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During a fireside chat on 18 September with Binance CEO Richard Teng, moderated by Michael Casey, Chairman of The Decentralised AI Society, key topics like the imminent release of former Binance CEO Changpeng Zhao (CZ), recent license approvals, the bullish crypto sentiment, and the evolving digital asset landscape, were addressed.
Being in one of the most interesting positions that a CEO could possibly have, especially with its Founder still in prison, Teng clearly has a significant responsibility steering the company and ensuring everything is in order.
According to Teng, CZ will be a free man in less than two weeks' time.
He and expressed his pleasure of being approached by CZ to lead the exchange:
“So it is first a privilege and an honor to be approached by CZ and the rest of the founders to lead this very important enterprise. So we have an extremely fantastic team of management. We have very dedicated staff. And globally, we have some of the most dedicated community out there. So if you look at crypto, it's all about community. I am very grateful for our users and community. So today, we serve 225 million users worldwide. We have the largest web 3 ecosystem globally.”
Under CZ's leadership, Binance was a founder-driven company.
The landscape then, in 2017, was very different.
At the time, regulatory frameworks were vague, and the company operated in an environment of uncertainty.
Now, in 2024, we are seeing a landmark shift towards regulatory clarity, with approximately one-third of global regulators starting to oversee the crypto space.
But that was not the landscape that CZ faced.
The institutional adoption this year has been another game-changer, particularly with the approval of exchange-traded funds (ETFs) in the United States (US), Canada, Australia, Hong Kong, and Brazil.
They have changed the narrative of Web3, blockchain, and crypto.
According to Teng, when you have the largest asset money manager in the world, BlackRock’s CEO Larry Fink—who has moved from being a sceptic two years prior to a believer—launching ETFs, it becomes very transformative for the industry.
Teng noted that as a company, this new regulatory and institutional landscape means they must evolve.
He stated:
“So on our front as a company, we continue to change as well. With the changing landscape. CZ was founder, CEO. I lead a very different company. It's a much more matured company. We have now more than 5,300 staff. We're going to add at least 1,000 more by the end of the year, to continue to grow. That's our confidence in the sector. So we continue to deploy globally. And I report to a board now. So I have a board of directors. It's a board-led company now. So I work closely with the board directors on our strategy, on our global deployment, etc. So it is navigating that landscape. Because the direction of travel is very clear. It's going to be much more compliant in nature.”
Teng pointed out that compliance has become a key focus for Binance and happily announced that they have recently secured regulatory approval in India and for their subsidiary, TokoCrypto, in Indonesia—two of the largest and most significant markets.
He added:
“So we have 19 global regulatory approvals, making us the most regulated exchange globally.”
This commitment to compliance is substantial.
A huge sum of money has been heavily invested in the compliance area, according to Teng.
He revealed:
“We started investing in compliance a couple of years back when we saw the direction of travel being very clear, that more compliance, more rules and regulations are coming into play. So in 2020, we spent about US$158 million. That went up to US$213 million. And this year, we will spend even more.”
Adding another "160,170 more before the end of the year" seems possible too, based on Teng.
Different jurisdictions have unique rules regarding cryptocurrency—whether it is classified as a security, a commodity, or a digital asset—so we need to adapt our operations to meet these diverse regulatory requirements.
Teng explained:
“So it's a virtual asset or digital asset, whatever the terminology is. And in each of these places, the rules and regulations are so different that you have to really understand what the provisions are and how to comply with that. And set up your operations accordingly. So it's not possible to have a one-size-fits-all.”
Unlike the banking space or security space, where rules are pretty harmonised across the world, crypto remains at a nascent stage.
So if you run a banking operation, the banking ratios that you have to adhere to are pretty standard, save for securities market.
This is challenging because we are at the nascent stage of development.
But 2024 is the mark of that mainstream.
Binance is a user-first platform, and Teng expressed that they always placed a strong emphasis on user trust.
Compliance is critical, but they also go beyond what is mandated by regulators.
For example, Binance created the Secure Asset Fund for Users (SAFU), which holds over $1 billion ready to compensate users in the event of a security incident.
They have also implemented strict training policies to ensure their staff meet the highest standards of security and integrity.
This year alone, Biance have helped users avoid potential losses of over $2.4 billion, and have recovered nearly $18 billion in funds lost to scams.
These are initiatives they take seriously because Binance believes that putting the user first is not just a responsibility but a strategic advantage.
Compliance is expensive, and for smaller players, this can create significant barriers to entry.
Teng elaborated:
“So for maybe smaller, medium-sized enterprises, they find it very tedious to cross those hurdles. But we are able to do it and we intend to use it as a competitive advantage. So user-first, compliance-first organisation.”
However, Binance views this as a competitive advantage, leveraging their scale to ensure the highest standards of security and user protection.
Regarding token listings, Binance maintain stringent criteria to ensure quality and legitimacy.
Binance assesses factors such as the project’s leadership, security measures, and community engagement before considering any listing.
Once listed, they expect these projects to continue building and fulfilling their commitments to users and the broader ecosystem.
Teng iterated:
“We want the projects themselves to continue building for the benefit of users, right? So we have actually a team of people within Binance, other than the people that will be looking at potential listings, a team that serves these projects to make sure that they continue to fulfill their obligations to the users, to the communities, to the platform. And if they don't, we actually delist projects as well.”
Based on data that has been released according to Teng, India is the top in terms of crypto index adoption.
He rationalised:
“…we uncovered that crypto adoption is the fastest where the two dimensions are at play. Firstly, slightly lower financial inclusion because people can't get access to the banking system. People can't get access to payments. And crypto becomes that mechanism. It operates 24-7, doesn't sleep. It transmits at a fraction, at a miniscule fraction of the cost of what traditional financial institutions charge. You can do remittance cross-border really instantaneously.You have to wait two, three days for your money to arrive, your loved ones, your families, etc. Really at a miniscule fraction of the cost, right? So that is the beauty. And we see a huge uptick every time where financial inclusion is slightly lower.”
He concluded:
“Secondly, where the demographics is younger, where the population is much younger because naturally they are much more tech-savvy. If you look at data coming out from the world, the young adults of today, their first investments into assets is into crypto… So in any sector where the youth, the young adults are embracing, that's going to be the industry of the future.”
Teng expressed:
“I don't have a crystal ball on that front. I do hope I have a crystal ball. But we are bullish on this cycle, right? So what we continue to do is continue to build the best platform out there to serve our users globally. Continue to deploy, continue to work with regulatory agencies globally to support crypto adoption. And by being the largest crypto player, many jurisdictions when they start looking at how do you embrace and develop this exciting sector.”
The promise of financial inclusion in the developing world was actually what drew Teng into crypto in the first place.
Looking forward, the landscape for crypto and Web3 is full of potential.
With increasing institutional adoption, the pace of change is rapid, and we are well-positioned to continue leading this industry forward.
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