to want want to push forward. So I think that kind of uh building some driving me and then usually by the third or fourth generation that genet degenerate.
You you mentioned your sister what do you what does she do?
Uh she uh she's also a technologist. Um she uh worked at a startup before in Tokyo and then she worked at Morgan Stanley. She become one of the manag managing directors uh at Morgan Stanley when she was quite young. So there's probably like 400 managing directors globally at Morgan Stanley for like I don't know they had probably have 100,000 people. So she was very successful in her career. Um but she worked she worked at a large company. Um and then she retired at age 42 40 42ish. Uh she had a postnatal depression like after child birth she had a little bit of depression and then she quit. She retired a year later and she's completely fine now. Uh so she helps consult other people who go through depressions now. So yeah. Um yeah.
You said the third or fourth generation becomes degenerate. How do you avoid that happening to your kids or your kids' kids?
I am not sure. Um I don't have a solution for I do not know of a solution that works yet. Um and also I'm not I don't have third I don't have second gener. Well, I I have kids but my kids don't have kids. So um it's a problem that I can kick the can down the road a bit further. So it's a problem like you know I think about once in a while but I don't know what the solution is. Um yeah I think education but it's hard. It's hard. Yeah.
There's a famous video of Jack Ma in his living room in 1999.
Pitching Alibaba to his 17 co-founders.
That's how it all started.
At least in the newspaper already news. There was always a newspaper story. Then then there's a reality.
Yeah. Take me back to the first day of Binance in your living room. If that was there, what would have I seen or heard?
Uh, so Binance started a little bit differently. We had a team uh had a team of about 15 20 people at that time working on a company called BJtech uh that was selling exchange systems to other exchanges. U most 80 90% of our clients are not crypto exchanges. They're like you know traditional what they call culture jade. They tra they trade stamps jade etc. but using order book. Uh I had that team for two years. We were have we had a stable business and then um uh in I think it was in May 2017 I grabbed everyone into a conference room says okay might be well now might be a good time for us to do a cryptoto crypto crypto like exchange. Um and then um uh I said look if we don't do this this is probably an idea that will come back to us again and uh and again and if we don't this if I don't do this in my life I probably will do this now I'll probably do do that sometime in the future too. Um and we I think we got the right ingredients. We had we have this we have the product we have the system we have the team. Uh we're missing a couple things. We're missing the marketing team. Uh we don't have a customer support. Uh uh BJT was a B2B business. So we have sales and we're client account managers but we don't have customer support. So uh yeah so but I I grabbed the team into in the conference room. Everyone said yes uh let's do it. Um and then we we debated about the domain name. I had two choices and then um we've picked Binance and then yeah that that was the moment but it was like a smaller conference was smaller than this room. Yeah.
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If I was the fly on the wall in that conference room, what would have I seen that I would not have seen in other crypto exchanges, conference rooms or offices and that enabled you to go from zero to the largest exchange in the world in six months?
Ah um I don't know about other exchanges but there wasn't there wasn't anything super special. Uh but it was a team that's very hardworking and very down to earth. there's very little. So there's a very little sort of um ego. There's very little um um uh I like it's just a very downto- earthth humble team that's that can execute. So um and we were very we were also very uh synchronized um you know uh most people trust everybody on that team trusted uh me and they were basically follow me to the end of the earth right so we said we said like we're going to do this um I guess it's a little bit of the Asian culture where in the like in the western world you will have a discussion you have to buying everyone have to pitch their uh views in the Asian culture once people follow a leader they kind of follow like almost blindly to the point where you have to it's very hard to solicit feedback for for your ideas sometimes. So the culture is a little bit different but um that culture if you have the right idea they execute very well. If the leader have the wrong idea then they usually it's usually a disaster. So uh uh luckily no we kind of we we got lucky like know we we kind of have the right ideas. Yeah.
What does hardworking mean to you?
Um hardworking means different things for different people but I think just producing results uh being effective is is more important than working long hours. Uh many people working long hours but they don't produce anything. Uh so producing good high quality products that people love uh while working long hours is is really important and usually passionate people they it's not it's not the hours you measure it's how passionate they are and how high quality the result they can generate in a short period of time. But to be able to do that u you need highly pack uh very passionate people and working fairly hard basically long hours which doesn't feel like we're because it's pure passion right that's how people can outwork other people basically yeah yeah so people don't think about in in like especially in the early days even nowadays I think in finance people don't think about the hours they work it's just like if something need this get done sometimes you know they put their kids to bed and like it's 9:00 p.m. They get that they get that thing done before midnight, right? Or sometimes before before Yam. Um it just Yeah, that's that's how you get that's how you get things done. Yeah.
What's the biggest misconception that people have about Binance?
Uh um let me think. Um there's quite there's quite a lot of misconceptions. Um some people think it's a Chinese company. It's not. Um we have a large uh population of Chinese employees. Um, and then some people think uh centralized exchanges um are I don't know bad or evil uh in the industry or we're not like we actually promote decentralization. It's just most people actually today most people in crypto prefer to use a centralized exchange. They prefer to use the email password customer support uh instead of wallet address etc. But I think the future is you know uh decentralized uh so we will invest very heavily in the decentralized ecosystem.
Why do so many Binance listed projects eventually disappoint investors?
I think if you look at any market uh any industry, if you look at by project numbers, the majority of projects will fail, right? If you look at internet, how many inter internet companies were there? Probably millions. Uh and then how many are successful today? Probably like a few dozen. Well, a few hundred maybe, right? Um but the big ones are like know a handful. uh if you look at AI companies, it's going to be the same, right? Most AI companies will fail. Um and uh but the ones that are successful are going to be enormously successful, even the public ones because the difference here with this token is public. Everyone can invest. Therefore, everyone can get burnt. Internet days, not everyone could invest. Uh well, that's AI companies. Well, that's good. That's good and bad.
Would you want to be able to get into Anthropic when they were very small?
Right. So uh so while while this companies while this any new industry uh the majority of companies fail but the industry will usually survive and there's a handful of companies that will survive really well. Um whether investors should be allowed uh to go in early or not that's a separate top that's a separate topic uh that's a separate uh u uh uh factor. Um that's another whole debate. Well, I personally don't believe the uh I actually believe the accredited investor protection like to prevent you from investing early is net uh going to make you poor for everybody, right? So, um to be able to invest early, I think most people if you read many economic books, most people in the US got rich because they were able to access the stock market and they had a good stock market. Um if you take that away, many people will become much poorer today in the US. In many other countries the stock market is not as strong and people invest in those markets don't uh do as well but people many of those people don't have access to the US stock market right so uh so should we de democratize access or should we protect them by blocking them access u that's a debatable I don't know what the right answer is but my philosophy is usually give people access give people education and let people have the opportunity to to decide for themselves yeah that's why we started to do with the tokens and that's what we're doing with tokenization now.
Exactly. Yeah. Yeah. Yeah.
If a project pays market makers, KOLs, launchpads and exchanges, can retail investors ever really win?
Uh I think so. Uh well, the short answer is yes. Uh but there are of obviously little fine uh balances. They're always uh when something like for example advertising you can do it well um you can do really badly. If you like make false promises in your advertising, then of course uh uh uh people get hurt. But between false and truth, uh it's not always black and white, right? You can it's a gradient scale. You can over you can overhype something. You can use wording that are ambiguous that can be misinterpreted. You can do a lot of things kind of in the sort of middle area. Um we of course encourage people to do the proper proper thing. Um so to do the sort of uh the good way. It's like how do you do that? Uh well uh it's u uh well it's I think it's a it's it's a whole combination of things. Um it's um encouraging uh founders to do the right thing. Uh educating users to pick the projects that are good and teaching them how to evaluate projects not just so much on like hype marketing etc but look at the fundamentals etc. and then also like uh regulatory frameworks to about how most countries have like disclosure requirements etc for uh equities for stock markets. Um those things don't exist that much in in in in um in crypto markets yet. Uh so a combination of those things uh uh will be important. Um but overall in the long run people they any new industry there will be some guys who are who can overhype who can over over market and they will get a short-term some of them will get a short-term benefit at the expense of users but in the long run uh those projects will not last uh the the longlasting uh platforms or projects in the space will be the ones that sustain sustain sustainably built solidly. So it's a the market has a self- selection process.
The market decides absolutely.
Can you explain the four meme to my mom?
What do you mean four meme? Like the platform? Uh the four meme? Well, I don't know if your mom understands memes or not. U but I would say look uh there's a group of guys who uh there's a fairly active group of guys who will trade on any token that has any culture or joke or memes behind them. uh the for meme and they will create any meme like well they will look for anything that's kind of funny that kind that has a a little bit of viral growth aspects to it. Um the four meme evolved over time. It actually evolved it um I think it originally the four uh came from a blog post I um a Twitter post expost that I made in 2023 a new year resolution thing. I said um we're going to in the new year I'm going to do less things. I'm going to focus on education, regulatory compliance, and product. And uh I think with three things, three positive things. And then number four is I'm going to ignore FUD like the the the fake news, the the the fake the negative narratives. And then I said in the future if that I see any FUD, I'll just twe I'll just tweet four and then you guys help me explain uh what to do, what what that means. And the community loved it. And of course within 24 hours there was some negative article and I tweeted four and everyone's like you know everyone's very happy about it. Well not happy everyone's kind of jumped in. It was like kind of a trendy thing going on. And then um another another uh community member he u uh speaky he he posted a picture of her four fingers uh him like a selfie with four fingers. I thought that was pretty cool. Everyone kind of liked it. So a couple weeks later I posted one and then u so that made more viral and then um it got slowly evolved and then of course um two years later my memes are hot there's like probably there's a thousand memes with four in there somewhere. Um yeah so that's how you keep so that's how you evolved a long winded answer.
You turned a single digit into one of the most powerful memes in crypto but every founder has scars.
