Binance CEO Zhao Changpeng Talks Bitcoin Ripple South Korea Regulations Cryptocurrency

🎥 Jan 11, 2018 📺 Crypto Media News ⏱ 8m 👁 83 views

Binance CEO Zhao Changpeng Talks Bitcoin Ripple South Korea Regulations Cryptocurrency @Bloomberg

About Changpeng Zhao

Changpeng Zhao, founder of Binance, has been active in media appearances discussing his investment in Twitter (now X), his memoir "Freedom of Money," and his views on regulation and jurisdiction. In interviews, Zhao described himself as one of the top three or four investors in Twitter, stating that he backed Elon Musk's acquisition because "free speech is why I backed Elon" and that supporting the platform was "a meaningful cause for a crypto business to support." He characterized figures such as Ray Dalio, Eric Schmidt, and Masa Son as mentors rather than peers. Zhao also discussed his decision to base his life in the UAE, calling it "by far the safest country in the world" and praising its "visionary" leadership and calibrated regulation. He said that during the Biden administration the US was "one of the worst places to live in" for crypto businesses, but that in the last year and a half America has become "one of the best countries to live in" due to a policy reversal. Zhao addressed his legal case and subsequent pardon by Donald Trump, noting that without the pardon he would remain "labeled as a felon" and that his ability to hold financial

Source: AI-verified profile updated from Changpeng Zhao's recent appearances. Browse all interviews →

Transcript (17 segments)

✨ AI-enhanced transcript with speaker attribution

Interviewer0:05

This is for an exclusive interview, I believe his first TV appearance, with Changpeng Zhao, who's the CEO of one of the world's biggest crypto exchanges, Binance. Great to have you on with us. We'll carry on with the regulatory challenge, right? Because you obviously had to relocate from China to Tokyo, where you are now, as a result of the crackdown in China. We also just today heard that South Korea's government is beginning discussions on potentially a shutdown of crypto exchanges. So how much of a real threat to your very existence or the existence of your business do these regulatory overtures make?

Changpeng Zhao0:42

Yeah, they make a lot of change and impact to our business, but I don't think there's any particular threat. Korea exchanges are still operating right now. It's just that there's a potential ban. We don't know what the extent is, and we are actually away from that, so we should be okay for now. But it does probably impact some of the Japan-Korean exchanges. I've been trying to talk to them; they haven't responded to my requests yet, so we'll see how that happens.

Interviewer1:14

Okay, but is there a feeling that the ring is closing in? Tell me first of all why you chose to move to Tokyo and what the events that led you to leave China were.

Changpeng Zhao1:26

Okay, so in China, it's very clear that it's no longer allowed, and the government is against it, or at least their policies are hinting towards being against it. So we generally don't like to go up against the government, so we moved out of China. We're actually not in Tokyo right now personally, but we are spread out across a few different locations. We have a presence in Taiwan, Hong Kong, and other island countries. So I think it's a little bit tough to decide where you want to be in this kind of environment. Before, cryptocurrency exchanges were allowed, or at least they were not not allowed, but now things are becoming tighter, so we just have to play by ear and see.

Interviewer2:17

Okay, I mean the demand is obviously there. You guys had to hold new registrations, if I'm not wrong. You've recently restarted limited registrations. Do you think you'll get to a point where you'll be able to open it up again?

Changpeng Zhao2:36

Yes, absolutely. So the demand is extremely strong. We opened the registration for an hour yesterday, and 240,000 users registered within an hour. So we're growing basically a couple of million every week in terms of users. We did not expect this kind of growth, to be honest. Our system, our current core system, is actually okay. Our exchange matching engine is actually really fast, but some of the other parts we're actually not catching up on, especially customer service. We would like to provide the kind of customer service that Bloomberg is able to provide, but right now we can't. So we're kind of holding a little bit, but we're actively ramping up our bottlenecks. We're actively fixing that, so probably within a couple of weeks we'll be able to fully open again, and we'll see how much flood comes in.

Interviewer3:24

What kind of users are applying for new registrations? I mean, where are you seeing the most growth? These individuals, how much money are they putting through? I'm just curious to get an idea of the inflows that you're seeing.

Changpeng Zhao3:41

So our user demographics typically are much more heavily male, around 25 to 35 age range. I can't judge the income because we don't really have a lot of that data, but there are a lot of... well, my just perception, I haven't done other analysis, but the perception is basically there's a lot of guys with a lot of money. Guys typically move ten thousand to two hundred thousand dollars each day trading, and some of them are even much bigger. So they're very active trading. Okay, and then mostly in terms of countries, institutional as well. Yes, we're beginning to get a lot of interest from institutions. People are asking us for corporate verifications and also corporate features like sub-accounts under a main account, different kinds of risk management. So we're getting that a lot now. Most of the mass trading is under one single account, but the verifications for corporate verification, we look at the corporate registration, etc. So there's a lot of institutions now, and they're big.

Interviewer4:53

And you were just going to tell me what countries you're seeing the most interest from.

Changpeng Zhao5:02

Right, so it changes over time. Initially, when we started in China, we were getting China as our biggest country in terms of user geography. And because of the China ban, we moved out of China. Now China is like fourth or fifth on the rank. The US is pretty big, Japan is pretty big, Korea is pretty big, and a lot of the European countries like the UK, Germany, Italy are all very big. I think we are one of the very unique businesses where from the beginning we were spread out. Our users have spread out around the world. I think this is what blockchain allows, and it's very interesting. Actually, servicing this kind of mix of users is very challenging.

Interviewer5:44

What do you use to gauge the Bitcoin rally or the sell-off? Do you look at technicals? Do you look at the number of new account openings? The regulatory overtures? It's very hard for an outsider to work out how you assess the fundamentals of this asset.

Changpeng Zhao6:03

Different people do it different ways. For me personally, I really look at trading volume. When the trading volume is high, that means a lot more people are getting into Bitcoin or this cryptocurrency industry. Usually, price rise follows. When the volume shrinks a little bit, price usually declines a little bit later. And actually, in itself, the Bitcoin price itself is a very accurate index of the entire industry. So basically, given that Bitcoin price has been rising like crazy, that basically means more and more amounts of people have joined this industry. So that's basically how I judge it.

Interviewer6:45

And we heard from Warren Buffett, one of the greatest investors of all time, overnight saying that Bitcoin is headed for a bad ending. What does he not understand? What does Jamie Dimon not understand? What does Janet Yellen not understand when it comes to crypto?

Changpeng Zhao7:02

Right, so I think Jamie admitted he was wrong. In fact, in a smaller TV interview with a local blog, he said he was wrong two months ago. So it was good that he admitted he's wrong. Warren Buffett is a guy I truly respect from an investment point of view. I think he knows talking about equity investment very well, but I do not think he understands cryptocurrency at all. So it is what it is. I still respect him in other parts of his expertise, but I think in cryptocurrency, he's making a big mistake.

Interviewer7:39

And just quickly, what's next for your business?

Changpeng Zhao7:47

For us, before in 2017, our goal was to become the number one exchange in the world. That was the goal for 2018, but that's achieved already. So I think right now for us, it's customer service a little bit. We just want to keep up the good servers. I did work in Bloomberg before, and I know Bloomberg has superior service, so that's kind of the benchmark service level we want to get to. So that's really the goal now for all of 2018. That's a very long time for us, so we can't really predict that far.

Interviewer8:14

Just what you said, yeah, it's hard to say. It's a long time in crypto land. But yeah, it sounds like you need to set some new goals if you've already achieved your 2018 goal at the start of the year. Thank you so much for joining us. Changpeng Zhao, who's the CEO of one of the world's biggest crypto exchanges, Binance, speaking exclusively to Bloomberg.