President Trump, give me a pardon.
Who cares about getting a pardon?
I'm labeled as a felon.
Binance founder sentenced to four months in prison.
You could tell they were interested in targeting a guy like you.
The timing is coincidental. Today, US is pro crypto.
The White House pledged to make America the crypto capital of the world.
You're not making friends with the Democratic Party.
Your tweet was one of the reasons that caused them to go out.
Don't think those were my exact words.
There it is. That's the tweet. He was the biggest guy giving money to them. You just took that money away. Sam Bankman-Fried arrested.
Adam Back is Satoshi Nakamoto. Do you think there's a chance that it's him?
In their eyes, would China look at you as... they made you...
Because I look Chinese, I'm part of the CCP or anything like that. That's completely false.
You make it seem like anybody can start a company and get to 100 billion.
I don't think I've ever sat in a Lambo yet.
Stop it.
Guy's worth $100 million, give or take. Never been in a Lambo. Enjoy today's conversation with the one and only CZ.
CZ, great to have you on the podcast.
Thank you for having me. Pleasure to be here.
I told my guys, I said, 'Listen, I noticed everybody was going in the cigar lunch to meet you.' I said, 'You better not ask him for a loan. You better not go. So, you want a donation or a loan from this guy?' Because the first thing they found, what's his net worth? Is he really worth $110 billion? That's the first thing people want to find out. And you're like, 'Yeah, you know, he's a pretty rich guy.' But it's funny. I got all these things I want to go through with you with your story. I was telling you earlier how your story is a movie. They could turn it into a movie at any time and I hope it turns into a movie because you've lived an interesting life. But did you fly in from UAE?
Okay. Is it true that you guys just got attacked or you got bombed yesterday by Iran at a couple oil facilities?
I don't know where they attacked, but as we were leaving, there were missile alerts and the flight was on, off, on, off.
When we were leaving. Yeah. So just on my way to the airport, the flight was off and then 20 minutes later the missile warning was cancelled, well, was resolved, it was on again and then it was off again and on again. And then yeah, so that's how we fly and we wait. So just before we were supposed to take off, there was off again. We said, well, let's just wait for 20 minutes. It was, yeah, so and then we had a 20-minute window, the plane...
What did the pilot say? The pilot say, 'Hey, we don't know,' are they given a safety protocol or no? 'Hey, we're going to take off, it's going to be fine. It's going to be a long flight. We're going to be okay. There's going to be a little bit of turbulence.' What warning did the pilot give?
So, the pilot's just waiting for the... the pilot's just following instructions. So, whenever there's a warning, they cuddle everything into a safe room that's like in the middle of the airport away from glasses, windows, and stuff like that. And whenever the warning is off, you say, 'Well, you can board the plane.' And then you fly off. And it was actually no turbulence. It was a calm day.
Turbulence. It was a calm day.
Did you, were you worried while you're taking off or no, you were... you... I wasn't worried.
So, like 99% interception rate. And super safe. Yeah, it is worrying because that missile flying in, but it's super safe.
So the living there yourself, you feel safe living in UAE in Abu Dhabi. You do?
When you think about all the things that you can't... you can buy with money. You can go to a restaurant, the waitress doesn't give you good service, you can buy the restaurant and say, 'You're no longer here.' You have that kind of money. You can go to a sports game, you don't like the team's management, you can make a massive offer the next day and buy an NBA team or an NFL team. But when it comes down to security, living at a place, what made you pick UAE out of all the places to live in?
I mean, it is the safest country in... well, safest country in the world.
You can... if you drop your wallet on the street and it has like, I don't know, 3,000 bucks in there, you walk, you come back in a week, it's still there. You'll find it and people who find it will return it with the cash in there. There's basically zero crime. There's no petty crime, no big crimes, etc. And the physical security on the street translates into financial security, fintech. It's just very well run. And also the leadership of the country is very pro business, very smart, very calibrated, extremely visionary. So it's one of the best places to be. Yeah.
Do you think about the importance of... what level of importance do you put on where to raise your family on the strength of the military of that country in today's turbulent times that we have? Do you say, 'Man, I wish UAE had a stronger military' or no?
Well, I think I was actually surprised at how strong the military of UAE is. I didn't know until there were like missiles flying in and they were intercepting it. I was like, wow, that's pretty cool. And I didn't... like you have to think about it, right? How much do you have to prepare that in advance to be able to intercept that many missiles coming in? It takes years and years of preparation. So there's foresight there that's really hard to match. I think UAE does rely very heavily on US support from... based... from military equipment, technology.
They rely on us for that.
I think so. Yeah. So they're a very strong partner for the US. So I think they do quite well there. And then, but other than that, I think the country is very well governed. If you have sensible leaders, you have like smart leaders that are fair and that want the country to grow instead of growing their own pockets, then you have a pretty good country. Yeah.
I saw a stat the other day and I wonder how you answered this one. In the 70s, in the S&P 500, it showed that 85 to 93% of the wealth was tied to tangible assets in 1970.
So if somebody was a billionaire and they lived in a state, they ran a business, they couldn't move to another state or they couldn't move to another country because it's tangible asset wealth that they have. Today we've gone from 85 to 93% back in the days to now it's the other way around, 92% is in intangible assets.
Patents, you know, brands, you know, Bitcoin, crypto, AI, all this stuff that they're building.
Moving forward, do you think this is going to be a threat to countries that don't know how to handle small business owners or big businesses? That person can say, 'Great, I'm gonna go move in UAE, I'm gonna go to Singapore.' How do you view that with how much of the wealth today is tangible instead of intangible?
I think that's a great point. I agree with you 100%, which is right now if you look at the wealth today, it's IP, it's technology, it's crypto. They have no borders. Even with like IP and technology, there's some country limitations, right? So if you run an IT, like say AI, you're running in US or you're running in China, you're still kind of confined to those countries. Whereas in blockchain, in our industry, crypto, there's no borders. Your Bitcoin is yours no matter where you are. You fly to a different country, you don't have to even make a transfer, that crypto stays with you, right? And also technology startups. We're seeing a lot of technology companies amassing very high valuations and those are the big drivers for economies of countries and the world that can be based anywhere. So, and this is good and bad. So now countries with favorable regulations, with good leadership, good regulations, good environments will attract this top talent. And talents are very mobile now, like you get educated in one country, you can move to a different country very easily and you learn your skill, you know, you can also work remotely. For like, Binance has remote work, 5,000 people working remotely. So all of this are possible now.
In how many countries the 5,000?
I don't really know for sure, but more than 100 countries, I would say.
You have 5,000 employees working for Binance.
In 100 plus countries, everyone's remote?
Pretty much everyone's remote. So, I don't run Binance anymore, but no, this stat is pretty public.
You still own 90% of it, though.
No, actually I'm a large shareholder, but not 90%. So, quite a bit less than that.
But you still have majority control, though. You're above 50.
I'm the single largest shareholder. So...
Okay, got it. So, even though after all this, which we'll get into, even though all that stuff happened, they said you couldn't be CEO. Still as a majority shareholder, do you still carry a lot of influence?
I think influence, yes, but I don't run the company. I don't try to... I don't give them instructions. But you know, my shareholder rights are intact. So I'm a shareholder. So I get shareholder information. Yeah.
Yeah. That's pretty wild. So 5,000 employees, 100 plus countries. You know, you're a thinker. When I watch you in interviews and things you say, I've watched you with Peter Schiff debate on the way you brought the kilo of gold. You're like, 'Here, here, let's split it.' You're trying to kind of make the point of the difference between traveling, airport. Why live in UAE? Why not live in America? Why not, you know, from the outside yourself? Because America's always been known as the land of all opportunities, you know, the place to be for entrepreneurs. Do you as an outsider, you're not an insider, do you view America as the greatest country to live in today moving forward as an entrepreneur?
Okay, I'll give you a very blunt answer. I think since the last one year and a half, I think America is probably back to the best country to... one of the best countries to live in. But during the Biden administration, it was one of the worst places to live in. I think I basically just tried to stay as far away from US as possible during that time. They were very hostile on crypto. They were very hostile on our industry. So, I just wanted to stay as far away as possible. So, it was not possible to run a crypto business in America before. I think now it's more possible. So I think in the last year and a half we're seeing the... we're seeing 180 degree reversal, which is great for the US economy, I think.
Now would you consider ever coming down here and living here or no, you're happy in UAE?
I think right now my lifestyle's pretty set up and it's not easy getting US passports, etc. So I'm pretty content where I am, but I think we will definitely want to do more business and invest more in the US.
So, if I'm a friend of yours, I know and I know you do some mentoring as well for some of the founders that you work with, and if I ask you, I said, 'Look, I got a bunch of different places to live in in crypto space. Should I go build my hub out of America or should I build it outside of America?' What advice would you give me?
I think today I would say definitely do have a presence in America, but you may want multiple presences because the crypto regulations today are country specific. US regulations doesn't service the rest of the whole world actually. I think UAE is actually one of the very few places that offer global crypto licenses for crypto exchanges, right? So and that's fairly new as well. So we're still at the early stages of this regulatory frameworks in different countries and US I think is progressing extremely well, extremely quickly. I think there was some progress on Clarity Act even last night. And so, but I think yeah, US is definitely one of the places to be, but I wouldn't say... I always have a global view on business. I wouldn't focus on only one country. I think we're living, as we said before, we're living in a world where the country borders are much fuzzier in terms of technology, in terms of digital assets. So have a global view instead of... we no longer need to do business in one country then expand to another country then expand to another country. We can... you can do parallel progress.
So even if you did get a passport to come down here, you would still choose US, UAE today?
I think today my life is pretty set up in the UAE right now. I would probably just stay there. Yeah.
I wonder again, the whole point with me is do countries realize what's going to happen to the future of these wealthy entrepreneurs who their assets are intangible, that they can no longer bully them with regulation because they got 200 other countries that would love to have them. Maybe not all 200 of them. Let's just say a hundred of them they can go to have a decent life and then 10 countries that are very competitive for business. Say UAE, Singapore, some of these countries you can go to. I wonder if as bad as it is today, we see reports of people leaving California with the whole wealth tax. I don't know if you're following that closely or not. And we see what they're talking about in New York and a trillion dollars left New York and California during COVID. California just lost another trillion dollars and their net migration rate report came out that they're even losing more people now and they want to offer this 5% tax, billionaire tax on the couple hundred people that I have there. I wonder if they're going to realize how horrible of a move this is long term because you can go anywhere today. I wonder if they'll figure that part out. What do you think?
Well, what I hear is a lot of companies are moving into taxes in the US, right? I don't know the details, but generally at a high level, I think high taxes doesn't work that well. When you impose high taxes or high transaction fees or just generally high cost for doing business, a business move away. Basically, you're taxing on a much smaller volume. You actually get less net tax, I think, or less net fees or income or revenue, however you call it. The concept is about the same. And as you said, now the 200 countries, they're kind of actually competing for favorable regulations for businesses, favorable environments for businesses. So yeah, I do think that that consideration is definitely in play. So it's not like, you know, the business won't move and you can just tax the hell out of them. When you increase tax from like, I don't know, from 1% to 10%...
Yeah. You might have less tax income. Yeah. It's not that straightforward.
Being close to Iran. What is your opinion on what's going on with Iran?
Well, I didn't follow geopolitics that closely before. I'm just like a business guy doing crypto, etc. But after the war started, I'm really not... well, I live in a country that was attacked by Iran. UAE did not initiate any attack and even... and UAE was the most missile attacks from Iran out of all countries. I think it's just because of the physical proximity because they're just across the water. But even being attacked, being the most attacked, they didn't retaliate, right? So UAE held back, they probably could, but they didn't. This goes to the wisdom of the country leadership, but living there, seeing missiles flying overhead can't make me support Iran, right? So, yeah, so I'm against all wars. And also, based on my limited understanding, the fact that Iran hit every country in the Gulf is a bit crazy. I wish the war will stop soon. I wish people come to the... to the census. And also, based on what I'm reading, it's just like there's no leadership there, right? There's no leadership in Iran. It's very chaotic. I really wish, you know, we can help put... or like somebody puts order in there and then people can move on to build businesses.
You think it's unified the Gulf States like against Iran?
I'm not too sure. I'm not an expert on this topic, but it doesn't seem to be super unified. I think everyone have different opinions, right? We see UAE, like, withdraw from OPEC, which is pretty significant and also which is pretty strategic. So there's some... I wouldn't say everything's aligned. You have multiple countries, you have multiple personalities, you have multiple people involved. It's a dynamic environment. Again, I'm not an expert on this kind of...
No, I asked that because if you're also not a regular guy though, you know, you have a lot of money, you have a lot of influence, you build one of the fastest growing companies to billion dollars. At the time it was the fastest. The total amount of money transactions that's been done in Binance, I saw $125 trillion dollars. I think I saw a number like that. So, it's not like you founded just a regular company. It's a big company with a lot of influence and compliance. And I know when you're saying not all the Gulf States, UAE, Saudi, Saudi dictates prices for oil. So, they're probably not happy that UAE left and Qatar left in 2019. I was just wondering what your opinion would be on that because safety matters at this phase. So going back to it, your story, fascinating story, you know, before everybody learned about you with Binance at the time. I think you guys went from zero to billion the fastest out of any other company that we had and then reports came out. You on Twitter, you have a massive following when it comes on to Bitcoin, the comments you've made, the stories of you selling your house for $900,000, all of that. But for some of the audience that maybe doesn't know before you became the business tycoon that you are today, how does the story begin?
Well, we trace back, right? I was born in a fairly rural village in China. I grew up there, moved to a city when I was 10 and then moved to Canada when I was 12 and then I did high school there. I did high school in Vancouver and then started college in Montreal in McGill. Didn't graduate there. I went, did four years and then my intern boss gave me a job. Then I delayed and delayed and I never went back to McGill. I started working and then I worked in Tokyo, New York, Shanghai, and then where else? Singapore. So I started as an IT guy and then turned into an entrepreneur. I worked in New York in Bloomberg. And so I was always in the sort of fintech field. And then I started a company, I was a junior partner of an IT company. I started a company with six other older guys in Shanghai in 2005. Did that for eight years and then I came across Bitcoin in 2013. And then I was like, this is the future technology. So at that time it was actually pretty interesting because I think there's three big technologies in my life. There's internet, there's blockchain, and at the time I didn't know what was next, right? At the time I thought the next one was going to be like 10, 15 years later. Now we know it's AI. So I think this is the three big technologies in my life. When the internet was happening, I was too young to really do anything meaningful with it. When blockchain is happening, we know we got lucky, we founded a platform that's impactful, that's useful. And then so yeah, that's kind of how I came to be, yeah.
If I was in high school with you, say you're 14, 15 years old, who were you in high school? We're in a class together, who's CZ?
I was a normal kid. I was a big geeky... I played a lot of sports. And I was like, you know, Asian kid in Canada that played volleyball, that just normal kid, nothing... I wasn't super smart, I wasn't the best in any academics. I was pretty decent in math and science, a bit weaker on the literature, like, you know, English, French. I was very, very bad in French. Yeah, so but I was a normal kid, yeah.
Did people... did you know you're going to do something special? Like was there something where like one day I'm... were you a driven kid or...
No, no, no. It was not... like there was no indications I was anything special. I was just a normal kid. Yeah. There was never any indications, 'Oh, this guy's going to build a, you know, billion dollar company,' even.
Were you a dreamer? Would you dream about one day, you know, I'm going to do this, make my family proud. Was there any thoughts like that with you?
No, I didn't have any of the... I wanted to be successful. I wanted to do well, but I never dreamed of being a billionaire or like, you know, run a largest crypto exchange, like that's just never... I just wanted to, you know, have a... I want to be financially successful. I want to have a successful career. I want to build a good life. I want to... I always worked hard. So but it was like I wasn't dreaming like, no, I want to be the worst... I don't know, whatever ranking, that's not...
That wasn't you. Yeah. So, I don't know if you read the book Accidental Millionaire. It was a book written about Apple, about Steve Jobs and Steve Wozniak. It was I think it's a former employee that wrote it, it's a little bit of a disgruntled guy that was saying bad things about him. There's a different copy of it. If you go to accidental millionaire and you put Apple, just go to images, you'll see which one it is. Apple. That's the one right there. Then they wrote a book called The Accidental Billionaire. Yeah, if you notice, it's only got 11 reviews. This came out in '87. It's actually a very good book for somebody in the space. Lee Butcher was actually a very good book I read. Then the book came out called an Accidental Billionaire and that was written I think about Mark Zuckerberg who, you know, he became a billionaire and I don't know what they call it. What's a 100 is what? Centi is a hecta is 10.
Centi, right, so you're an accidental centi-millionaire.
I'm not sure I'm centi, to be honest. I think the Forbes estimates are a bit off. They're too high. Okay. Yeah. But yeah, kind of accidental. Yeah.
And how did it happen when you... because I know the story when you sold your property? If you want to share that story when you sold the property and you bought all Bitcoin, what got you to the point of saying I have to be able to get into Bitcoin.
I started learning about Bitcoin in 2013, right? And at the time I was like what, 36, 37. And then I was like, okay, this is the future technology. This is bigger than the internet. And when the internet was happening, I was too young. So, I was at 36, 37ish, I wasn't going to let this opportunity pass by. So I said, look, I just got to get involved in this new technology field. I don't know what I'm going to do first. I don't know what I'm going to do yet, but I'm going to buy bitcoins first. So I sold my house, sold my apartment, and bought Bitcoin. So that was like pretty clear to me. That was a very long-term conviction.
What did you... Is this a $900,000 apartment?
Yes, this is a $900,000 apartment.
And when you bought it at the time, what was the average price of Bitcoin?
Average price I got in was about 600. I bought it, I got payments in installments, right? So I bought it at 800, 600, 400. So average.
So if we do 900,000 divided by 600 times 81,000, you're looking at $121 million, give or take something.
Yeah. Just... yeah. About 100 million.
Selling a $900,000 apartment turn into $121 million.
The average person listening to this thinks that's crazy, but what made you say this is what I'm going to be doing? That's a pretty bold decision to make. That's a big risk to make.
Well, number one is I saw the clear future of the technology. I don't know what it's going to be like exactly, but I know it's going to grow.
What made you say that? What made you... is it a paper? Is it a white paper you read? Is it someone's paper you read or...
Back then there was much less materials about it. There was white paper that I read. There was a forum called bitcointalk.org that I spent a lot of time on and then going to conferences, meeting the people, the community made a huge difference. And also doing the first transaction with Bitcoin when you install your own Bitcoin wallet and you realize, well, wait a second, this is a network, I can send money to anyone, full control, there's no bank involved, there's no other fees involved, it's instantaneous. So once you realize that, it's like, this is a technology for the future. Not only did I just sell the apartment, I quit my job to look for a new job in this industry, right? So most people will say like, no, those two combined are pretty high risk, but I think as I detailed in the book, risk is not based on the action, it's based on your individual circumstance. For me, my risk tolerance at the time was high because I know I can get a job if like Bitcoin went to zero, I can get a job in a bank, I can get a job on Wall Street again.
That confidence came from what, your just pure skill set and knowledge?
Yeah, yeah. So I learned about Bitcoin in 2013. Between 2001, 2005, I was working in Bloomberg in New York. And so I was doing entrepreneurship for eight years afterwards. I thought my experience and everything else have increased. My value should have increased.
At the time when you sold your apartment and you quit your job, how much did you have in liquid cash? Did you have some money or not?
Not very much because I put most of my cash into the company that was working before and the rest the cash was in the apartment. Less than half a million bucks.
Oh, way less. Actually probably much less. The apartment money was pretty much all I had.
The reason why I say this is it's not like that was a... you made the decision because you had a couple million dollars in a bank from a previous exit. No, you're not rich at this time.
No. No. No. Yeah. Okay. Yeah. So, that's a risky decision right there. But you trusted your ability on the way to work and the skill set that you had and the knowledge that you had.
Yeah. Yeah. So, I didn't need the 900,000 to maintain my lifestyle. I can work for income that will maintain my life.
And you were a minimalist even at that time.
Yeah. I wouldn't call myself a minimalist. I'm just pretty basic, right? So I wouldn't like... if you look at my table, it's got all kind of camera gadgets. I wouldn't like minimal, like very clean. That's how I think of minimalist. I'm just a normal basic guy.
I don't do anything fancy.
So when you found out Bitcoin, was it like a 3:00 in the morning aha moment? You're calling your friend, 'Wake up John, I got to tell you something, and we're going to do something special.' Did you have a moment like that or was it gradual?
Well, a friend told me, a friend Ron Tal told me about Bitcoin over a poker game. It was a very friendly poker game and then afterwards I spoke to another friend who... his name is Bobby Lee. He was just about to join...
Yeah, he was just about to join BTC China, which is at the time...
Not the comedian Bobby Lee.
No. Different, different... not...
When I think about Bobby Lee, all I think about is Bobby the whole... the old bomb thing.
Not this guy, not this guy. Yeah. Yeah. But yeah, so there was a couple friends who were like, who were around me. They were getting pretty serious into Bitcoin. I was like, 'Okay, let me learn about this a little bit more.' Yeah.
And so from there, is it, you know, inviting friends over, 'Guys, we're going to go do this. We're going to go do that.' Or no, it was more 'I got to go find a company to work for' at the time.
At first I spoke to a bunch of guys. We tried to do a few different businesses, like basically like, 'Let's do this and that.' I talked to a couple friends in Taiwan who used to work for TSMC, the Taiwan semiconductor...
Manufacturer. Yeah. Right. Basically all the Nvidia chips, all the AI chips, 80% of the world chips are manufactured there. We wanted to do a Bitcoin mining chip or mining machine, but that didn't materialize. It involves a lot of logistics which are not my specialty.
How close did you guys get to executing that?
Not very close. We discussed business concepts. We had like maybe even a business plan but we didn't pull the trigger. I did a couple like... Bitcoin ATM machines. I actually sold a couple, but that also didn't grow. And then I said, okay, well instead of trying to do a startup, let me try to work for a company first. And I bumped into a few guys at Blockchain.info and then I joined them for like a few months.
Big company, small company, startup?
Very small company. I joined as a third person there.
And who were the... were they players? The other two guys, were they players in the Bitcoin space?
Well, the founder... yeah. The founder is a 20-year-old kid who wrote a website that attracted 20 million users.
Wow. At the time he was 20?
At the time he was 21, 22. Yeah.
And how old were you at the time?
I was like 30... I was 36, 37.
So 36, 37 year old goes works for a 20 year old to build a website with 20 million users.
Well, he already built the website. I was just helping him really. Yeah, so...
Did you go in as an equity position player or no? Just a regular person?
No, I joined without much equity. I have an earnout to earn the equity but I didn't stay that long. I only... I didn't stay more than a year. So I didn't have...
Did he end up becoming a major player? Like is he a known guy in Bitcoin today?
No, become very successful or... no, his name is Ben Reeves. He's the founder of the company but he sold his shares later on. For at least a few million, probably double digit millions, but then he's a very low-key introvert so he stayed out of sight.
Yeah. Got it. Ben Reeves.
Is that part of blockchain.com or...
They I think they later renamed to blockchain.com. Yeah. This page doesn't talk about Ben Reeves, but Ben Reeves is a true founder. Oh, yeah. Yeah. So...
Benjamin Reeves, Peter Smith and Benjamin Reeves. Got it. So, what did you learn from what he did? So, now you're working there. What did Ben do? Because you're not there for too long.
I was there for eight months.
And during that eight months, was it an accelerated learning curve of finding out everything with Bitcoin?
I learned a lot actually. Number one is the community is very dynamic. So this guy Ben Reeves, his only marketing was based on one thread on bitcointalk.org, which is a bulletin for, like a virtual bulletin forum.
That's what brought 20 million people.
Yeah. And then also Blockchain.info at the time didn't have a company. They don't use bank accounts. They don't have an office. They pay everybody in Bitcoin. They pay all the... when we grown to like 18 people, we just... the company just pay every month send some Bitcoin to all the employees and it's up to them to how they handle those bitcoins. They didn't have an office. They didn't even have the company back then. So it's just like 18 people working together. Well, and they're still growing. So I learned a lot of different stuff about blockchain, about crypto during that time.
Yeah. Got it. So the whole idea of not having a headquarters kind of come from the experience here that you don't need it.
That definitely contributed to... like when early on in Binance I said, look, we don't need a headquarter. We can pay everybody in crypto. Yeah.
Got it. So then from there eight months later what do you do next?
I actually joined a Bitcoin exchange in China, OKCoin at that time and then I learned a bit about like how exchanges operate. Exchanges were actually much closer to what I know best. I've been dealing with trading systems quite a lot. So yeah, so actually he hired me into OKCoin. Yeah.
So that's OKX and then how long are you there with them?
I was there also just under a year. Under a year.
Yeah. So yeah. So this turned into a big company. They got 5,000 plus employees. This is San Jose, Cal. How big of a company is this?
I think there are about two to three thousand people. Maybe 5,000. I don't know. I haven't... but they're still around. They're a decent size exchange. They're probably about... I would imagine like about 10 times smaller than Binance.
10 times smaller than Binance.
I saw the numbers, even Coinbase is what, a third of your size.
Depending on how you calculate by trading volume, they're much, much less than that. But by Bitcoin reserves, they're probably about a... I actually don't know the numbers on top of my head anymore. By Bitcoin reserves, Coinbase has a decent Bitcoin reserves. They started early.
Got it. So, from that company you go to... from China. How much longer after that do you start Binance?
So, I left that company, it took me another... I left that company in 2015 and it was two years later in 2017 I launched Binance.
So at this point when you're leaving and you're working at these different companies, what is... are you sitting there saying, 'I'm eventually going to start something'? I'm eventually going to start something or that's not even on your mind right now.
So in 2015, I said, look, I'm going to do my own startup, right? So I actually wanted to do a Bitcoin exchange. Basically, very similar to what Binance is. But then the team I assembled, we only had tech guys. And we don't have a marketing team. And I wanted to do a Bitcoin exchange in Japan and none of us spoke Japanese. So I tried to raise money from VC investors and they said like, no, there's no way you can do this Bitcoin exchange thing, but you can provide the technology for Bitcoin exchanges. So we pivoted to a technology company providing exchange systems to other exchanges and we did that for two years. And then it was 2017, we said, well, there might be a chance that we can pivot to running a Bitcoin exchange ourselves. So 2015 we tried to do a Bitcoin exchange but we were not quite ready.
Pre-17, are you a known player in the crypto world and the Bitcoin world?
I think I had a bit of a reputation by 2017 because back then...
What would people say about you who was CZ pre-starting Binance? Like if somebody came up, like right now we talk about Ben Reeves, if somebody said, 'Hey, CZ in 2017 pre-Binance,' what would they say about CZ?
They'll probably say like, CZ is a technology guy, been involved in the crypto industry relatively early, and worked, you know, being a fairly senior position in a wallet company, senior position in an exchange company, and then built his own business as a technology exchange service systems technology company. That's probably what people would say, yeah.
Okay, and so from there now you have a reputation, are you at a point that if you start something people want to work with you?
So now you start Binance. Yeah. When you start Binance, what were some of the big early meetings you guys had? Like, do you think about the meeting that everybody has seen with Jack when he's doing Alibaba and he's there with, you know, five, six, seven guys. I'm sure you've seen this video. It's not black and white but it's old video where you can tell it's not a... did you have a meeting like that where you said, 'Guys, here's what we're building'?
Oh yeah, yeah, yeah, we had a meeting like that. We said, look, we're going to... let's build this thing called a crypto exchange, right? And pull the guys into a room and says this is what we're going to build. And I told him, look, I've been for the last, I don't know, 17 years in my career I've always been working on exchange systems and now I think this is the time to build it. If I don't do this, I'm going to keep thinking about this for the rest of my life, right? So if I don't do this today, I might try again two years, five years, 10 years later. So, it's something that we have to do sooner or later. And now might just be the right time to give it a shot. None of the other people objected. Everyone's like, 'Yeah, let's go.'
So, nobody's like, 'I don't know, CZ, whether you're going to be able to pull this off.' Nobody doubted you.
On my team, nobody doubted. Everyone's just, 'Okay, sounds good. Let's go for it.' But when I try to raise money from VCs, no one invested. Like, everyone's like, 'No, no, the exchange space is too crowded.' There's too many exchanges out there already. You can't do it.
Um, so that's the VC investors. And then we did an ICO, initial coin offering.
And then everyone wants to buy the ICO.
This is the $15 million or something.
Yeah, this is the $15 million ICO. It was like... so it was like a stark contrast. So...
And it's $15 million. Am I correct when I say it gave 4,100x return?
Uh, yeah. Yeah, pretty much. Yeah. Yeah. So...
So if somebody would have put a dollar, it's worth 4,300. If somebody would have put $1,000 into it, 4,100x would be what? $400,000, $4.1 million.
Yeah. Yeah. Yeah. And even more like depending on the BNB price at different times. Yeah. Yeah. But at the time it was just crazy because we had a white paper and people were willing to give us $15 million for about half of the total supply of the coins.
Did anybody give money that was a player where you're like, 'Oh, wow. That guy is willing to give us money.' Was there any players that got in?
Who were some of the big names?
Well, they're all crypto guys, right? So, this guy, his name is Shen. He runs... what's his company name? Invictus. He did a couple different companies I think.
He was in China at the time.
He was in China. Okay, got it.
And so when I asked him, he just told me... he just told me that, 'No, CZ, I'll give you this much money.' This is before he read the paper. This is before he read anything. He just said, 'Oh, CZ, you're going to do a project. I'm going to support you.' I think he sent me, I want to say like a hundred ETH, at the time was... I don't know, I forgot the price but you know, he gave me like a couple hundred thousand just...
That's pretty wild. So you... people have your back. People are believing what you're going to be doing. They're sitting there, you know, they're believers of what CZ is going to be doing. At what point was it when you're like, 'Guys, this thing's off to the races. We built something special.' When did that happen?
I think it was about a month after launch. So we launched in July 14th, 2017. A month after launch we were like, we were growing. The first three weeks the BNB price was actually underwater, was below the ICO price. So that was like high pressure period. And then about a month later, but a week... the next week, BNB price went 29x. Right, this is like 2900% in one week.
2900% in one week. In one week. In the fourth week. And then that's when I... okay, this thing might work if it stays. And also we look at our user growth on the platform, the users were growing like this, so they were real users with real trading. And then it was about... I forgot, it was like maybe two months, three months in, I asked our finance, like, you know, how are we doing financially? The guy said, well, we're making a couple hundred bitcoins. Like, I thought that number was wrong. I was like, there's no way we're making that kind of fees.
Couple hundred bitcoins back then, Bitcoin were maybe like $3,000 or not like $100,000 today. Well, not like $70, $80,000 today.
But yeah, it was like a couple hundred bitcoins on revenue. I was like, there's no way that's correct. And so we double checked the numbers. We're like, okay, then we got this correct. Well, then we probably got a viable business.
No, no, no, not a day. Like over a period of time.
Over that few weeks that you're talking about?
Yeah. Over like maybe one or two months. I don't... yeah.
And you know in your mind that's a lot at that point like things are starting to pick up for us. $600,000, right? 200 bitcoins at $3,000. Am I saying it correctly? $600,000. Yeah.
So things started growing and then how long did it take you guys until you got the billion dollar valuation?
It took... so we... I don't know when the valuations, but we probably... we are one of the fastest companies to reach $1 billion in profits. I think that took about a year.
Not rev. Not rev. So it's profits. Yeah. Well, at the time profits, rev is pretty similar.
Because your margins are so...
Because our team is small. Our cost is low. At that time our team is very small and so yeah, so that's about a year, a year.
So at that time who are the major... who are the top five biggest players in crypto, Bitcoin in 2017, 2018?
Yeah, there was Poloniex which was the biggest and then later on Bitfinex became the biggest by the time we launched. Who else? Coinbase was up there but not the biggest. There was a Bitflyer in Japan who was like pretty big, the biggest for a while. Bitfinex was the biggest for a while too. Who else? Those were kind of like the...
three or four players.
Got it. So a billion dollars in profits. Did you yet sense that you're making enemies or no? Everybody's good with you guys. You're not getting weird phone calls. People are not upset at you. Other people are not experiencing envy. Or did you start experiencing enemies?
We started experiencing jealousy even from day one. Even before, just from day one we launched, people were like competitors, other exchanges were somewhat hostile, but that's just competition, right? So that's just business competition.
Some of them are a little bit, you know, borderline, right? So there's a lot of smear articles that are sponsored by our competitors, which is great for us because we're a new platform. We couldn't afford the advertising money and they were talking about us. So yeah, there has been like, you know, attacks, what we call FUD, fear, uncertainty, and doubt, basically false news, from even from day one. But I thought that was just business competition. The regulatory scrutiny came much later. The regulatory screening came like 2020, like three, four years later. Yeah.
The year one where you're going zero to a billion in profits and you guys are getting, oh my god, we got 200 bitcoins. What are you talking about that? What does your schedule look like year one?
Oh, that was the year one was crazy.
Give me the schedule. What does it look like? What are you doing?
I basically will go home to sleep from like 2:00 a.m. to about 6:00 a.m. Like that's returning home and leaving home, right? So that's shower and sleep in between. And then I will probably take a nap in the office like around 2 to 3:00 p.m. somewhere around there, depending on what meetings we have. And the team probably did the same, very similar stuff for like basically a year. The whole team was in the office the whole time. The office is very loud, it's just buzzing with energy, just people yelling over each other. It's like a flea market. So yeah, that was like the first year and it was just constant issues, constant stuff happening. Yeah.
Actually, some part of me do. There's a feeling that people really miss. It's like fighting in the trenches with your comrades, with your teammates. That's a very rewarding feeling. It's a very strong social connection. But honestly, I don't think my body can handle it now. Right.
When you tell the story and you go through a phase like that, the average person, they won't believe it when you tell them the story.
Oh yeah. Yeah. Most people cannot imagine how hard we work.
Were you ever hospitalized for anxiety, for exhaustion? Were you ever experiencing like dehydration where you had to go and get yourself IV?
No, I have not. But other people on our team have.
Yeah. Other people on our team. So I tell people like entrepreneurship is a physically demanding activity. It's not just mental, it's a physically demanding activity. Our CTO still uses eye drops from today. From those days he got an eye infection. He had to use eye drops. He still uses that till today. So he's still there. He's no longer CTO now, but he's still there. He's one of the co-founders.
Who the original people that were there, is it fair to say they're all financially successful beyond wildest imagination? They all are successful. They're all and you guys are all friends still. You guys have relationships together. That's a beautiful thing about building something like that.
And 80% of the co-founders are still with the company. I'm actually one of the person that, you know, back... and yeah, and also even the people who left were friends. So my co-founders made money. So there's a saying, especially in the Chinese communities, that I have been a pretty good leader, that I treated my people well.
And by the way, would you consider yourself Chinese? Like if somebody asks you nationality, would you say I'm Chinese?
No, I think I'm definitely like, so I'm Chinese, right? By blood. But my thinking, my way of doing business, my mental process is much, much more Canadian, US even.
Yeah. Like I think my English accent is more US centric even though it may not be perfect. But the way I think and I do business is much more US capitalist, western ideology, freedom driven, etc. Yeah.
So let's go back to Binance. So you're at a billion. You're starting to get some articles being written about you. You're getting some enemies coming to you. At this point has Sam Bankman-Fried started anything or nothing yet?
No. No. He started way later. He started 200... Earliest I met him was January 2019. Yeah.
So you start 17. You don't meet him till 19.
And does he have a name in the market? Like do people know who he is or nothing yet?
No. When I met him, I didn't know who he was. Our client manager tells me Alameda was a pretty decent trader or pretty big trader on Binance. Like okay, who's Alameda? Okay, I'll go shake his hand.
Got it. And that was Alameda was him.
Okay. So in the market now by 2020, who is Binance by 2020?
By 2020, Binance has been the biggest crypto exchange for more than three years. So, people just view Binance as the largest crypto exchange.
So, but at that point, back to back to back, you're King Kong of the space.
I wouldn't say King Kong, we have the largest... Well, Binance was the largest centralized exchange. But there's decentralized, there's blockchains, there's other things, there's stable coins, there's other businesses in the ecosystem.
The criticism that some people give is, and I wonder, of course it's a strategy when it's the zero fee strategy that you had. How did you guys, what was your thinking behind that? What prompted you to say we're not going to charge a fee? Here's how our approach is going to be and the market's going to react to it. How did that idea come about?
I think it's a very simple business idea where you want to provide a large amount of value and you only want to realize a small portion of it. So you want to provide a value of 10 and hopefully only take five for yourself. If you can do that consistently, people will do a lot of business with you. Your customers will come to you and you will grow quickly.
Why didn't others do it? If it's such a simple thing, why didn't the other guys do it?
I think a lot of people have in their heads that they want to maximize their cut on each transaction. What you want to do is actually you want to minimize your cut on each transaction and you want to increase the number of transactions that you multiply the scale. Many people just can't handle it. Many people just want to, like, I want to take the maximum that's possible, that's ours. But for example, if you look at some of the largest businesses, Google makes fees on advertising but they provide a lot of free infrastructure in the internet space. The time clock that we use is probably synced by a Google time server and that's completely free. The DNS services are completely free. So they provide a lot of infrastructure to run the internet completely free. They just make money from advertising. And now the ads coverage is more spread across different products. But for years they only advertised on search, like Gmail was no ads, Google Maps was no ads for years, right? So but they were able to make enough money to sustain themselves. We had the same, we were in a very fortunate situation where our revenues from a small amount of business from a few businesses was able to sustain us to provide more free services to everyone so that we can grow the industry, we can grow the crypto industry. So if you provide a value of 10 and you charge only two and you can sustain yourself and you can scale, your business will grow really fast. So many people don't realize that you actually want to charge the minimum fee, minimum cut so that you are sustainable and hopefully you can scale. If you can do that you'll make way more money than you charge eight or nine.
So where's the real money made with Binance?
Trading fees actually, trading fees.
Just trading fees, like trading when people trade we charge a small commission or Binance charges a small commission. That's yeah.
Comparable to others, how much lower are you compared to others? I think compared to some, especially some of the US players, we're probably 20x lower.
Yeah. Yeah. So in some places. So yeah. We provide the, we probably have the lowest fees in the non-US markets. We don't have access to the US markets yet. Yeah.
Got it. So 20 times less than competitors. So that got the world to come to you. So then you have volume. Did other people try to replicate that model as well?
People do. People try. Yeah.
To make it a zero fee, like a very low fee.
People try. People even try to compensate, like pay users to trade on them. People tried all kind of different models.
Has anybody succeeded as wildly as you guys did coming out?
No. I would say no. The fees is important. Fees is one part. There's other parts like how you protect users, how good is customer service, how well you do things overall, how good is your technology. There's multiple things in play but fees is important I think.
So can you give me some numbers because when I look at the numbers that I pulled up with what you guys have done, some of these numbers are wild when you look at the stats. So lifetime trading volume $125 trillion. Total users, registered users globally, 280 to 300 million registered users. At peak, you held 70% of market share during zero fee promotions. Closest competitor by bid only 8% of market share. Revenue estimate 16 billion to 20 billion in 2024, 2025, two and a half times Coinbase. I mean I can go through a lot of these numbers. It's insane what some of the things at peak promotions 85% of the total weekly volume was zero fee, market share skyrocketed from 50 to 70% when you announced the zero fee Bitcoin trading on July of 2022. Some of these numbers are staggering. At what point were you, when did the company's valuation hit 100 billion?
Oh, actually I don't even know what, I'm not sure if that happened yet.
What was the biggest milestone you guys celebrated? What was something where you even you were shocked by it?
I think we, well Binance generally counts number of users. That's probably the easiest milestone. Trading volume, yeah, it's pretty easy to count as well. Valuation, Binance is a private company. I don't think Binance has ever done a deal, had a raise or had a...
The numbers you will hear about is 100 to $300 billion. But to you it's a private company. So you don't even know what it's worth.
There's no transaction at those valuations. So those are estimates by third parties but the company has never raised money at those valuations. So yeah, but the thing for me personally as a shareholder, not running the company anymore, I just look at the user numbers. I just said look, then they published that publicly. So you know, 300 million, 315 million, those are good numbers to service users.
Where do you think it can go in the future? I know you're not running it. What do you think it can turn into?
I think, well the CEO just announced that the target is three billion users as the next target but I don't think that's the ultimate target. That's just the next target.
What do you think would be the ultimate target?
I think, well everybody on the planet should use money and that's humans and then there are AI agents and that's going to be all of us should have thousands, each person should have thousands of AI agents. So in the future we may count humans plus agents. I don't know.
Each of us should have thousands of AI agents working for us.
Yeah. Yeah. So, you know, they can edit this podcast video for you. They can buy your coffee. They can, I don't know, you book your trips, hotels, flights. Yeah.
You just fired 15 people here, CZ. These are nice people here. You're talking. I mean, what are they?
They're going to use their agents to do the work for them. And then you're going to have more podcasts. So, if you have 5,000 employees, not you, but you're the majority shareholder. Binance has 5,000 employees today in 100 plus countries. How many AI agents do you guys have?
Actually, I don't know how many agents they use. One number I just heard very recently, this just came from an anecdotal conversation. I think I heard they pay like $10 million per month on AI fees.
Binance is paying $10 million a month in AI fees.
It's just like, you know, tokens. Yeah, AI tokens. Yeah, that's what I heard. I have this is I heard like a second, third kind of information. I didn't verify it.
Very interesting. And what do they use that? What do they do with that?
I don't know for sure, but I would suspect, I would think that it's probably a majority on developer like coding. I don't know if they use Claude code or some other AI code. Probably just coding is a big part. Customer support is a big part because customer support is also language interactions. Yeah, I think those are probably the bigger two. I do encourage them to use more AI for risk monitoring, risk control, compliance, all of those areas can use AI, but I'm not sure if the models are very mature yet in those areas. I don't think there's a lot of training, a lot of data, etc.
What do you think maturity looks like in 5 to 10 years? Like when language learning model chip came out, life changed for everybody. Teachers didn't know how to react. Universities like, wait a minute this is a perfect paper what are these spaces for who wrote this paper, right? Everything was a disruption, right? What is life going to look like where companies in 5, 10 years have tens of thousands of AI agents what do you think is going to happen?
I think we're going to see a lot more faster progress and so I always believe that technology is a tool that increases productivity and that leads to faster progress of our civilization. Hopefully we don't get overrun by AI, you know, that become sovereign etc. But I think before that we're going to see a dramatic increase in the productivity and progress. So we should be able to discover drugs much quicker, cure diseases. We should be able to discover new materials that are lighter and harder and stronger and we can go explore space. We should solve many of the problems we can't solve today, both economics and you know, I think we'll just progress faster. We can build applications much faster. We can write software much faster already. So we are seeing much better apps, much more apps. So yeah, so I think our productivity is just going to increase.
What, when you do a SWOT analysis and you're talking about AI and AI agents, what's the threat long term with AI?
Well, obviously if AI becomes like, you know, self-conscious and they want to compete or they don't even have to compete with us. If they just pursue a goal that gets in the way and they just want to move us aside then that's the risk, right? So we just need to figure out how to build AI safely. Which is difficult I think because of the competition right now.
Yeah. How do you do that? Because if we as a society run as a higher regulated environment where maybe China's not running in a high regulated environment and they kind of lose control of the AI, what could happen if some people get a little too aggressive? Will there be, you know, a moment where there'll be world AI regulation that everybody will deal with?
I have a slightly, I'm not sure if regulation is the cure. I think it's one of the solutions that will help. I think the industry itself has to self-regulate. Well, self-regulate. I think by the time regulators figure out what's going on, the problems already occurred.
Regulators are always reactive. Right. So they see a problem then they try to fix it and they're very slow. Whereas the industry players, they're competing. This is multi-hundred billion dollar companies competing for business, right? China, US, maybe other countries as well. They have significant drivers to push progress to the max. So but at the same time I long term I do hope the positive forces will win. So it could be like you have a bad AI then you have to make a good AI to combat it potentially. Who knows? Yeah.
Got it. So you're going to have the bad AIs which will naturally happen, the evil, the villain, the enemy and it will produce more good to take over the bad and fight against it.
I think so. I think in any industry there's always going to be some players that are unethical, bad. There's always going to be a few bad apples.
But by and large I think our society overall we are around because we have more positive forces. So that's, I have a pretty optimistic view on humans, our civilization.
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Do you remember that conversation between Jack and Elon Musk where Jack Ma is like, you know, humans, you know, AI can't do anything that we're doing and they're kind of have... Do you remember that exchange between the two of them? Rob, can you find that? It's a short clip between two of them.
Is this the one, Jack? Humans or computers are smarter. Yeah, maybe start a little bit. Let's just see how quickly it gets into... let's see if we can get any of it. Press play when... Go ahead.
Basically, there's just a smaller and smaller corner of what of intellectual pursuits that humans are better than computers and that every year it gets smaller and smaller and soon we will be far far surpassed in every single way guaranteed.
Is there a reaction from Jack Ma to Elon? See if there's a part where he reacts.
So we used to think like for example being good at chess was an example of a smart human. I mean right now your cell phone could crush the world champion at chess. Literally.
My view is that computer may be clever but human beings are much smarter.
Clever is very academic, is knowledge driven. Smarter is experience driven. Computer is smart, is clever, but it's human beings. We invented a computer.
Okay, you can pause it right there. Who do you agree with?
Um, I'm not too sure to be honest. I take a, I don't take binary views on this type of things. I take a more gradient balanced view. I think there's somewhere, there's multiple aspects to it. I think as we will see...
This is a tough spot for you to be in because Jack Ma, you know where he's at and then Elon, I'm actually curious your thoughts on this.
I think we will see increasing intelligence capabilities from AI, right? They can solve more and more problems and they can compute, the computational power is going to increase. They can do more and more complex things. I'm not sure about the emotional or what do you call it, the human, the sympathy, well the sort of, what do you, emotional aspects of it. I think AI so far is not sentient. They don't have consciousness. They're probably not sympathetic to a lot of the human emotions etc. They may be able to, we may even be able to mimic that, AI may even be able to mimic that but I don't think they come to the true human feelings. And I think humans can use AI with this increased intelligence. Humans are very adaptable, right? So also based on business success, business success doesn't come from intelligence alone, right? Smarter people don't build large businesses. There's a lot of fairness, ethicalness, EQ, a lot of other things that...
Interesting. Right, so just being smart doesn't mean you have more money.
So the point there is just because AI is smarter than human doesn't mean their EQ and empathy is going to help them retain people. So somebody may argue that and say they don't need people, they don't need to have EQ because they're talking to other AI agents that you don't need to tell them how amazing they are, you don't need to ask them how their wife and husband and kids are doing because they don't need that validation so it makes drama a little bit easier. You don't lose efficiency because somebody's in a bad mood because you didn't give them a high five that morning. So that argument may be made against humans. No,
It can be. It certainly can be. So AI may be more efficient and less dramatic and less troublesome to manage etc. Right. So that is possible but I don't think they replace humans in that sense.
I don't think so in the short term. And I also think that we will find the proper safety guardrails against it. So there might be some accidents, there might be some damages, there might be some problems but I think over the long run we will find the guardrails.
So future looks bright in your life.
I think so. I'm always open. I like it.
By the way, if you were 20 years, if the 35-year-old CZ who was working crazy hours those 12 months that you guys went zero to a billion in profits, if he's the 35-year-old today in today's market, what industry are you entering? What are you doing? How are you, what software are you using? What technology are you using? Where would you get into today?
Well, I think for me, I would still get into the same industry. I think you can't just chase every hot industry. You have to do what you do best. You have to do what you're good at, what interests you and what's valuable for others. You got to find the intersection of those three things. And those three things don't change overnight. For a young person, you know, you can learn about blockchain or you can learn about AI. Both are good. So I wouldn't change what I would do. But I would change the way I would do it a little bit. I would be much more focused, much less distractions and just with hindsight, right? You will know like, okay, I can be so much more focused instead of getting distracted in a lot of different places etc. Yeah.
Got it. So, internet was first, blockchain was second, AI is third. What do you think is going to be fourth?
I don't know. That's very hard to predict. Like for example before ChatGPT came out, AlphaZero, AlphaGo was there, right? That wasn't a big industry. But then ChatGPT came, that was suddenly okay all this AI things happening. Before that, you know, Sam may know but I didn't know. So I have to wait for it to happen to see what's next and what's next probably going to be another, I don't know, another 10 years away.
You think the next is going to be another 10 years away?
No, I don't know for sure. I'm just saying that roughly, right? I don't know for sure.
Is at any point we could wake up and something new is, we're like, wait a minute what is the quantum computing and it's going to take this long to build it and all of a sudden what if they do it faster? What could that turn into? So who knows what's going to be taking place.
