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CZ, welcome to the All-In podcast. >> Well, thanks for having me here. >> It's really, really great to see you.
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>> It's a pleasure, Hannah. >> I want to go all the way back to the
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beginning because I think a lot of people don't really know your background the way that they probably should. The
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part of the background that I really care about is there's parts of your early journey in Canada, which is very
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similar to mine. You worked at McDonald's. I worked at Burger King. >> Okay.
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>> But before that, your parents were able to immigrate from China right around
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Tanen Square, right? My father went to you uh Canada to study in 1984. That's
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five years before tan square. >> How did that come about? So your father stayed in Canada once he went there or
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no? >> Uh he he could visit us every twice a year basically but he would most of the
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time he was in Canada >> and um yeah so >> and he was a teacher in China.
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>> He was a teacher professor. He was a professor in China and then he went to
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do a exchange program in University of Toronto first. >> Uhhuh. And then uh a couple years later
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he moved to UBC University of Brit Brit British Columbia in Vancouver. And then he was there. We were applying back back
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then it's actually very difficult to get a passport. It takes like three or four
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years to get a passport. We started applying in 1985 fiveish. It took like two three years to get a passport and
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then uh after you get a passport >> meaning a Chinese passport. >> A Chinese passport. Yeah. So um and then
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it takes like another few years to get a visa. Like that's just how long the
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process takes back then. And then uh yeah, so we got it shortly after uh in 18 uh 1989.
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>> When you look back, it almost seems fortuitous. Isn't there a version where
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post tan men they kind of just shut everything down and say, "Okay, let's
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just reset and then maybe they wouldn't have approved the visa or >> No, actually after that the visa got
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easier. The passports like that got harder." So they they don't they no
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longer issue new passport like the reissue of new passports got harder. But we we were lucky. So we got the
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passports like you know like maybe a year before that and then we're waiting
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for the visa and then afterwards the visa got easier. So in some ways that actually kind of helped us to get to get
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the visa. Wow. >> Yeah. In some really weird way. >> Did that event shape your perspective in
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any way shape or form or not really? Were you too young or no? You were what 12?
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>> I was 12. So I think consciously no. uh this it didn't change me that much but I
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subconsciously I think you know there were discussions about know democracy versus um so there's some discussions I
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was actually living on a university campus back then uh the China the Chinese the China science and technology
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universities one of the top four universities in China so there were a lot of discussions among the university
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students which were older like which were probably seven to nine years older than me so there were some discussions
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but I'm I was 12 so um I wasn't really clued into it but I think subconsciously
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It may have some kind of a subconscious impact. I don't know. >> And what was it like when you you moved
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to Vancouver? >> I moved to Vancouver. Yeah. >> So you land in British Columbia.
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>> Yeah. >> In Vancouver. It's like a different >> It's just different.
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>> It's very different. It's very different. Um it's just a completely new
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country and then uh >> did you know English at all or No, >> I studied English for like couple years
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in in school but you know I was not fluent at all. But yeah, Vancouver is great. Canada is you know nice green
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nice greenery. um open space. Uh everything's pretty uh the living standard is high. Everything's pretty
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pretty good. Um everything is very clean. Uh the fruits are bigger. Um so >> it's it's just a really nice
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environment. Yeah. >> Did both your parents work when the family was reunited? What do they do?
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>> Uh so my father stayed uh was like assistant professor in the in the in the
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un university. He gets like a thousand Canadian dollars per month of like I don't know what do you call it?
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>> Like a stipent. >> Like a stipent. >> Yeah. We get some like really lowcost
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house housing with the the faculty housing from uh UBC. So we lived on campus. Uh we I think on the third day
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of our arrival in Canada, my mom went to a factory sewing factory to work like sewing clothes. Uh she was a math and
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history teacher in China, but she doesn't speak that much English. So she couldn't get the same level of jobs and
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she basically can only work at a minimum wage factory. >> Yeah. >> Uh she did that for like seven 10 years.
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Um and yeah so she she just worked there. >> My mom was a nurse in Sri Lanka and when
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we immigrated when we got refugee status >> my father was unemployed. >> Yeah
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>> and my mom became a housekeeper >> and that's what she did and then she
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became like a nurse's aid and and then I think when I was like 14 is when I got
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my first job. >> Yeah. Yeah. I got my first job at McDonald's at I think it's 14 or 15. I
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think it was 15. >> 14. Yeah. >> We're the same age so it probably would
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have been 14. I don't know what the Do you remember what the minimum wage was
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in British Columbia that >> I do. Uh the minimum wage was $6, but McDonald's
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>> Oh, that's incredible. In Ontario, it was 455. >> So, but in McDonald's, they pay 450.
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That's below minimum wage >> because the McDonald's somehow had like
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a special exemption because they a lot of young kids work there. >> Yeah. >> So, um so, uh I think it was on my 14th
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birthday that I applied for the job and then a week later I was flipping burgers
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there. Um and it was the first income I had. You're not like this precocious
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technical wonder kid who's coding 247 and learning computer science or were you?
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>> Uh no I wouldn't describe me as that. I think I'm I'm a technical guy. Uh I
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started computer science. I was learning pro I was interested in programming even
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in high school. Um but I wasn't a programming wizard. Uh I wasn't like you
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know one of those really genius coders. >> Yeah. >> I think I'm a decent coder. Uh I think I
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I wrote some decent code in my in my career and then um when I was like third 20 28 30-ish I moved away from coding. I
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was like doing more business development um sales and etc. So there was like maybe I would say 80 years of my career.
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>> So you're a normal immigrant kid learning to adapt in Canada. >> Yeah.
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>> Did you have a lot of friends? >> Yeah, I had a lot of friends. I had a um
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my >> only Asian friends or No, >> both. I actually had like both Asian and
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non-Asian friends. Uh but uh uh I was actually in our school most of the Asians hang out with Asians but I was
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actually one of the exceptions that I had like Caucasian friends. I had all kind of uh uh different friends.
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>> Yeah. >> My teenager years in Canada was great. It was like some of the best years like
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I think those years are really shaped to me to be a happy person. I'm generally a
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happy person. >> How did it feel when you weren't able to get into my alma mater University of
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Wateroo and so had to settle for McGill? >> How did that make you feel? Does it make
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you feel stupid? So actually u I was decid my sister went to Waterloo so I was I was uh deciding
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between Waterloo and U McGill and maybe UT. Uh I knew I wasn't going to go to
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UBC. I wanted a different city. >> Yeah. >> And actually UBC gave me an offer but I
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just knew I I don't I don't want to go go there. Um at the at the time I uh my
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friend's uh mother who I really respect uh uh she said well you might want to
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become a doctor because doctors have a good living good a good lifestyle. Um I took her advice. I study biology and
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what is not much of a biology school. >> True. >> So, uh I went to McGill. Uh but then um
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one semester later I said, "No, no more biology. I got to I'm going to move to
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computer science." >> Was it a typical kind of college experience for you? Did you have great
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jobs in the summertime or were you just like a an average normal university kid?
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>> How'd you pay for school by the way? >> I worked every summer. Uh I worked every
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summer and I also worked part-time during the school year. Um so >> So no debt. You were like I must
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graduate without debt. >> Yeah. I didn't take any student debt. Uh the first year I actually still took
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about $6,000 Canadian dollars from my dad. Um the second year I was still a bit short. My sister gave me $3,000. And
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then from that point on I never took money from uh uh uh at all. I just I was self-sustainable.
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>> Wow. >> Yeah. So no student debt. Very lucky. U and uh but I just worked every summer
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every like Yeah. >> You know the best thing about Waterlue which was a savior for me
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>> the co-op was co-op program. Yeah. And I had these incredible co-op jobs. I still
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graduated with about $30,000 of debt. >> But I was also pretty prolific trader
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>> and equities. >> Okay. >> And my boss, this guy Mike Fischer,
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>> did this incredible kindness to me where >> I was working at a bank. And I was a
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derivatives trader. That was my day job. But I was trading equities and I had made him enough money. And he said, he
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called me Sherman. Didn't call me Chimathi. He said, "Sherman, how much
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debt do you have?" And I said, "It's about 30." I said, "Fish, it's about
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30,000." 32,000. And he said, "Go downstairs right now to the CIBC and pay your debt and I'll
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write you a check." >> Wow. You should have. >> And he wrote me a $32,000 check.
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>> I should have said 3,000 300,000. >> But Canada is incredible because you can
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get this education and it doesn't saddle you with this >> Yeah. >> debt that you can't overcome,
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>> which is not true in the United States for many people anymore. >> Yeah. Even in McGill, there were people
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from the United States going to McGill, paying international student uh tuition and it was still cheaper than the US. I
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was like that's crazy. >> That's crazy. >> Yeah. So yeah, we were lucky that the US
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the Canadian tuition was okay. >> So you graduate from McGill in computer science.
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>> Yeah. In computer actually I didn't graduate from McGill. Um I went there
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for four years and on my third year I got an internship on my fourth year I got my third year I got an internship
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job and then um u extended extended extended and I didn't go didn't go back
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to McGill. So I didn't graduate from McGill and later on I found out I still
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need a bachelor's degree to apply for work visas in Japan. So I went to one of
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this is like the doc this is 2000 this is the do like height. Um so I went to an online education uh program called
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the American College of Computer Science uh and got a degree there. >> Oh my god. Yeah. So you're technically a
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graduate from that school. >> Technically. Yes. >> Okay. So which internship did you get
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where you started to work there? Uh so uh I got an internship uh at to in Tokyo. Uh so I always uh in from from
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first year college I always worked on a programming job. So I worked at a company called original sim writing some
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simulation software and then um third year I got into a company in Japan in Tokyo called Fusion Systems um Japan and
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then uh they were writing uh order execution systems for brokers of uh the Tokyo stock.
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>> Sorry that's a Japanese company with an office in Montreal or an office in
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Canada or no? >> No no I I went to Tokyo. You went to Tokyo. >> Yeah. It's actually an American uh a
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bunch of American guys company that's in Tokyo. Uh so it's like a bunch of guys
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were >> And you're thinking this is an adventure. I'm going to go and live in
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Tokyo for a summer. >> Yeah. Yeah. I mean I was a college student and living in Tokyo is like a
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you know it's fun. It's dream. Yeah. Yeah. And uh and the first time you go
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there is like it's it's >> from the future. >> It's it's cool. Yeah. Yeah.
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>> And what kind of software did you write? >> Mostly order execution software. So the
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same software like that moves orders and buy what drives Binance today. >> Pretty much. pretty much. So it's the
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same same style like actually all the software I was involved with have no decision- making.
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>> So when you first and were exposed to this it was not like oh wow I love this
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>> this makes sense or was it more okay I'm asked to write this code and I
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understand the concept so let me just do it. Were you attracted to the subject matter or you just did it because it was
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your job? I first did it was because it was my job right I was so young I didn't
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know what all the different industries are and actually when I got to the company the company was giving me a
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project on working on dig uh digital imaging storage systems like know this basically iPhone photos app but for for
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for medical imaging uh for for Nikon >> but very soon the company's main main
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product is the order execution system right >> so I was involved in that and then that
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became the thing over my career and I like it uh because um it's it requires
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quite a lot of technical expertise everything is about efficiency making it go as fast as as possible uh process as
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low latency as possible right >> um that kind of appeals to me I'm an efficiency kind of driven guy like like
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subconsciously and just to double click on that when you look at high frequency trading organization the susanas the
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jumps they go to such a degree to basically optimize for efficiency and low latency all the way down to it's
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their own circuit breakers it's their own physical fiber infrastructure they're willing to sort of pay the price
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to just shave off a handful of milliseconds on either end. >> Yeah. >> How does that manifest in the software?
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So when you're writing that kind of software, how do you actually optimize for those boundary conditions in code?
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>> Yeah. Yeah. So well, there's quite a few levels, right? The first level you do is
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basically you write a software to be efficient and fast like no no slowness. Uh uh you want to remove all the
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database lookups. So you want to do everything in memory and then um you want to reduce any sort of additional
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computation. uh you want to simplify the risk checks pre especially pre-order pre
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pre-trade uh risk checks and then the more advanced versions you move on to like the FPGA which is a network chip
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card that's on the on on the on the on the network card on the what we call the
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ether ether card >> so that you don't have to go all the way up to memory and come all the way back
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down to the processor >> so back then when I was like still writing code like maybe 10 years ago
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that round trip is about 100 mill 100 microconds >> microcs yeah >> and then um by avoiding that you reduce
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down to 20 microconds right >> and then you move it to physical infrastructure you want a collocation
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right you want to >> why haven't these organizations like in the AI world for example with grock our
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big observation even 10 years ago when we were starting the business was this exact idea which is it's really
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inefficient for to sit in a GPU to go all the way up to HBM to come back down so let's just take SRAMM and just do
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everything here on chip right >> manage it with C to that technical problem made a lot of sense and very
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very fast for the decode phase of inference makes a ton of sense Why when so much money is on the line for high
00:13:30
frequency trading, why did they never try their own custom silicon? I understand FPGAAS, but nobody really
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went to the point of actually saying here's a specific ASIC or did they and we just don't know about it. I don't
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think it exists on very large scale. Um the uh I think the algorithms change too
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often. So when you go to hardware like you want to design your own chip, uh it it is very efficient. is highly is very
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fast but when you want to change it uh it takes a long time right so when when you want to reprogram it I think FPJ
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already offers kind of the the best >> best of both the both worlds even FPGA
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you want to reprogram it the programming cycle is much is 10 times longer than software
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>> the company you worked at in Japan was it successful >> it's successful you got that company got
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sold to a NASDAQ listed company just before 2000 >> for a lot of money >> for like $52 million back then so that
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was decent money yeah >> and So, is that when you said, "Hey, hold on. There's something here." Or no,
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was it something else that happened? >> No. Uh, so at that time I was too young.
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I was like 20 something. Um, >> so you're working at this place. You're
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just a coder. >> Yeah. Yeah. >> You're a salary man. >> Yeah. Yeah.
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>> In Japanese terms, right? >> Salary man. Yeah. >> You're a salary man. So then walk us
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through what happens afterwards. >> So uh that company got sold. They acquired there was a lot of culture
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clashes between the parent company versus the original company. Um that's my first experience about you know how
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mergers may not work. >> Yeah. the the two managements were just clashing and then um uh the the same
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partners went to do a different company uh called building two um but now this partners the I didn't get any money but
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the partners got quite a bit of money now so they rented a very fancy office um that company only lasted a year uh it
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means that previous success doesn't guarantee future success >> in fact
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>> um so uh they spent a lot of money had a very nice office but has zero zero zero
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revenue so that folded within a year and that's 2001 and um so uh and early 2001
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I was looking for new jobs and then Bloomberg was hiring and this is right before 911. Um I kind of got an offer
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before 911 and then 911 happened. I still haven't moved and then >> where was this to New York or
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>> this was in well I was still in Tokyo back then and then Bloomberg is in New
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York. The offer I was supposed >> The offer was in New York. >> The offer was in New York. So after 911
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I called Bloomberg say hey is the job still there? Do you still want me to go? And they said well do you still want to
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come? I was like yeah okay. So then I went. So I went to New York in November of 2001.
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>> Wow. What was that like? >> The streets were pretty quiet. Um >> Yeah.
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>> And uh but you know I was fine. I was you know um New York is a is New York
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was quiet for a few months but it became lively pretty quickly I think. So I didn't feel too much uh issues.
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>> Um um so I then went to New York and worked at Bloomberg for four years
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>> doing exact again the same thing. You're kind of a salary guy. You're working at
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a big company, >> salary, bonus, maybe some options or some phantom equity or something like
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that. >> Yeah. So, um I joined as a senior developer. Uh I was put into a team
00:16:25
called uh tradebook futures. They just formed this team uh and uh they had a system that allowed people to trade
00:16:30
futures on Bloomberg, but it wasn't it was like spread out. So, they collected
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that into into into one into one team >> and still no inkling of like that
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entrepreneurial bug. >> Not really. back then I was like nah I I worked >> what were you looking for stability like
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why like why Bloomberg being in New York like what was it >> I was just a young guy I was like I
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think I was like 24 20 24 25 okay >> so I was just a young guy trying to get
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a job you know uh experience different parts of the world and get and and just find my way through um I I knew I wasn't
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experienced enough to do entrepreneurship myself right so I was and I I was working a small company in
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Tokyo the company only had like 200 Bloomberg at the time had about 3,000 people. So to me that was a big company.
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>> Yeah. >> And they fancy offices, fish tanks and free food and everything. Um so I joined
00:17:18
as a senior developer. I got some good bosses. I got promoted three times in two years and then I was leading a team
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of 60 initially and then kind of grew to about 80 people. Um and that's when I
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became sort of a manager. Uh I no longer wrote code and I started >> the worst transition.
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>> The worst transition. Right. The worst. >> So um so that's kind of my Bloomberg
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experience. Yeah. So that and I Yeah. So I had to stay there for four years. >> And then you quit and moved to China.
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>> Yes. >> How does that happen? >> I think was wrong like uh beginning of
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2005. Um again the same uh friends I had I made in Japan, they were talking about
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starting a new company, a new uh fintech company and they were in Asia, right? So
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they're talking about Tokyo, Shanghai or Hong Kong. And they said Shanghai is
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most likely the most happening place for the future of fintech. Um we should have
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picked Hong Kong. Hong Kong had a lot more happening since then. >> Um, so I went there in 2005. So the it
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was like five foreigners from a Chinese perspective. U five Caucasians, four Caucasians plus a Japanese plus me. I'm
00:18:19
the only one who speaks Chinese and my Chinese was kind of rusty back then too. So the six of us went there to do a new
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IT start startup in Shanghai. >> You So all you guys just land there and what was the idea? So we thought you
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know we have all this Wall Street experience on Wall Street trading technology experience.
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>> So your other friends had they moved to New York or no they were still in Japan
00:18:40
doing their own thing. >> Two of the friends were in New York with me and then um uh the other three were
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from Japan right they were there they always they were so the six of us came together and uh we wanted to do we want
00:18:52
our idea was uh let's bring the wall street trading technology into China so
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we can service the brokers and exchanges in China. Um but then so we went they rented a very fancy office again. Uh
00:19:04
>> wait okay so hold on just >> so when you guys start this company this
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so this is now your first entrepreneurial you're like okay let's do this
00:19:12
>> pretty much >> did you know to even ask the question like okay guys what's our equity split
00:19:18
what's the cap table did you know any of these things or you're just like great
00:19:22
let's go do it I'm just assuming it's one sixth we're equal like how how did
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it all >> it wasn't one6 it was like the top guy had like I don't know 39 40% and the the
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the rest five of us split equally so I had about 11% % or so. >> Okay. >> So, I knew that, but I didn't know like,
00:19:37
you know, all the ins and outs about, you know, shareholder rights, uh, what terms. I didn't know any of that.
00:19:43
>> Yeah. Preferred versus common, none of it. >> And then I >> You're like, great, I got 11%. I'm
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moving to Shanghai. >> Yeah. So, I just have 11%. I didn't I have no idea what common stock is or
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versus preferred. So, uh, just went and then but so I was a junior partner in this group. And then, uh, once we landed
00:19:58
in China, I start because I speak Chinese, right? So, I began talking to potential clients. I went to talk to
00:20:03
brokers. I found out we are registered as a wholly foreigner owned uh what we call wolfie uh holy holy foreigner owned
00:20:11
enterprise. >> Yeah. >> The Chinese brokers and financial institutions are not allowed to work
00:20:15
with a wolfie. >> That's right. >> U so we found out after we started a
00:20:19
company while we were in Shanghai and so the company pivoted towards doing um uh
00:20:24
any any any IT system for any for any company. We can be like >> work for hire.
00:20:28
>> Work for hire. We can be fix >> deote. You became deoid. uh not not even
00:20:32
deoid we can be fixing printers or we can be writing like you know SAP implementations for you we did all of
00:20:37
that so there's a whole spectrum of things and so we did that for a few years and we actually made a living
00:20:41
>> for a few years >> yeah for for for a few years like uh and we made a living out of that yeah we we
00:20:47
started we had a quite a number of automotive clients uh the Shanghai General Motors uh Shanghai Works Wagon
00:20:54
uh Shanghai first auto mo uh first automotive they were all clients of ours and like maybe three or four years in uh
00:21:01
we started having offices in Hong Kong and then we were dealing with a Morgan Stanley, Deutsche Bank, Credit Swiss.
00:21:06
>> So it grew so it was it was successful. >> The company is still around. The company
00:21:09
is still around. So I I left in 2013 after 8 years. Um but the company is still around.
00:21:15
>> So in the eight years you worked at that company all in Shanghai. >> I was mostly in Shanghai, but then I
00:21:19
spent quite a bit of time helping to set up the Hong Kong office and then I was also doing quite a lot of work for some
00:21:24
clients in in Tokyo. >> How big did that company get? I think even you got to about 200 people again
00:21:29
and it's kind of stayed there for as for as as far as I know even till now. >> And so as a junior partner you just take
00:21:35
profits and you share it like >> Yeah. Yeah. So uh uh well actually I we didn't take that much profits. Um I
00:21:41
actually invested most of my savings back into that company and I actually didn't cash out a penny. Um but wow
00:21:47
>> after a few years the company was uh s stable enough to pay the partner
00:21:51
salaries that all of our kids go to international school. So we get a we get a we get a six figure salary.
00:21:58
>> At that point you had gotten married. >> Yes. Yeah. So at that point uh uh Yeah.
00:22:01
So at that point I got married when I was in New York. So like uh Yeah. So and then u uh Yeah. So we I had two kids.
00:22:09
>> And you had met your ex-wife. How? >> Yeah. I met her I met her in in in Tokyo
00:22:13
when I first went to Tokyo. So I met her in 1999ish um when I when I was first in Tokyo like
00:22:19
doing the interns. >> Okay. And then um uh she visited me in New York and then you know we got
00:22:25
married and then uh we had kids now we are separated or we're divorced in Shanghai. I had young kids and you know
00:22:31
it was enough salary to put the kids into into international school and that was that was good enough for me.
00:22:37
>> Wow. >> Yeah. >> So far again >> nothing here tells anybody that you're
00:22:42
about to go and start Binance. >> No no nothing >> nothing. No I didn't know. So then 2013
00:22:47
2014, how old were you then at that point? You were >> uh 20 2013 I I would be 36.
00:22:54
>> Yeah. Mid-30s. >> Yeah. Yeah. So >> So again, salary guy. >> Yeah.
00:22:58
>> Junior partner at this thing. It's going well. Your kids are in private school.
00:23:02
>> Yeah. Yeah. >> So then what happens? >> So then uh I came across Bitcoin, right?
00:23:07
So um well, one of my friends tells me, "Look, see, you got to look at this
00:23:10
thing called Bitcoin." I look into it. I was like uh it took me about roughly six
00:23:14
months to fully understand it. So that was from like roughly July 2013 >> and that's because you read the white
00:23:19
paper and you said I need to read it again and read it again or >> Yeah. Yeah, pretty much. And then um
00:23:23
because back then there was the Bitcoin talk or forum and then that's pretty
00:23:27
much it. >> But did you see my Bloomberg article in 2012? Is that that had any influence?
00:23:32
>> Unfortunately, I don't I I read a bunch of stuff. I actually don't remember what
00:23:36
I >> I'm just kidding. But I did write this thing and it's funny because I had a
00:23:40
kind of a relationship with Mike Bloomberg. was kind of not even mentor like he was just too senior but
00:23:46
>> he knew me he liked me he would invite me to certain things >> with Mike Bloomberg
00:23:49
>> yeah with Bloomberg and and then I got to know some of Mike's team >> and in 2012 or so they said would you
00:23:56
write an op-ed >> okay >> and I was like yeah and I wrote it about Bitcoin and I said everybody should put
00:24:01
1% of their net worth into Bitcoin and I said it's basically schmuck insurance
00:24:06
>> and then they published it in the Bloomberg terminal or whatever and that's when I got redpilled on Bitcoin
00:24:10
where I was like man it's the most incredibly interesting technical product that I had read about and I think the
00:24:17
thing that captivated me I don't know if you felt this way it was the only white
00:24:21
paper that I read end to end where I thought this is one of the most elegantly written pieces of
00:24:28
non-technical pros do you know what I'm trying to say like it's not >> something that is like dense and an
00:24:34
archive that is just meant for PhDs >> you could literally give it to your
00:24:38
sister to your brother to somebody non-technical And they would understand it. >> Yeah. Yeah. And it's only nine pages.
00:24:44
>> And exactly. You know what an enormous amount of intellectual skill it takes to
00:24:48
do that. >> Oh yeah. Oh yeah. Yeah. It's much harder to write it very short.
00:24:50
>> Much harder and elegantly and simply. >> Yeah. Yeah. Anybody else try to rewrite
00:24:55
that? I think it' be 90 pages. >> So the friend that showed it to you, was
00:24:57
he a co-orker of yours or no? Just a random friend in Shanghai. >> It's a friend. It's a it's a it's a
00:25:02
random Well, not a random. He's a friend. Uh we don't have any working relationships. His name is Ron Tao. He
00:25:07
runs uh I guess now Skyline Ventures. And back then he he was at Lightseed Ventures
00:25:11
>> of course >> he was a managing director of Lightseed Ventures in China.
00:25:15
>> Okay. >> So we play we have a poker house game like you know small stakes. Um a bunch
00:25:19
of uh I a bunch of entrepreneur like struggling entrepreneurs versus like VCs. Uh so the VCs have all the money
00:25:26
and all >> David versus Yeah. >> So but you know it's it's a fun it's a
00:25:31
fun game. It's not a very serious game. So on in one of the poker games uh Ron
00:25:35
says CD you should look at this thing called Bitcoin. I was like, "Okay, Bitcoin." Okay. So, uh, and so we talked
00:25:41
about it a little bit and then Bobby Lee, uh, who was at the time was working for Walmart, was just about to quit
00:25:46
Walmart to join BTC China to become their CEO. And, uh, >> uh, as part of that deal, Bobby said he
00:25:52
will bring Ron in as an investor, Lightseed into >> into BT BTCC >> into BTCC. So, that's in two uh, July
00:25:59
2013. I was like, okay. So, they two guys are pretty serious about this. So I had lunch with Bobby the next day and
00:26:05
Bobby said put 10% of your net worth into Bitcoin. He said there's a small chance you will go to zero then you lose
00:26:09
10%. Uh there's a much higher chance you will go 10x and you'll double your net
00:26:14
worth. I was like okay sounds pretty serious. So u that's when I started learning about reading the white paper
00:26:19
more carefully. Took me six months. Uh so it was till the end of 2013 I started like I'm I'm convinced now. I'm ready to
00:26:27
go. But then Bitcoin went from $70 in mid 2013 to like $1,000 by end of 2013. So you already went more than like 15x.
00:26:36
>> How did that make you feel? >> I was like, I'm I'm too late.
00:26:39
>> I was like, I wish I got in early. >> Yeah. >> Cuz when back then, right? No. Doesn't
00:26:43
matter when you get into Bitcoin, you always feel late. >> Yeah. >> Right. Because everyone you talk to has
00:26:48
in the Bitcoin industry has bought before you. >> And did you talk to anybody while you
00:26:51
were learning about it to say like you have a community in in Shanghai? there's
00:26:55
a comm there's a very small community in Shanghai and then I was basically talking to anybody in the world that's
00:27:00
that's willing to talk with me uh and then I had a couple friends in Taiwan they used to they they worked for TSMC
00:27:06
back then uh because and then they were trying to do a mining chip uh for for Bitcoin so two of those guys left TSMC
00:27:13
try to do this startup startup never never really took off but that was one group of guys I was talking to um there
00:27:20
was uh another couple they were mostly minors there was another guy called um his nickname is fish uh silver fish uh
00:27:28
in China. He's like a big minor. He's runs the F2 pool even today. >> Oh sure.
00:27:32
>> So those guys were based in Hondro um you know I went they came to Shanghai I
00:27:37
talked to them etc. So there was a group of guys that you talked to and then uh the biggest thing was um in December
00:27:43
2013 December 13th 2013ish there was a Bitcoin conference in Las Vegas. I flew there um to meet everyone everyone in
00:27:53
the industry was there. Uh there was a 200 people conference. Uh Vitalik was there, Matt Rosak was there, Charlie Lee
00:27:59
was there, uh um bunch of guys were there. Um and the same same guys still today. Um but and then at the time just
00:28:07
before that it was the Silk Road arrest of uh Ross >> Wubber. >> So the media was like no this Bitcoin is
00:28:14
only used by drug lords. >> Um and when you go to the conference it was like a bunch of kids, a bunch of
00:28:19
geeks geeks and they're very nice people, right? So you talk to Vitalic, you know, you know, he's a very nice
00:28:24
person. >> Were you still working at that company while you were doing all of this
00:28:27
moonlighting? >> Yes. So this is what this is kind of the >> You tell your partners, hey guys, I'm
00:28:32
just going to go to Vegas for a couple days. I'll be back. >> Pretty much. Yeah. Yeah. And then um and
00:28:36
then when I got back, I told the partners, I we should do a Bitcoin payment system because Bit Pay was kind
00:28:42
of the big player back then. Uh Bit Pay just raised $4 million US in 2013. >> So they was kind of the uh the large
00:28:48
player >> actually in the employee. >> Can I tell you a very funny bit? I have
00:28:51
two Bit Pay stories. >> Sure. >> I was very focused on trying to prove
00:28:56
the transactional capability of Bitcoin. >> Yeah. >> I went to my local car dealership
00:29:02
>> and I bought a car with Bitcoin using Bitay in 201 12 or 13. Wow. >> That Range Rover is probably $90
00:29:13
million. And then even more stupidly, there was a real estate development in Lake Tahoe.
00:29:20
>> Yeah. called Martis Camp. Beautiful. And I had owned a couple of lots and I said,
00:29:24
you know, it would be great if I actually could prove that you could buy real estate with Bitcoin.
00:29:29
>> And I called the guys at Bit Pay and they were like, yeah, we can facilitate
00:29:32
this transaction. No problem. I bought a piece of land. And then again, I thought
00:29:36
this is an interesting story. And the Wall Street Journal wrote about it. And now that piece of land is a billion
00:29:41
dollars, >> but you you cannot calculate this way, right? So >> it's easy. I calculate it this way every
00:29:46
day. >> You can't calculate it that way because the stupidest purchase ever.
00:29:49
>> No. No. No, no, no. That's this that's the bucket of money mentality, right?
00:29:53
>> No, no, no. It's true. >> Right. So, even if you didn't use
00:29:55
Bitcoin, you would have used some money to some >> Exactly. >> buy the land. You could have used that
00:29:59
money to buy Bitcoin. >> Yeah. >> Right. So, Yeah. Yeah. >> So, you're like, "Hey, we should do a
00:30:03
version of BitBay." >> Yeah. Yeah. >> And your partners are like, "What are
00:30:06
you talking about?" >> Exactly. >> And now, at this point, you still hadn't
00:30:09
bought any Bitcoin. >> No. At this point, like I had like maybe one Bitcoin.
00:30:13
>> Yeah. >> Yeah. And one Bitcoin is like only a thousand bucks back then. Yeah. So,
00:30:16
Yeah. >> So, then what happens? And then so but and then so I tell my partner look I
00:30:20
think this is this is the biggest this is the biggest thing in my life right so when I think there's three fundamental
00:30:27
back then I realized there was like two fundamental technologies in my life this
00:30:30
the internet I was too young to do too much with it and there was this Bitcoin thing and I wasn't I was 35 36 I wasn't
00:30:36
going to miss it the next thing that's going to come along is going to be 15
00:30:39
years later >> you feel old when you go to Vegas and you see all these young 22 year old kids
00:30:43
and you're like I missed it did you think that at any point or >> no 35 36 is still okay. Okay. So, it's
00:30:49
still like doable. Uh you know, you don't feel super old. Today I feel that >> but I thought the next thing that that
00:30:56
will come will be 10 15 years later and with that's AI, right? So, today I say
00:31:00
like there's three fundamental technologies in my life. But back then like that's the that's the that's the
00:31:04
thing, >> right? >> So for me it was very clear I got to I got to do something in this industry,
00:31:08
>> right? >> So u and uh so I told my partners look I'm going to I'm going to I'm going to
00:31:14
quit uh and I'm going to do work in the Bitcoin industry. That's what it's
00:31:17
called back then. And then um uh and then I was I also need to buy Bitcoin and I don't have many money so um I
00:31:25
don't have so I just I said look I'm going to sell my apartment in Shanghai
00:31:29
and then buy Bitcoin but selling the apartment takes time. So it took me like a a solid few months to sell it and it
00:31:35
was it was only >> you sold it where did you just got a rental apartment? >> I sold it at uh at the time actually my
00:31:41
family also moved to Tokyo. So my family moved to Tokyo. We lived in a rental apartment. Um so
00:31:48
>> in Tokyo >> in Tokyo. Uh and then I was traveling in Shanghai. So that's kind of the time I
00:31:52
started moving started separating from uh from the from from the family as well. So I was spending a lot of time
00:31:58
traveling, >> right? >> And uh so I sold the apartment and for roughly $900,000 like just under a
00:32:05
million bucks. Um, and then started buying and I got paid in trenches because, you know, you get a first down
00:32:11
payment, you got paid in trenches and every trench I get, I just buy. The first trench at $800 and then Bitcoin is
00:32:17
dropping $600, $400. Kind of averaged to about $600. >> Incredible. Yeah. Incredible.
00:32:23
>> So now you have your Bitcoin position, but you still don't have a job.
00:32:26
>> Yeah. Well, I was looking for a job at the same time, but you were looking for
00:32:28
a job in the Bitcoin industry or you were just looking for any job >> in the Bitcoin industry. That was very
00:32:33
specific. Um, it didn't take me that long to get a job. Uh you like the gap was pro from the time I said I'm going
00:32:39
to quit until I finalized the job was probably about two to three weeks. >> Oh wow. Yeah.
00:32:43
>> And so who hired you? >> I first discussed with BTCC Bobby he wanted to hire me and then um uh but
00:32:49
then uh blockchain info came along. Uh I bumped into Roger Ver so and then he at
00:32:54
the time blockchain uh blockchain info was I was the third person to join the blockchain info team. There was a uh Ben
00:33:00
Reefs who's a founder and there was Nicholas Kerry who was just the C hired the CEO
00:33:05
>> and I was like the third guy in so I was like VP of engineering because Ben we
00:33:08
want to reserve the CO title for Ben. >> So uh uh so yeah I joined I I joined uh
00:33:14
blockchain info. I flew to uh York in London like three hours north of New uh London. Um uh I spent some time there
00:33:22
you know figuring out what to do. Yeah. >> And how did that go? >> Uh that didn't go very well. We expanded
00:33:27
the team to 18 people and then um Peter Smith joined uh as a CFO wanting to raise money for blockchain evil.
00:33:33
Coinbase just finished raising at raising around at 30 raising $30 million. Um and that was a big one in
00:33:40
the industry back then. Um Peter Smith somehow maneuvered himself into the CEO position pushing like Nicholas Kerry to
00:33:47
the product manager kind of role. Um but the culture kind of changed a little bit. So um uh I left um a bunch of the
00:33:54
developers I hired left um and then um Ben Reef Ben Reef sold quite a lot of his position also left in a few months
00:34:02
later. So that was that was my so that was only like a few I think I was only there for like uh six seven months. So
00:34:09
that didn't work out too well. Uh but I learned a lot uh from that experience.
00:34:13
>> Yeah. You learn what not to do. No, they all know like blockchain info when I
00:34:17
joined the the Baron Reeves said look we have no company we have no office everyone works remotely we just pay
00:34:23
everybody in Bitcoin and so that's something I learned from that company and I still look that's still very
00:34:29
heavily used in Binance today >> so I learned a lot I also learned that you know that company the whole
00:34:35
marketing they at the time blockchain info was the largest user platform in the industry right so they had about two
00:34:41
million wallets uh more than Coinbase at the And um uh the entire marketing was one
00:34:48
thread on bitcointtalk.org one thread. The thread is 150 pages. Um Ben Ree just replies to that thread and
00:34:55
that's how you grew to a 2 million user platform. I was like okay so you can do
00:34:59
some you can do quite a lot of guorilla marketing to be successful. >> Wow.
00:35:02
>> So I I learned a lot. U but the culture changed a little bit. it wasn't fit for
00:35:07
for me and then I I left and then that was when um uh hired me into into okay coin. Yeah.
00:35:14
So I he said look why are you working for this wallet company your experiences dealing with order execution exchanges.
00:35:21
So so he hired me there >> as a developer >> as a CTO uh >> as a CTO.
00:35:28
>> Yeah. Um so uh yeah so in the process I think BTC China helped me again.
00:35:34
Uh so you know I was kind of looking for a job again right so I left and then um
00:35:39
uh uh was talking to me and Bobby Lee found out and Bobby Lee meant so okx okay coin back then uh will offer me 5%
00:35:46
equity um and then for uh sorry uh BTC China came along and offered me 10% equity and then OKCoin matched it within
00:35:55
three hours and then I was debating between Shanghai and Beijing and I decided to go to Beijing to join OKCoin
00:36:00
back then uh Hu at that time had 1% equity Uh so she hired me to be like the the the the bigger sort of partner in
00:36:08
the business. >> Wow. >> Um so that's that's how I went to OKCoin
00:36:13
um for about 8 months or so. Um that didn't last long either. >> Yeah. Because
00:36:18
>> I think there were also culture differences um at OKCoin. Um uh there were some stuff that I didn't agree
00:36:25
with. Um both in terms of like you know simple examples like how they run promotions, how they how they do fee
00:36:32
discounts uh where you have to ask for it like they they advertise a fee discount but you have to ask for it to
00:36:37
get it. It doesn't apply to everybody even though they advertise as such. >> So small things like that. And then um
00:36:44
so yeah, so that was in early 2015 I said no I'm I'm going to leave. Um, so
00:36:51
that's kind of a uh so that lasted for a few months uh in 2015. Yeah. 2014 mostly. Yeah. So how do we get from
00:36:59
there to Binance? >> So 2015 um I I with a couple of my old colleagues said we're going to do a
00:37:06
Bitcoin exchange in um in Tokyo in Japan because this is uh a year after >> after Mount Gaus and all that. Yeah.
00:37:12
>> Yeah. So there's a vacuum in Japan. So um we got two developers that came to me
00:37:17
on the same day I decided to leave OKCoin. they came to me said look we somehow they also quit their pre
00:37:22
respective jobs. Um I said okay well why don't with the three of us do something
00:37:27
and so I we said okay so I will I will be the CEO and then I'll be the big guy
00:37:32
uh with more equity and then I'll be uh responsible for raising u I and I was
00:37:37
paying them a salary out of my own savings um and I wasn't taking anything. So the two developers uh we we whipped
00:37:44
up a demo very quickly. We downloaded an open source software for an exchange and
00:37:48
then uh we tweaked the UI to be a little bit sexier and then uh we hooked up. >> You just forked an open source project
00:37:55
like this is our this is Binance. >> No, we we didn't say it was Binance.
00:37:58
Yeah, this is before this is before Minance. >> Yeah. >> And we didn't say we I was very
00:38:02
transparent. I was like this we whipped up this demo up in two days or in a few days.
00:38:06
>> Um and this is a demo that we can show you. But this is not our >> the ultimate product. It's just it's
00:38:11
just a proof of concept just Yeah. So um it's like uh yeah so and then but and
00:38:16
then we had a script that took Bitfinex uh market data. Bitfinex was like a the large exchange back then and we just
00:38:22
kind of copy their order book and the order book was flashing there's trades
00:38:25
going on. So it was a very lively demo and when the investors saw that it was like wow this is good technology
00:38:33
but it's not just a demo it's it's it's a when they ask me questions I can
00:38:37
answer in very deep ways right when they ask me like you know how do how do you structure this to be a fast uh exchange
00:38:42
we I can talk about know in memory uh matching um uh optimizing database all all the all the stuff you've learned
00:38:50
>> yeah so I can go really deep when they ask questions right so the my my
00:38:54
knowledge is there >> right >> so they were like uh They were like, "Okay, this technology is cool, but you
00:38:58
could you won't you won't be successful running a crypto bitcoin exchange in
00:39:01
Japan. You don't speak Japanese, right?" I was like, "Okay, they have a point."
00:39:05
Um, so they said, "Why don't you sell the this technology to other exchanges
00:39:08
because most of the Japanese exchanges don't have very good technology." Um, I
00:39:12
was like, "Okay." So then I went to talk to a few of the exchanges. Like
00:39:15
literally two weeks later, we signed a contract with one of the with one of the exchanges and then they paid 30 $360,000
00:39:22
for the for the system. Uh so they made a down payment of 100 $180,000. Um that was enough for me not to pay
00:39:28
salaries anymore. So I was happy with that. So uh we pivoted from a wanting to run a our own Bitcoin exchange to a
00:39:35
exchange systems for provider. >> Yeah. You're selling software. >> Uh we we're selling software. And then
00:39:40
um in July 2015, a bunch of Chinese uh uh companies came to us saying they want systems for
00:39:47
>> Can I just say by the way, sorry to interrupt you, but it's really incredible because there are so many
00:39:52
founder stories when somebody says, "I've started a company." And then
00:39:56
somebody says, "Well, how much is it worth or how successful is it?" And you
00:39:59
know, let's just say Binance is a $200 billion company, >> probably less than that, but
00:40:04
>> it's in the neighborhood. A lot of people think that there is some incredible origin story that is like
00:40:10
lightning in a bottle. But so often than not, the story is more yours, which is this. It's kind of like moving along,
00:40:18
meandering, learning things, trying some other things, >> this non-obvious iteration, and then all
00:40:24
of a sudden >> things kind of catalyze. But even then, you still don't get the right form
00:40:30
because you're licensing it really. And people just misunderstand that this is
00:40:35
actually more what entrepreneurship is. It's the resilience and the grit to just
00:40:39
keep grinding. >> For sure. For sure. I think most most people idealize like, you know, um
00:40:44
entrepreneurship that they just hate it and they they they >> it's like the Facebook story. You hack
00:40:48
it together in college and oh it's now a million users. >> It's Facebook is is is Microsoft, right?
00:40:53
Exactly. And also Google this three are like you know college uh garage and they
00:40:57
just >> Exactly. Even but the reality Binance or Tesla it's like a grind. It's it's a
00:41:02
grind and it's a grind. >> You have to like go so many different ways >> and it wasn't obvious from the
00:41:06
beginning. >> Yeah. >> Right. So I think those three are the exceptions that kind of just hit it from
00:41:10
day one. >> Exactly. >> Um but then that kind of shaped the people's perception like 99% 99.9% of
00:41:17
other business successful businesses are not like that. >> Right. >> Right. So if you look at now any other
00:41:21
successful company. Yeah. So the same same here. >> So get us to the founding moment.
00:41:25
>> Yeah. So we did >> so you're licensing the software. >> We licensed the software. We that
00:41:29
business went pretty well. So, we've had like 30 different exchange clients.
00:41:32
>> Wait, no way. >> Like over over like >> over multiple years.
00:41:35
>> Over two years. In two years, we signed up. >> Yeah. So, this is a multi-million dollar
00:41:39
>> Oh, yeah. Yeah. >> licensing business. >> Yeah. So, and it's a SAS business,
00:41:42
right? What we call exchange as a service uh business. So, we charge a fixed monthly fee every month. And this
00:41:48
is platform business is paying us. It's very steady business. Every new client
00:41:51
we So, every new client increases the the revenue. So, every new client is like a step up.
00:41:57
>> Exactly. So it's a very actually a very very good business model. But then in
00:42:01
March 2017 uh the Chinese government shut down most of our clients. Uh and then um and then by May we're like
00:42:08
>> right and they don't touch you because you're the software vendor
00:42:10
>> with a software vendor. Exactly. We don't run any business. So with a
00:42:13
software vendor so um but then our businesses we don't we have no clients right. So uh we lost our clients and so
00:42:20
by May we were like okay we need to pivot. Um well by April May we were like figure out how to pivot. Um by end of
00:42:27
May we was like okay uh actually three guys who worked for me said they want to do a Polon next copycat. Polex was the
00:42:33
biggest uh exchange back then. Um and then I said let's let me invest. We have
00:42:38
some extra cash. Three days later they want to do some onchain chat trading software. Was like no we're not going to
00:42:43
invest in that anymore. Um and then I said well why don't we do that? We have
00:42:46
the exchange system already. Uh we still need to customize it to do a cryptoto crypto only trading.
00:42:51
>> My gosh. So in May we said okay uh we're going to do a crypto we're gonna do an
00:42:55
exchange again. Um the team said fine uh sure. >> How big is the team at this point?
00:43:01
>> 20 people. So um and we had tech people. We don't have marketing because we are
00:43:06
to be business right. We we have we have two sales guys two sales guys plus me. >> Um and then uh we said well now we can
00:43:13
run our own let's let's do our own cryptoto crypto exchange. Um so and then
00:43:18
so that was the end of May and then June 1st to June 10th uh there was a guy who
00:43:22
who was a BTC co-founder uh Link he ran an ICO in China he raised 15 million US dollars in in 10 days and with and then
00:43:32
I looked at him I was like I was like he only had a white he only had one document and one website no product
00:43:39
nothing he raised $15 million US if if he can do that I might be able to do that too
00:43:43
>> you need aded venture funding you're like if I get the $1 million. I can
00:43:46
build out a team. I can invest in some marketing. I can be in the J curve and not feel the pressure.
00:43:51
>> Exactly. Yeah. So, originally we were going to go to the VC funding route,
00:43:55
right? But then when I saw that, I was like, well, and and and everyone talking about ICOs back then. Uh I went to like
00:44:01
I went to a conference uh mid June uh 2017 and everyone was talking about ICO. Everyone's like, CZ, you got to do an
00:44:06
ICO. You got to do an ICO. So, um by mid June uh June 14th was the date. And then
00:44:12
I said, okay, called the team said we're going to do an ICO. write a white paper
00:44:16
and then by >> and so did you have a name at that point like in the Bitcoin community or in the
00:44:20
crypto community either in China or in Japan or somewhere >> I had a little bit of a name even
00:44:24
working at blockchain info uh uh quite a lot of people know me uh blockchain info
00:44:29
was the most popular platform back then right >> and OKCoin was also like I was a CTO I
00:44:33
was quite I was quite active on social media um I was also kind of managing their international markets non-English
00:44:39
speaking or non-Chinese speaking markets because nobody else I was the best English speaker on that me even though
00:44:44
my English is not that great but uh so I had a I had a little bit of a a name uh
00:44:50
uh people know uh people know me in the community >> because you needed a bit of a name or
00:44:54
some kind of pedigree to actually do an ICO at this point. >> Yeah. Yeah. Yeah. So, but this is a
00:44:58
advantage of when you get involved early in the industry like you go to a few conferences like there's 200 people and
00:45:03
you go to like by the second time you go there people know you right >> but the third time is people like oh you
00:45:07
know >> you're the expert already right so u so I had a I had I had a bit of a
00:45:12
reputation uh so I thought that link quite the guy who did the ICO in China he's quite well known in China but he's
00:45:19
not known internationally I have a little bit of both so I said well I can probably do an ICO and raise the same
00:45:25
amount so we Uh, and um, >> so who are the buyers of the Binance ICO? >> To be honest, even to this day, I don't
00:45:32
know. >> Even to this day, you don't know, >> right? It's like I think,
00:45:34
>> but are they Chinese? Are they Japanese? Are they people from all around the
00:45:38
world that kind of knew you? Was it that your white paper was really good? >> Okay. So, I think in terms of
00:45:43
demographic, it's probably like 80 the ICO purchases were probably 80 80 to 90%
00:45:48
Chinese. And there were some like international guys who who bought it. Uh, and I think the data shows that
00:45:53
there was about 20 20,000 people who bought in the ICO. >> 20,000 people. >> 20,000 people. So, and this is like a
00:45:59
brand new brand. Uh, some people know me in the industry and that was it. >> So, even though the exchanges were put
00:46:06
out of business in China, >> yeah, >> the ICO was allowed. >> No, the ICO wasn't banned back then.
00:46:11
>> Wasn't banned. >> Yeah. >> It was not not allowed. >> It was not not allowed. Exactly. So, let
00:46:15
me let me let me let me just make one clarification. The exchange clients that that we were serving were mostly stamp
00:46:22
uh cultures exchanges, not crypto exchanges. Okay. >> Crypto exchanges were not banned in
00:46:26
March. Crypto exchanges were banned after we started. >> I see. >> So uh that was in September. We're
00:46:31
talking about like June, July kind of 2017. >> Wow. You're really threading a needle.
00:46:35
>> Yeah. Yeah. So I we didn't know that that B was coming. We just thought like
00:46:38
you know those >> How much of the company did you sell? >> No, we didn't have we we just the coins.
00:46:43
>> We launched the token. >> You had to do no equity participation. There's no there's no equity that
00:46:46
there's no equity uh involved. So we just we launched a new token B&B is
00:46:50
still there today >> and then we said look we're going to sell uh we're going to sell 60% of it
00:46:54
for $15 million >> roughly. Right. So uh because we're tokening bitcoins
00:46:59
>> and what were the original tokconomics that you designed for the B&B token?
00:47:02
>> Well, we said a bunch of things but the main one that was going to be live very
00:47:05
quickly was going to be uh if you hold B&B you receive 50% fee discounts when
00:47:09
you trade on Binance eventually the platform that gets launched. Um, that was the main thing. But we also said,
00:47:14
look, it's going to be a it's going to have eventually it's going to have its
00:47:17
own chain, it own decentralized ecosystem. There's like three or four things.
00:47:21
>> So then you guys must have been ecstatic. You're like, wow, we raised 15
00:47:24
million bucks. We're now going to launch this exchange. But then September comes
00:47:27
around and then exchanges themselves. So then what do you do? >> Yeah. September comes around. September
00:47:32
4th, the like seven different departments of Chinese government issued a memo together saying that number one
00:47:38
exch crypto exchanges are no longer allowed in China. ICOs are no longer allowed. Mining is not allowed, crypto
00:47:44
mining. Uh we said, well, we're gonna move. Well, we said uh we have to move.
00:47:49
Uh by then it was clear that even while at the time China was one of the do the the largest user base, uh they have like
00:47:56
30 something% user base from China, but we still have like 70% from the rest of the world. We said, look, if we cut off
00:48:02
that 30%, we can still survive. We can we can we actually survive pretty well. >> Yeah. Um, so we said, well, I just said,
00:48:08
"Look, let's move. Let's move. Uh, let's move to Tokyo." >> Back to Tokyo.
00:48:12
>> Back to Tokyo, right? >> You love Tokyo. >> I I I've been I've been back in and out
00:48:15
of Tokyo. I know it. >> And by the way, at that point, do you speak Japanese as well?
00:48:19
>> I speak very little Japanese. Uh what I call taxi Japanese. I can I can say
00:48:23
like, "No, thank you. Go left, go right." In a restaurant, I when I order,
00:48:27
I say this, this, this, not the not the full menu names. >> Yeah. >> Sushi, I can name most of them.
00:48:33
>> Okay. >> Yeah. So, that's my Japanese level. But you know I know Japan, I know Tokyo. It
00:48:37
wasn't it's not like a new country for me, right? So I said like let's move to
00:48:40
Tokyo. And we had like 30 people then, right? So >> and everybody moved. >> Everybody moved.
00:48:46
>> Wow. >> Back then um eight years ago I think very like maybe one or two of the people
00:48:51
were married. Uh and nobody had kids. Uh so it was like a very easy move for the
00:48:56
team. >> Yeah. Uh so it's everybody just packed up and moved. I remember one girl cried,
00:49:01
one product manager, she cried because her her boyfriend is in is in China. So she cried but she moved with us and u
00:49:07
she's not married to her boyfriend. So anyway, >> incredible. >> So yeah, so we moved to Tokyo like u
00:49:14
when China did that um and uh our platform continue to grow. Yeah. >> So when you first launched Binance, was
00:49:20
it an instant hit or did it take energy to find that product market fit? at first few zealous users that would tell
00:49:28
everybody else like how did the verality start? How did the liquidity really get
00:49:31
built? >> So, Binance I would say the product was growing pretty well but the token price
00:49:36
went down uh from ICO price it went down 30 40%. It took about 3 weeks to recover. Uh so, uh when we launched the
00:49:44
product uh because at that time crypto is still pretty hot. I think we the product market fit was there. Um it
00:49:49
wasn't a new idea. It's just a cryptoto crypto exchange. So then the ICO was
00:49:53
critical then, right? Because these people say, "Well, I own this token now.
00:49:56
I can trade at a fee discount." >> Yeah. >> So that's why I'm going to choose
00:50:00
Binance. >> Yeah. >> But was it also architected better? Was it materially faster or more reliable?
00:50:06
>> Yeah. Yeah. For sure >> it was. >> It was. So back then uh when we launched
00:50:10
you can even even using your eyeballs, you can see that placing an order on Binance is so much faster than on
00:50:15
competing platform. >> And so the performance of of the exchange system was visible. Back then
00:50:20
2017, who were the big platforms that you were competing with? >> There was Polonex, Bitrex were the
00:50:24
biggest ones and then there's a few Chinese ones. There's Hobi, OKX, uh,
00:50:27
OKCoin back then. Um, and then in the Western world, Coinbase was there. Um, Gemini was Gemini wasn't there back
00:50:35
then. Um, Gemini was later. Um, so Bitstamp was there. Uh, Bitfinex was there. Um, now they're kind of really
00:50:42
really small. >> So you're now in your late 30s. >> Yeah. Yeah. >> And this thing is working.
00:50:46
>> 40s now. >> 40s, sorry. 40s. How did you internalize the success? You're like, "What is
00:50:54
this?" Like, "What what's happening?" Like, "Are you saying that to yourself
00:50:56
or >> Yeah, there were some really surreal moments where you were like, is this
00:51:01
real?" >> Yeah. >> In a good way. Said like, "How like what's our revenue?"
00:51:05
>> She I forgot the number, but she said like a couple a couple hundred bitcoins.
00:51:09
Like, that's crazy. We can't be making like are you sure? She's like, "Yeah,
00:51:12
we're sure." Like, "No, this number can't be correct. We must be off by like
00:51:16
a magnitude." And we double check, double check, triple check like correct.
00:51:19
I was like, that's crazy. And then there was also a period where three weeks in
00:51:24
uh when the B&B price was recovering. So B&B ICOed at like about 10 cents. It
00:51:29
dropped to like 0.0 uh up dropped to 6 cents. And then um uh Hi join, we announced Hi joining and then for the
00:51:37
next two three weeks um every time I you know you go to sleep, you wake up the token is up 20%. You go to a meeting
00:51:44
come up the token up 20%. You go to the bathroom, come back, and tokens up 20%. >> I mean, it must have been very quick
00:51:50
where you're like, wait a minute, I'm rich. >> That came a little bit later. That came
00:51:55
in early 2018, about six, seven, seven, eight months in. Forbes put me on the cover.
00:52:02
>> Uh, that's when like, well, I said, well, >> how did they even know to find you at
00:52:05
that time to put you on the cover? >> I actually don't know, but Forbes was
00:52:08
doing a crypto edition. I see. So with all the crypto guys and then um they already had a picture of Italic doing a
00:52:14
fancy hand gesture which is really cool picture. So um yeah so uh yeah so they they invited us they they contacted our
00:52:22
PR department which maintains contact with them uh which is really team back then um like team of four or five girls
00:52:30
um and H says like well Forbes want to do a special feature with you and take some photos I think you should go. I was
00:52:36
like, I don't want to go. But I said, we're a new brand. Forbes can still help
00:52:39
us, you know, uh, increase the brand >> with awareness. Yeah. >> Yeah. Yeah. So, I said, okay, fine. I'll
00:52:43
go. So, I went to do the photo shoot. That was like my first photo like to put makeup on me and then the first time put
00:52:50
makeup. >> Cy, what is what is money? >> Well, is it important? I mean, don't
00:52:55
take this wrong way, but >> you got rich old. >> Yeah. Yeah. >> So, did it matter at that point? What is
00:53:01
money when you're in your 40s and you make it? >> It still matter. Uh, but money is not
00:53:04
everything. I think I was old enough that there's a couple things that happened to me. Number one is I was
00:53:09
older as like 40ome. So I'm not like a young 20-year-old that just you know Lambos, big parties.
00:53:16
>> Too old for that. Uh so I have also my personality is quite stable. So I don't
00:53:20
get too excited on things. >> Um also the other thing not to brag but uh I went from like a barely financially
00:53:27
free to like know cover forbes and I was like wait a second like how how how rich
00:53:32
am I? I don't even know. I don't like when I look at my wallet nothing changed
00:53:35
like Forbes Carver nothing changed for me. Um but then people say look now you might be a billionaire. I was like am I
00:53:40
really a billionaire? Like it doesn't feel that way. I was like even like a month ago like not a month like at that
00:53:46
time when when we fled well when we left China to go to Japan uh I booked economy
00:53:52
classes for a redeye flight and he was like no maybe we should upgrade to a business class so we can lay down and
00:53:58
sleep. Okay that makes sense. That's you know so like I have those kind of habits. So uh when you make money
00:54:04
successively like you know you from one from 1 million you become 10 million you
00:54:08
might want to buy some fancy cars from to 100 million you might want to buy a you know some yacht or something to a
00:54:13
billion then you have I didn't go through that stepwise process. I just went from like a relatively okay kind of
00:54:19
thing to like you're on the cover of Forbes. >> Yeah. >> So um and so I didn't develop quite a
00:54:24
lot of those habits. >> What does it what does it mean now? Now, I mean, depending on the day,
00:54:30
>> yeah, >> you're a deca billionaire or a centiionaire. What does it all mean?
00:54:34
>> I it doesn't mean very much to me. I think money is two things. Number one,
00:54:37
you you have to take care of yourself. You have to have food, shelter, you know,
00:54:41
>> which is very minimal amount of money. >> Very minimal. Like you don't need that
00:54:44
much for that. >> Yeah. People can confuse themselves and create all kinds of complexity, but it
00:54:48
doesn't take much. >> It doesn't take much. Um, so that I for sure have. So, I have I have a very I
00:54:53
don't have a luxury life, but I have a very comfortable life, I think. Um, and
00:54:57
then the other >> Sorry, what does that mean? >> If you look at my house, my my house
00:55:01
like the living room water leaks every month or so because the the house is too so old. But that's the house that has
00:55:07
that's the right size for me at right now. Um, no, it's not. We'll just fix it
00:55:12
whenever it leaks. U, so that that still happens like that happened a month ago.
00:55:16
So like people think I live in a very fancy house, you know, all this other craz,
00:55:21
you know, it kind of fits all my family members. Yeah. >> Um, but it's not a it's a old house uh
00:55:25
that I bought third or fourth hand, but it's it's in the right location. It
00:55:30
works for me. It's in the right location. It's functional. Um, things break once in a while. It's fine.
00:55:34
>> Would you say it's because you're practical or is it just because you're
00:55:38
just not moved by >> I'm function driven. >> You're function driven.
00:55:43
>> If it functions, I'm okay. I I don't care about the fanciness. I don't care
00:55:46
about style. I don't care about colors. I don't care about glitting gold. And if
00:55:50
it's functional, I'm okay. >> Right. So, uh, if it if it solves the
00:55:53
problem, I'm good. >> Do you ever have bouts of insecurity? >> Uh,
00:56:00
not really. I'm I I know my weaknesses, so and I learned to deal with it. So,
00:56:05
uh, I'm not I hope I'm not super arrogant. Uh, so I don't think I'm
00:56:10
arrogant. >> I've only gotten to know you in the last couple years. >> Yeah. I saw videos of you, I think it
00:56:15
was in the late teens, early 2000s, and my immediate reaction because that's
00:56:21
always been my struggle is sort of these bouts of insecurity, ego. I thought, man, this guy's really calm.
00:56:27
>> Yeah. I'm I'm I'm calm. >> Yeah. So, I described this way.
00:56:32
>> Very well reggulated, very self-aware, it seems. >> Yeah. Other people's emotions may go
00:56:36
like this like happy, sad, happy. I'll feel happy, sad, happy, sad. But my ampl
00:56:40
amplitude, >> the amplitude is very moderated >> is narrower. Yeah. Right. Yeah. So,
00:56:44
>> so it just allows you to manage in many ways. I mean, success is somewhat
00:56:49
illusurary. If you're like working on a problem, nobody knows the toil. >> Yeah. Yeah. Yeah.
00:56:53
>> Nobody really wants to hear about the toil. They want to have a very simple
00:56:56
way of pointing to something and say, "Oh, wow. Look at what you have." But if
00:57:00
you're working and you have no time to enjoy it, >> nobody understands that, you know. Yeah.
00:57:04
>> Okay. So, you launched this thing, it's going bananas, but there were some
00:57:08
hiccups. >> Yep. >> Do you think that you got too addicted to the growth at any
00:57:16
point? >> I wouldn't say I was addicted to the growth, but I was addicted to the work.
00:57:20
>> Okay. >> The work was actually very satisfying, very rewarding. But, what was the
00:57:24
average day for you? What were you trying to do? I was basically doing like 20 plus meetings a day like scheduled
00:57:31
calls or meetings and then plus other random stuff and then having to respond to people on Twitter and uh stuff. So um
00:57:38
but it was very rewarding because um it's there's a sense of fulfillment that
00:57:42
is very hard to describe. It's not the money, it's not the growth. >> Yeah.
00:57:45
>> Uh it's uh you know >> so what Yeah. What was it when you were
00:57:48
running Binance? I don't know if you do this, but some sometimes people fixate on the leading
00:57:55
indicator like revenue is a lagging indicator, right? Revenue and profits are just they're here. That's from six
00:58:00
months ago, a year ago. >> Yeah. >> Manifest today. What was your leading
00:58:04
indicators? What were the north stars that you really cared about that said this is the health of the system?
00:58:09
>> Yeah. Yeah. I think it's really daily active users. It's not trading volume.
00:58:12
It's not revenue. Why DAO versus those other things? I think as long as you keep helping serving more users um then
00:58:19
you're you give them value. So I believe a product is valuable when people want
00:58:24
to use it. >> So the more people who wants to use it even if your revenue is zero you have
00:58:29
you have value. So any product that people use the more people you use it the higher value right? So that's kind
00:58:35
of always my philosophy. Whereas uh you you can optimize for revenue, you can optimize for profit shortterm and
00:58:43
you can lose the long-term growth. But I believe long-term if you have a large number of people using your platform,
00:58:47
that's where you create value. Not just for yourself, you also create value for
00:58:50
your users. People choose to use you because there's a value in using you, right? So that's kind of my my my
00:58:56
northstar. And >> also knowing that related to that was knowing that hundreds of millions of
00:59:01
people are using us, we help them, right? So the way I view is if they pay like you know a commission fee that
00:59:07
they're willing to pay because we we we must have given them some higher value.
00:59:10
>> One of the double-edged sword of the DAO >> is that some of those DAO are
00:59:18
bad actors. >> Yep. >> When was the first inkling that you had that that may be a problem and that you
00:59:25
have to take that seriously? >> It was like I think >> what does that first meeting look like
00:59:29
where they're like CZ I have good news and bad news. >> Yeah. Yeah. I there's actually a very
00:59:34
clear point. I think it was like Christmas day January 1st or like you know New Year day January 1st 2018. So
00:59:40
this is like six five months after you know we we were kind of large uh well or five months after we started and we're
00:59:45
kind of we were number one uh exchange already on that New Year's Eve uh December 31stish uh 2017 a US Homeland
00:59:53
Security guy reached out to me. Um his name I think is Joseph. Um I always remember his name is Patrick or Joseph.
01:00:00
I'm not sure which one. >> Okay. um he wrote an email and then I got the email and said like well he
01:00:05
wants to he wants our help to help track some hackers who may have moved funds of
01:00:09
the Ether Delta hack. Either Delta was a decentralized exchange back in 2017 that
01:00:13
got hacked that went down. Um so this guy who works for the US government uh emailed us and I I didn't know how to
01:00:20
deal with it. Nobody on our team knows how to deal with law enforcement. So um I you know got a couple guys to huddle
01:00:27
up together say how how do we help this guy? Uh and then we gave the information
01:00:31
that he requested. We verified who first we had to verify who he was. And then um
01:00:36
uh and then afterwards he thanked us uh and then I said, "Hey, um Joseph, can
01:00:41
you recommend somebody that we could hire that can interface with law enforcement in the future?" He
01:00:46
recommended someone, but it the guy was based in the US and we don't have a US
01:00:49
entity. We we couldn't hire anybody in the US back then. So we kind of had to
01:00:52
let that go. But that was the point. It was like um New Year's Day. Uh I actually remember
01:00:57
>> where you were like this is going to happen more >> obviously >> invariably of large numbers.
01:01:02
>> Yeah. Yeah. So that that's the day when I realized okay look we need to we need
01:01:05
we need to have somebody who has experience working with law enforcement >> and so what did you do?
01:01:09
>> So we we eventually hired we hired more guys. Yeah. >> Okay. Yeah.
01:01:13
>> Obviously like you're not looking at the transactions. So you wouldn't know. But
01:01:17
if we fast forward a little bit, the claims that then the US government under President Biden made at you
01:01:25
was essentially that people like Hamas or people like other organizations were using Binance and you didn't do enough.
01:01:33
>> Yeah. So uh on this point I may have some legal restrictions on what I can
01:01:37
say and cannot say about know the plea the etc. So I I'm not a lawyer but I'm I
01:01:42
try to stay very clear from that. But overall though, I would just say um the Biden administration overall is quite
01:01:48
hostile to crypto. I mean they openly announced war on crypto. Yeah. Right. So uh it's good to see this new
01:01:53
administration change 180 degrees. I think that's this is good for America. >> Yeah.
01:01:57
>> Uh this is good for the world. >> Yeah. >> So uh I think it was I wouldn't blame
01:02:01
the previous administration, but I think they just didn't understand. >> Why do you think that they were so
01:02:05
hostile to it? >> It's fear of the new as that as simple as that. uh I think they probably in
01:02:12
their heads uh there's some degree of let's not disrupt the current financial
01:02:16
system the banks whoever else um there's probably a lot of lobbying from those
01:02:21
industries as well to them so that kind of brainwash or affect the thinking however you call it
01:02:26
>> so that's human nature I mean if you think about it it's understandable it's
01:02:30
not ideal but uh it's understandable >> so you're running the exchange things
01:02:34
are going well from 2018 2019 2020 >> it's kind of like you're really coming
01:02:40
into your own. >> Yeah. Yeah. Yeah. >> You eventually opened a US entity.
01:02:44
>> Uh yeah, in 2019. Yeah. >> And why did you feel the need to do that?
01:02:47
>> So 2019 there was some news about no US governments basically in my layman words
01:02:52
chasing BitMax. There was some Big Mac in the news. Uh there were some also Bitfinex stuff in the news. Uh I think
01:02:57
the US government frozen froze at least the Poland government froze like six to $800 million of their assets when their
01:03:04
market cap was >> only like four billion. That's like a large chunk. And then they got sued
01:03:09
later on by the US government saying that they don't have enough reserves. >> Yeah.
01:03:13
>> So we saw those news and we're like okay well the US government is looking at
01:03:16
this industry and we better register and you know again I asked my friends my many of them have legal backgrounds and
01:03:24
then they sort of general consensus was okay we got to we we should operate in a
01:03:29
registered faction in the US. So this is 2019. Um so we registered Binance US and
01:03:35
um it's a separate entities. It's a separate deployment. Uh it's a separate
01:03:39
matching engine, separate liquidity. So and Binance US has been regulated from day one. Yeah.
01:03:45
>> 2019, 2020, 2021 things are just generally working. >> Generally. Generally. Yeah. Yeah.
01:03:52
>> Then you start to see some of these other folks start to pick up steam. SPF
01:03:58
and FTX start to really Tell me about that. Um uh >> how did you meet him? Because you ended
01:04:04
up owning a lot of the equity. >> Yeah. Yeah. So well we we we invested in
01:04:08
them only 20% as equity at some point and then we exited a year a year later. Yeah. Um we didn't we didn't stay there
01:04:14
for very long. >> Uh I think I'm first met him in January 2019 in one of the Singapore conferences
01:04:21
Binance organized. >> I think at the time FDX did not exist. uh uh Sam uh Bankerman Freed SBF was
01:04:28
running um Alamea and they hosted an afterparty in the S uh Singapore uh aquarium uh on Sentosa and they had
01:04:37
divers in the fish tank you know holding a sign with etc. So they were they were
01:04:41
like a VIP client they were like a large trader on Binance so we're friendly to
01:04:45
them. >> Yeah. Right. >> Yeah. So that was in January 2019 and then a couple months later they came to
01:04:50
us saying look they want to start a futures platform. They proposed a futures platform uh some kind of a JV uh
01:04:56
that I I can't remember exactly but I think they proposed 6040 in our favor.
01:05:01
Uh we we want I thought about countering propos like we have we had all the users
01:05:04
they don't have anything back then. I thought about counterproposing like 955
01:05:09
but I don't think that was very polite. They're still like a trader. They still
01:05:11
like a VIP client. >> So we declined that. We said no. Um >> because they were a crucial part of the
01:05:17
liquidity pool. >> Uh not a crucial part. They're a large trader but you know Binance they they
01:05:22
were new too. They they it wasn't like they were there for like many years. >> Okay.
01:05:25
>> They were only there for like know probably six months or a year. I don't
01:05:28
know the exact uh dates. >> Um and then uh uh mid like a little bit later they came back with a better
01:05:35
offer. Said look we uh uh like in summer they came back with a better offer. We still said no. Um and then in in
01:05:42
November they came back said okay look we're going to offer you this really really attractive offer. But then FTX
01:05:47
was launched. Have some volume. and they said look we're going to give we're
01:05:49
going to basically give you 20% at this at this price and there was a swap of tokens B&B versus u FT tokens so that's
01:05:57
we got some initial uh FT tokens at the time B&B tokens are much more liquid and
01:06:02
FT tokens are less liquid so um we done that deal and then um almost as soon as we did that deal I keep hearing from my
01:06:09
friends like you know SBF badmouthing us in the Washington circles in the US etc.
01:06:14
I was like, "Come on." And then um they also did some other stuff which which is
01:06:18
kind of annoying. Uh they they pay five times salary uh of to our VIP uh uh account managers uh that had access to
01:06:27
our VIP database and then so that girl goes goes working for we if we match that girl then we have to 5x everybody.
01:06:34
So like okay you you go work for them and then >> the day after the girl go works for them
01:06:39
our VIP clients gets called saying look they going to get a better rate on FTX etc. Like so I called Sam said like can
01:06:45
you stop doing this? We're like we're your shareholder at the same time he's
01:06:49
like look see like can we do a onetoone panel on a crypto event right so fine and we're an investor we want we want to
01:06:57
help promote it. I actually want multiple exchanges to be to be successful in the industry because then
01:07:02
we wouldn't be the ones that get targeted all the time. >> Yeah. >> But there was always like no I always
01:07:07
keep hearing there was some bad mouthing some other this and that. So a year later, I think it was mid early 2021, we
01:07:17
said uh and they were they were claiming to be like raising money at you know 32
01:07:21
billion valuations. We're like, well, why don't we exit actually? So, in our
01:07:27
investment clause, we had veto rights on any future rounds, right? So, if you want to block them, we could. I didn't
01:07:32
want to use that to block them. Uh >> oh, wow. >> So, I was like, you know, even if why
01:07:37
don't we just exit and we can compete, >> right? So um and then we thought we we
01:07:42
talked about exit and then we exited I think in if I remember correctly it was in July the deal was finalized and the
01:07:48
transfer was done in July 2021 and this is like a full a full year and a half before they had issues at the time we
01:07:55
didn't know >> right because there was some rumors that a lot of their issues started after you
01:08:01
sold and they were somehow conjoined. I'm sure you've heard of that but you
01:08:05
can put all of that to bed. >> Yeah. So that's categorically not true.
01:08:09
And also because of the competitive nature in the businesses, even though we're a shareholder, I never really I
01:08:14
never ask them for for financial statements. >> Oh wow. >> So I just, you know, I just didn't ask
01:08:18
for it. I'm a very passive investor. So when I invest, I don't get involved in
01:08:22
their business. >> Yeah. >> Um and they also they're slightly competitive. We have we had a futures
01:08:26
platform. They had they have a futures platform. So I try to stay no let them do their thing.
01:08:31
>> So post this the thing with the FTX thing that most people talk about are a
01:08:35
couple things. One was the way in which the restitution happened was suboptimal to some of the holders of of FTX people
01:08:44
who had cash money there. The other thing that people talk about is the value of some of these investments post.
01:08:52
>> What do you think in the aftermath of all of this? It says anything at all
01:08:57
about the industry or >> um I don't crypto in general or Yeah. I don't understand the whole uh bankruptcy
01:09:05
process whether that's fair or not. Um I read a lot of different things online.
01:09:08
Also um just to be transparent, there's an ongoing lawsuit between the state and
01:09:13
us. they want to try to claw back some of the money that we got like a year and a half before,
01:09:18
>> right? >> So there's probably limited stuff I can comment on that.
01:09:21
>> Um, yeah, but again, I'm not an expert there, but I did hear some complaints
01:09:25
about, you know, some Chinese users not allegible, etc., etc., but now from what
01:09:29
I read is the the because of their appreciation of crypto now in US dollar terms, uh, they have enough uh, right?
01:09:37
>> Even though if people held crypto back then, they probably have gotten more. I
01:09:41
don't know what the deal is. When did things at Binance start to get complicated for you?
01:09:48
>> You mean with the US governments, right? >> Yeah. >> For me like uh they started asking for
01:09:53
information the information requests which we always comply, right? So that was like 2021 2022ish
01:10:01
and it was like uh late 2022 it was getting more hostile. Um, and then I think in early 2023 was more clear that
01:10:09
they were making uh they were uh we either reach a deal of some kind or they're going to indict us or stuff like
01:10:14
that. There was like it became negotiations. How do you deal with that as a person? Do you think I can't
01:10:19
believe this is happening? Like when you're in this meeting and your lawyers
01:10:22
or whoever it is are telling you, hey CZ, I think there's going to be an indictment.
01:10:26
>> Yeah. >> I don't How does that meeting go? >> So, uh, number one, I'm not a legal
01:10:31
background, so I had to rely on a lot of other people's advice. That's generally
01:10:34
the harder part for me because I don't have experience there like no no one has
01:10:38
experience going through this. You go through this once you never want to touch it again. Right. So um so no one
01:10:44
really on on the receiving end have any experience. Um you have a bunch of lawyers and the lawyers are the lawyers
01:10:50
I think are good but how you organize lawyers actually is quite tricky. If we hire a bunch of expensive lawyers, they
01:10:55
all have different specialties and they all have different opinions >> and they all want to seem like the
01:10:59
smartest person that's driving the decision >> and also they they all want to take a
01:11:03
lot of time to analyze. They get paid by more time they spend. Um I'm not saying
01:11:06
that they're unethical. They they want to do a really good job. >> Um but then they go in all kind of
01:11:11
different tangents. Um so you get dragged in a lot of different different places. That was the most troublesome
01:11:15
part for me. If somebody told me like this are the three things you got to focus on this is you know you got to
01:11:20
this strategy. We also didn't have a strong legal team. Uh our team is young.
01:11:25
Uh we we our our legal team didn't have this type of experience dealing dealing
01:11:30
with this type of uh uh uh issues. So that was always tricky. But I kind of look at when I come by the way where was
01:11:37
the entire team at this point still >> this we're all spread out >> now. You're everywhere.
01:11:41
>> We're now we're everywhere. We're spread out. And I think I 2023 I was in Dubai.
01:11:45
Uh I was in Abu Dhabi Dubai split in time. So um yeah it it was very stressful um but the way I deal with
01:11:53
stress is I just look at the best and worst case scenarios right so um say asked team what's the best case scenario
01:11:59
okay you pay a fine you get a you know you get a DPA or then this this thing's
01:12:03
over then okay so that's the best case and then the worst case okay so they were going to ask you to they're going
01:12:09
to try to put you in jail um stuff like that >> was that the worst case though because
01:12:13
at the time it seemed like the fact pattern was folks would get some sort of probation or
01:12:19
>> that would be the worst worst case but also uh yeah so performing nobody got
01:12:22
put in jail but they they could ask for it. >> Yeah. Right. Right. Right. There's
01:12:26
actually another worst case which is you fight it and then you if you if you come
01:12:31
if you can't agree on a term you fight it and you stay in the UAE which is a
01:12:35
non-extradition country and you know and now you have citizenship and so they there's almost zero chance you'll get
01:12:42
extradited but then your travel is going to be limited anytime if if you cross to
01:12:46
a different country even if that country is a non-extragene country that can still be a chance that there's a deal
01:12:51
being made right it's kind of leaving fear so >> plus it also creates complexity just at
01:12:56
governmentto government level if folks are allies and it just it just creates a lot of noise
01:13:00
>> it creates a lot of noise it also creates a lot of pressure for the UAE
01:13:03
government potentially I don't want to trouble people who gave me a citizenship
01:13:07
>> I don't want to be the trouble causer >> right >> right so um and uh so but you know there
01:13:12
are the the worst case scenario is like you know you don't go there they indict
01:13:16
you and then you they put you on the red notice list >> um stuff like that right so that those
01:13:20
you know those those are potential possibilities yeah so how did you resolve It took like the negotiations
01:13:26
like was basically daily calls with with like 12 20 lawyers on call for like more
01:13:32
than a year. >> Uh more than a year more than a year >> of back and forth with the president
01:13:36
Biden DOJ >> the president Biden DOJ and and the most common thing I hear from my lawyers is
01:13:42
we have never seen them this hostile on a case like this. >> Right. We have never seen this before.
01:13:47
This is this like that's the most common phrase my I've heard. At some point you
01:13:50
just become desensitized to it or do you keep internalizing it, personalizing it?
01:13:54
You think why is this happening to me? No resentment or just more how did you deal with it? I'm just
01:13:59
>> It takes it takes successive steps and there were a couple steps which are
01:14:03
really hard to take. Um the step where you say look in the negotiations right they come to a few points where you say
01:14:09
look we just we're just going to have to say no. Um and it's like look we just
01:14:13
can't agree to that deal. They wouldn't back off and I couldn't agree to that
01:14:16
deal. We just have to say no. And then there was a couple weeks that lapse and you don't know what's going to happen.
01:14:22
So you >> purgatory. So you could get indicted in they can indict you any moment, right?
01:14:26
So that's their choice. You you you already said no to that to that. There were like a couple periods of like that
01:14:32
and then oh my god in those in those couple weeks you're like you're mentally
01:14:35
thinking okay >> I can't travel anywhere. Um so I I might have to get used to this life of just
01:14:41
living in one country and be very careful etc. there might be some sealed indictment that that's not public the at
01:14:48
any border that you cross and u interestingly they come back after two weeks and they say okay we can negotiate
01:14:53
again and then you're like what do you think is happening over there >> well no I think that's a now looking
01:14:59
back that's a very that's a very useful negotiation tactic for me or for anybody
01:15:04
in my situation for >> the silence >> uh yeah the silence for anybody who's
01:15:08
going through this on the receiving end you only go through this once you're not
01:15:12
experienced this is your life I mean there could be a red sealed red notice against you um and this is the life they
01:15:18
have to deal with going forever and they don't like this thing these things can
01:15:22
stay there for like decades for them they do this every day this is like this is their daily job right so and but they
01:15:28
I think they're smart enough that they know two weeks is about the optimum time
01:15:31
because longer than that you really get used to it and when they come back to negotiate you're going to say no right
01:15:36
it's like look I'm already used to this >> right so like if you leave the guy in
01:15:40
the situation for too long >> interesting interesting >> so so they're very skilled in this type
01:15:44
of uh mental uh uh uh work, >> right? Whereas Yeah. So, there were some really tough periods and for this type
01:15:50
of stuff, you don't get used to it. Um you it's it's mentally challenging. How
01:15:55
did you get yourself to a place to agree to the final terms? >> After a lot of negotiations, we're like,
01:16:01
okay, um basically said, okay, I validated a single uh single charge of a banking secrecy violation, which is a
01:16:08
registration failure, which is a federal crime. It's it's serious. Uh but no one
01:16:11
went to jail for this in history. Um and um there's no there's no uh >> sorry that charge that's more technical.
01:16:18
How does that relate to the perception of what was in the media at least in America which is money laundering and
01:16:26
aiding at abetting folks and not doing KYC and not doing AML versus the actual charge. Are those two things connected
01:16:33
and they're equal or these are sort of disjoint >> perception versus the actual specifics?
01:16:38
>> Sure. I can try to explain my understanding. I'm not a lawyer. So I
01:16:41
want to make a small disclaimer here. Um this is my layman understanding could be
01:16:44
wrong. >> Uh there's a first my understanding there's a first level is like banking
01:16:49
secrecy act violation which is a failure to register. Basically you serviced we service US users without register as a
01:16:54
financial services company in the US. >> So that's a you thing that has nothing
01:16:57
to do with the user themselves doing anything nefarious or bad. >> No, you did not register with the proper
01:17:02
authorities to say I'm going to take on US customs. >> And so that's number one, right? So that
01:17:07
that that's the bait that's the kind of bait layer. Okay. On top of that you can
01:17:10
say look you didn't have adequate KYC AML procedures. So your all your procedures are not strong enough. Um so
01:17:17
uh uh so that's another that's another level which even even if you're not
01:17:21
registered you're also supposed to have good KYC etc. AML procedures. Um and
01:17:27
those things are not and those things people think that's a black and white thing. In reality it's not. Uh it's how
01:17:33
well you do it. Uh which systems do you use? what how do you do this? >> How many people do you have? What's your
01:17:37
standard operating procedures? Yeah. >> Yeah. So there's actually a lot of
01:17:40
details and then like uh quite a bit above that in my understanding is if you have somehow known and facilitated uh
01:17:48
bad transactions. So you can have a weak AL pro AML program and that didn't catch
01:17:53
all the bad players but you you don't know that. >> Right. So it's not like you're
01:17:56
intentionally facilitating that. >> It's not robust. >> It's not robust.
01:17:59
>> It's relatively naive but it's there. >> Yeah. versus this is I know this to be
01:18:04
bad and I'm enabling it to happen regardless. >> Yeah. Right. >> And there's the next level which you
01:18:09
personally handling the transactions. >> Right. >> Right. So which is you know uh you know
01:18:13
Charlie Charlie Shramm handled uh transactions for Silk Road for for Ross. Right. So that's how you know so there's
01:18:19
different levels. I don't handle any transactions at all my myself. That's
01:18:23
just not my thing. I just don't do it. And so they said okay Binance number one
01:18:27
we didn't register KYC ML is weak. Uh so that those are things we can fine we can
01:18:32
agree on that >> layer one layer two. >> Yeah. So we can agree on that for those
01:18:35
single charges without any other additional stuff. No one ever went to jail in US history even till today.
01:18:41
Right. So u uh and then the government uh we couldn't agree on the two addition
01:18:46
the government want to add two additional charges they call enhancements the three and four. The
01:18:50
three and four they said somehow I personally facilitated but they couldn't provide any evidence. They were trying
01:18:54
to lean on the company somehow something happened in the company you know etc. they were trying to use. Were they able
01:18:59
to point to a transaction or some >> No, they wasn't. So this two enhancements the court outright rejected
01:19:05
but we decided to we before I went to the US we said we agreed that we will argue that in court right um and also
01:19:12
based on I don't want to get into the sort of privileged conversations but like the understanding I went before I
01:19:17
went was no one went to jail the worst uh guy who got punished was author Hayes of Bitmax he got six months of home
01:19:24
confinement uh for run for for Bitmax and uh when I look at that case he had much more direct interactions with
01:19:31
clients whereas I had much less direction. I basically I don't deal with clients at
01:19:36
Binance. I deal with users on Twitter but not like you know the Bance back end kind of thing.
01:19:41
>> So I felt pretty confident that you know we should be in a fairly strong position
01:19:45
and that's the best thing forward. >> Right. So you're like we agree with
01:19:48
this. We agree with this. We're going to really debate this in court. Layers
01:19:51
three and four. I'm going to come to the US. >> Yeah. >> And we're going to hash it out in court.
01:19:56
>> Yeah. >> So you land in America. >> Yeah. >> You go into the courtroom. you start
01:20:00
this process, what happens? >> So yeah, there was quite a lot of details there. Uh
01:20:05
first of all, the first like the first day you go you go and plea, right? So the plea the agreement has already like
01:20:11
debated >> by the way. Sorry. And where you're staying in a hotel? >> I was staying in a hotel. Yeah, I was
01:20:16
staying in a hotel in downtown Seattle. Um >> is your family with you or No,
01:20:20
>> my family went to join to to Well, not my not my not my not my kids. Um but my
01:20:25
sister and my mom went to join me. Um I didn't want my kids to go um they have
01:20:29
school and and then my partner has a business to run. Um I was already like no no longer running the business.
01:20:35
>> Yeah. >> So I didn't want to drag her away from from from from that.
01:20:38
>> So um >> yeah so my sister my my my my mom and my older kids with with me
01:20:45
>> and then um uh yeah so that's and then I was stay in a hotel um and then the next
01:20:51
morning go going to court. Going to court the first part of the process is the plea right. The judge asks you, "Do
01:20:56
you understand this paragraph, this paragraph, this paragraph?" Just say, "Yes, yes, yes." the the paragraphs were
01:21:01
already like negotiated like out of the wazoo by the multiple so many lawyers >> over lawyered
01:21:07
>> over lawyered and you the um so so you know and then you then the lawyers
01:21:13
debate about you know the the uh they didn't the first case when I after the
01:21:17
plea they didn't debate about the charge they debate about my bail my bail condition right so I got a post bail u
01:21:25
my lawyers argued I should be allowed to go back to UAE waiting for the sentence
01:21:29
three months Later the government argued that um uh I may not come back. So they
01:21:34
want me to stay in the US and they said they will not restrict me in my movement
01:21:38
in the US because I don't I don't I don't I I don't possess any harm to the
01:21:43
community. They argue about that the the the magistrate judge the first judge approved me leaving the US to go back to
01:21:49
the UAE for 3 months which would which would have been great. And then the the the government appealed that uh my
01:21:56
lawyer says like in his 40 years he never seen a appeal on a bail condition. >> Wow.
01:22:01
>> And then he said well this guy is a ton death uh because they will this will
01:22:04
piss off the courts which will actually be my favor. And guess what two weeks later the court ruled ruding in the
01:22:10
government's favor and I was kept in the US. So I was kept away from home uh for
01:22:14
three months. When three months came >> that hotel >> I was free to travel in the US. I was
01:22:18
like well I'm stuck in the US so might as well travel. Uh I had a sister my sister have a place in the US. So I was
01:22:23
staying with my sister for a bit of the time and then I was traveling um just cool just to try to keep myself cool.
01:22:30
Chill. All right. Um and then 3 months later the government requests for another 3 months extension. So now I
01:22:36
have to stay in the US for another 3 months longer waiting for >> Now were your kids at this point coming
01:22:39
to see you at least so that they could come see you or >> No, I I did not ask them to come and see
01:22:43
me. Um >> so you didn't see them for six months? >> Uh yeah and well actually I didn't see
01:22:47
them for that year. Yeah. For Yeah. >> Yeah. So uh and then so the government
01:22:50
asked for another 3 months extension then on April 30th 2024 uh that's my core date and then a week before that is
01:22:59
when both sides submit their their request the government request for 36 months which is twice the maximum
01:23:05
sentencing guideline for the worst case scenario for me. Right. So the court said like then this court had never seen
01:23:12
a government asking the court to ignore the sentencing guideline. Did you find that out for the first time sitting
01:23:18
there in the court? >> No, just a week before the court because the government had to make the subm
01:23:22
submission. There's a written submission before. >> How did you react to that?
01:23:25
>> Well, not good. Right. So, uh and then my lawyers also the my lawyer told
01:23:30
changed before they said, "Oh, you can probably get home." They said, "Look,
01:23:33
the judge most likely is going to split the baby." So, if the government's
01:23:37
asking for 36 months, you're asking for probation. The the government most likely to pick some number in between,
01:23:43
right? So I was like, "Okay, that's not good." >> Wow. >> Yeah. And also 5 days before my
01:23:47
sentencing, um on April 25th, Senator Elizabeth Warren went on TV to say to declare war on crypto again. Um
01:23:56
so this is like 5 days before my sentencing. Um and he wrote an open letter. She wrote an open letter to the
01:24:02
DOJ saying all this stuff. Um which is actually most of it is is is not correct.
01:24:09
So uh yeah. So then that's and April 30th I got sentenced and then the judge
01:24:14
the judge said a bunch of good really good things about me. Uh I have all the excerpts in the book but then at some
01:24:20
point the judge says but and then you like okay that's not good. >> Wow.
01:24:24
>> Yeah. And then I got forward >> that's how they start the sentencing.
01:24:27
They're like he's telling you all the good things and then he gets to the butt
01:24:31
and you're like oh my god. >> Pretty much. Pretty much. Yeah. >> Wow.
01:24:35
>> Yeah. So uh the the lawyer still debate the sentencing on the April 3rd is the
01:24:39
lawyers debating court about no this ar that's when the two hazmats got rejected
01:24:44
u by the court like my lawyers argue like no this and that uh this I never touched any of transactions I'm not
01:24:50
aware this things just >> layers three and four of the accusations got thrown out.
01:24:54
>> Yeah. So um and then uh they argue about you know what's what what should what
01:24:59
should what the recommended uh sentencing should be. My lawyers of course argued for either uh home uh
01:25:04
probation uh or home confinement at the worst case, right? Um and then the government argued like this guy's really
01:25:11
bad guy, you know, this case is really big. Um and we should punish him really really hard with double the punishment
01:25:18
of any legally recommended punishment. Uh 36 months. Um so the judge landed at four.
01:25:24
>> How did you deal with that? >> It was difficult at at the beginning,
01:25:28
right? Um it wasn't a full month. It was am I going to be safe? >> Yeah.
01:25:33
>> Right. So if if if like if you tell me like I'm going to go to this place for 4
01:25:37
months. Am I I'm guaranteed to be safe? I'll be okay. I be like, "Okay, fine. I
01:25:41
I just deal with it." But the uncertain part is like uh also right after the
01:25:47
sentencing, uh um a bunch of the big media wrote that I'm going to be the richest person to ever go to US prison.
01:25:55
Uh and or and then my lawyers plus prison consultants they say well given all the all this coverage
01:26:01
>> what is a prison consultant >> that's a whole industry of some guy who
01:26:05
advise you what prison is like and give you advice and stuff like that how to live how to yeah so that's a whole big
01:26:12
industry that's growing because of the prison population is growing in the US
01:26:16
so anyway so the prison consultants like given the highprofile coverage you are a
01:26:21
prime you're the probably the biggest target for potential extortion in in in prison. So your safety is going
01:26:27
to be a issue. So that's the thing I was worried about then. I was like uh so how
01:26:32
how do I deal like you know you go in and they you don't have anything, right?
01:26:37
Um how how do you how do I make sure that I stay safe? Um uh that's like the
01:26:43
the top consideration, right? So you you're really thinking about how do you
01:26:46
do that? So well you know um you talk to a lot of people who prison consultants are usually like um exgards ex wardens.
01:26:55
There's another group of guys who people who have been to but those guys are in
01:26:58
prison but they working there. They're not they're not inmates. There's another
01:27:01
group of guys who've been into prison prison like know they they were there for like as a inmate. So you talk to a
01:27:06
lot of those guys. Um and then uh you figure out what prison is like. Do you make friends? Do you not make friends?
01:27:12
you get advice on like know if somebody comes up on to you on the first day and they're really really friendly don't
01:27:17
take anything from them because know they will ask for 10 times more favor back later on if you don't then they
01:27:22
stab you and stuff like that so um I got a lot of different advice but at the end
01:27:26
of the day you just got to go and face it right so um um I learned what I learned is actually the US prison system
01:27:33
so vast 2 million people stay in US prison the US government spends perm more on prison than the on education on
01:27:40
schools right so That's know how much uh how big the US prison population is. And
01:27:46
uh because and there's 50 states and everyone every state has a different system. Uh the state prisons, there's
01:27:53
federal prisons and each one is like a mini city. They each like the prison I went in has um has 2200 inmates. It's
01:28:00
like a small city. Um and they each have their own rules, etc. So I got some advice um but many of those advice are
01:28:07
not really useful. But when you go in, you just got to deal with it. Yeah. >> So, you get sentenced on April 30th, you
01:28:12
said. >> Yeah. >> And when do you start? >> So, when you get sentenced, you don't
01:28:16
know where we don't know which prison you're going to. The court makes two
01:28:18
recommendations. Um, and then um uh usually you will receive a letter in >> but you're you can be in the hotel or
01:28:25
doing whatever and then you have to check in basically on some date like you have to go. So, in my case, the judge
01:28:32
ruled that I don't need supervision which is very unique. Um then I don't
01:28:36
have to check in. So I just have to sit uh I just have to wait for a letter uh that comes to my sister's place which is
01:28:42
a address I I register with a court. In fact the the the government the DOJ in their request they asked me to be uh
01:28:49
pre-manded uh meaning I'll be taken away with in hungcuffs. >> Uh I think they really wanted that photo
01:28:54
for PR reasons but the judge said look he's not a risk. He's not a flight risk.
01:28:59
He's not a risk to society. I'm not going to do I'm not I'm not going to do
01:29:02
that. In fact, the judge added one sentence that said, uh, he doesn't he does not need supervision, which is
01:29:07
actually a very interesting legal clause I learned later. So, this is why when I
01:29:10
finish my sentence, I don't have probation. I there's no parole. I don't
01:29:13
I don't need supervision. >> Oh, wow. >> So, um, uh, so there's some really
01:29:17
interesting stuff. Well, interesting stuff that you learned. >> How was that period for you?
01:29:22
>> Did anything bad happen or was it >> Luckily, nothing too bad happened. Uh,
01:29:27
it's not it's a really bad experience overall, but nothing like no physical
01:29:31
harm. uh there's no fights uh there's no um there's no real extortion what I
01:29:35
found like so my prison consultants tell me like know when you go in don't join
01:29:40
any gang stay to yourself uh uh just you know just just stay to yourself uh be quiet stay out of sight just
01:29:47
>> the minute I walked into the prison gate the guard says well you're going to need
01:29:50
some protection here um I I hear the Pacific Islanders are hiring so you might want to join them like that's like
01:29:57
this is literally like the minute I walked through the gate one guard was saying this to me.
01:30:02
>> Wow. >> I was like, what does that mean? Right. Um, and then, you know, after the whole
01:30:08
day, the first day was like the first day is pretty like they take you through so many process. You strip search. I
01:30:13
talked on CNBC like, you know, they they strip search you and then you move to your unit, which is like, you know, 200
01:30:21
inmates there. Um, it's like three rows of cells, 20 20 cells each facing each
01:30:26
other, three floors, and there's a common area in the in the bottom. Um, and there's like 200 macho guys looking
01:30:31
at you and you know, you walk into a cell and then um, but what actually found out is um, they organize prisons
01:30:38
by race. Uh, so by ethnicity uh, they group uh, so if you are a Chinese dude, they group you with a Chinese dudes. Um,
01:30:45
and if you're like a white guys, they group you with white guys. Black dudes
01:30:48
group with Mexicans, Spanish guys, no, they they put them in one group. Um, this actually does avoid a lot of
01:30:55
conflicts. um you are more likely to get along uh with people of your own ethnicity in terms of culture, customs
01:31:01
like know Arab there was one or two Arab uh uh guys that you know they they pray
01:31:07
they know they have a different schedule. Um so uh they put you in groups by ethnicity and the guards
01:31:13
actually incur the prison encourages because it reduces uh fighting. >> Oh wow. Um and then once you're in your
01:31:19
group, uh if you have a problem with somebody else in somebody some other group, there's a group rep and the rep
01:31:24
will talk about it and you know there's like a hierarchy and so u union reps
01:31:29
>> kind of like a union reps. Yeah. >> And then they come together and they
01:31:32
hash out. >> Yeah. They say look step stand down. We walked we walked through it. So uh so
01:31:38
there's a system to it but I I I didn't know any of this right. So I walk in and
01:31:42
then this um half ch half Asian looking dude comes to me say look u my name is Chino um welcome to our group uh he says
01:31:51
car welcome to our car I was like what what should I shake his hand should I not like am I joining this gang this
01:31:57
like it's yeah >> that's crazy >> yeah and this this guy is a Filipino
01:32:01
German mix uh there's not enough Asians so they kind of group anything that's
01:32:05
kind of Asian and they also group the Native Americans plus plus Pacific Islanders like how the Hawaiians into
01:32:11
the same group. So our group only has six people out of this 200 people. Um and I was sent to a low security prison.
01:32:19
I should be eligible for a minimum security prison which is one one level lower where most of the white collar
01:32:24
crimes go. But because I'm not a US citizen, uh they put me into a low which
01:32:30
is where all the drug laws are. So uh wow. >> Uh yeah. So that's a it's a crazy
01:32:35
experience. I have quite a lot quite a quite a lot of details about this part in my upcoming book. What was the first
01:32:40
thing you did when you got up? >> A good shower. A good meal. Um the when you first get So the shower is like
01:32:47
literally like you know box this big. This is like a this is like a a cowboy uh bar door like that covers the middle
01:32:53
part. They can see your legs and see see your head. Um but it's hard to take a
01:32:58
shower without touching the wall. Um so the when you get out of prison the first
01:33:02
time it's like taking a shower no you no longer need to touch the shower wall.
01:33:05
That's like a luxury that's a luxury. And uh also um uh there's very limited
01:33:10
fruits, uh very limited protein, like good like proper protein. Um there's a
01:33:16
lot of carbs, uh a lot of like you know uh bread, uh uh uh flowers, fried stuff.
01:33:22
Um very little veggies, very little protein, very little fruits. Um I haven't seen a whole fruit for like
01:33:28
months. When I saw when I got out and saw like a plate of fruit, I was like, "Wow, that's that's a luxury I haven't
01:33:34
seen for a few months." >> Wow. >> Yeah. Did you immediately just go back
01:33:37
to the UAE? >> Yeah. >> Yeah. When I left prison, it took took me about six 26 minutes from leaving the
01:33:43
uh the the the prison door to getting on the airplane and flying out. >> What were you thinking? Were you saying
01:33:48
to yourself, "I understand where they were coming from, and I was at least vindicated
01:33:56
on the parts that I felt were overreach. I can see where they were coming from with these first two things." Did you
01:34:02
say that to yourself or did you say this was a total railroad and this is completely unfair and how did this
01:34:11
happen to me? Why did this happen to me? What were you saying to yourself? >> I have some restrictions on some on what
01:34:16
I can say about the agreement, the plea, etc. So, um I >> I'm just talking emotionally.
01:34:22
>> Emotionally, I just want to be I would just want it to be over with. Um and
01:34:26
remember that when I first got out, this is still the Biden administration. The election has not happened. Um, and uh,
01:34:33
uh, it wasn't clear who's going to win. It wasn't clear the U. The US policy is
01:34:36
still the same. >> You went in when? >> I went in on May 30th, 2024,
01:34:41
>> and you got out four months later. >> Uh, September 27th is the day I fully got
01:34:46
out. The election was in November, >> right? >> And by the way, sorry, at that point,
01:34:50
you had been in America for a year. >> For you hadn't seen your kids in a year.
01:34:53
>> Yeah. >> Yeah. So, at that point, like, I just want this whole thing to be over with.
01:34:58
Um, and I thought they will continue. Well, I was thought if they if the policies continue, then you will still
01:35:03
be anti-crypto uh policies, um we'll just whatever we'll just survive however
01:35:08
we survive. Um so, um yeah, so that that was that was kind of the mentality. >> So, when you get back, had you come to
01:35:15
terms as well with the fact that you couldn't run Binance per se and that that was part of the plea and
01:35:21
>> uh yeah, so I'm actually okay with that. Uh stepping down was really really hard.
01:35:25
Um I actually cried out of it and the the only other time I really cried was like know when my father passed away a
01:35:31
few years ago. Um but after a few after coming back uh you know I was actually quite happy not to run Binance. I have a
01:35:39
lot more free time. Um and then if I step down myself people say hey this this guy ran out of stamina but like now
01:35:46
I can't run Binance. So uh so it's not my fault. It's not your problem. It's
01:35:50
not it's not my choice. >> Right. But after after a while I was like know there there other there are
01:35:55
other very useful meaningful things I can do with my life. Uh I am I think overall I'm in a very fortunate position
01:36:02
right um I have resources um I have enough money to do whatever I want to do uh in terms of amling projects and
01:36:09
businesses etc. Um including like know Google academy free education stuff like that.
01:36:13
>> Yeah I wanted to talk about that in AI. >> Yeah. Yeah. >> But before I do that let's just do a
01:36:17
little bit of the final kod here. Tell me about the process to start getting a pardon and getting it and what you had
01:36:25
to do and >> Yeah. So the so on the pardon um I don't think anybody knows what the pardon
01:36:30
process is. >> It doesn't seem like there's a process. >> Like I don't even know what the process
01:36:34
is. So what the process is you find a lawyer who writes you a petition who put all the arguments why you were you
01:36:40
should be pardoned why you know you were over overly prosecuted etc etc right and
01:36:45
why you're a good person. And a pardon what is it for? Is it effectively to recognize overprosecution?
01:36:51
>> No. Partnership partnership er you raise everything you had you had before. So
01:36:55
you're you're now a very normal person. >> But the reason to be considered for it
01:36:58
can be anything. >> Can be anything. >> It's really just the discretion of the
01:37:02
president reading the petition. >> I think so. Uh well based on my understanding based on my understanding
01:37:07
is um uh the constitution grants the US government or the US president to give partisans and that's as about that's
01:37:15
about as much detail as it says I think. >> Right. Okay. >> Um and then how he does it.
01:37:19
>> So it's really about the social norms in that moment and then how he interprets
01:37:23
>> I think so >> those social norms. >> Yeah. And then you know historically
01:37:26
most presidents pardon on the last day. Right. >> Exactly. >> And then Biden I think started uh
01:37:31
pardoning some in between and >> and he also did pre-pardons >> which is which is which is a bit new
01:37:38
which is new and also crazy. >> Well it was very new. Yeah. I was largely around co for for for that but
01:37:43
>> yeah that that really caught a lot of people. He he also pre-pardoned his son
01:37:47
for some for some for some period. >> That's right. >> Biden prayed.
01:37:50
>> It wasn't just the co stuff. That's >> it wasn't just a co stuff. It was like a
01:37:53
period where nobody where a period of time where nobody even talked about. >> That's right.
01:37:57
>> It was like why do we need it to >> That's right. >> But anyway, so the process I believe is
01:38:01
there's no process. The president can do whatever they want and then u so you
01:38:06
petition and you wait and then uh there's there is a pardon SAR in the white house. Uh I think her name is
01:38:13
Alice Johnson. uh she also went to prison for many years. She wrote she she wrote a really nice book which I read um
01:38:19
but your lawyers you know pink her say they need a status update they need a status update and there's no no and then
01:38:25
suddenly it happened. So uh uh that's kind of my the the uh extent I know about the pardon process. I don't think
01:38:34
anybody know I don't think that's a fixed process. I don't think anybody
01:38:36
knows what that is. >> The question that some people can kind of jump to is they think what must CZ
01:38:41
have done to try to get it. Do you want to put that to bed? >> Well, I didn't do much. I didn't do
01:38:45
anything. And then but I think look, um, without the apartment, it's quite hard
01:38:50
for Binance to enter the US in a in a proper way. I think if you >> because you're the Ubo.
01:38:55
>> I'm the UB. Yeah. So, uh, and B I'm the UBO of Binance and Binance US, right?
01:39:00
>> Without a partner, Binance, Binance is severely limited to do stuff in the US,
01:39:04
>> right? >> Uh, if US wants to become the capital of crypto in the world, you cannot have not
01:39:09
you cannot not have the largest player. you cannot not you cannot have US people
01:39:13
not be able to access the largest liquidity pool. >> Yeah. >> Uh in crypto and also we're the we're
01:39:18
also one of the largest crypto ecosystems. Uh so I think uh my guess would be that look the president is a
01:39:26
pro crypto president. Um you obviously um >> he's had his own issues like the
01:39:31
debanking. Exactly. Where he's felt what it feels like to be targeted. >> Not only debanking he got 34 criminal
01:39:38
charges. >> Yeah. Right. And he got like one of the I don't know all the other charges but
01:39:42
>> that as well. >> When I was in prison I saw on the prison TV that he got 34 criminal charges like
01:39:47
and one of the charges was he brought some document to his bathroom to read. >> That's like that's crazy,
01:39:52
>> right? So I think the fact that he went through that do the Biden DOJ will
01:39:57
probably help me a lot to get the pardon because he will sympathize. He he knows
01:40:00
how aggressive that DOJ was, right? So um that's that probably helped me in some way.
01:40:06
>> So how do you spend your time now? >> I'm still getting pretty busy now. So I
01:40:09
do giggle academy um you know this free education platform. I consult with many governments on uh to help them to
01:40:15
putting so sound crypto regulatory policies. Um I get involved on the investment side. We we invest in the um
01:40:23
blockchain AI biotech um the very active team um uh doing investments and then uh
01:40:29
>> this is within Binance or outside of >> this is outside of Binance. this is a
01:40:32
part of easy labs and then I also help like mentor coach a few guys in the a few funders in the B&B chain ecosystem
01:40:39
etc. So between all of those things, I'm actually pretty busy. >> Tell me about Google Academy.
01:40:44
>> So I thought no, it's possible to uh develop fully digitize all education
01:40:48
content. And why is that important? >> There's some numbers. I think 7 700 to
01:40:54
800 million adults do not are illiterate. Two two-third of them are women. And on top of that, there's about
01:41:00
500 million kids who are not in school. So if you add all of that up, that's
01:41:04
like 1.2 billion people. Yeah. >> Uh who are not educated. Uh and this >> 12 12 13% of the world population.
01:41:11
>> Yeah. And uh these are all in really poor areas. Uh they there's just no
01:41:15
schools around or they just couldn't afford to go to school. Um and the schools are not very good today either.
01:41:20
Um the schools are like you know they the schools average you out. >> Yeah. No you um you have a classroom and
01:41:27
>> how is the software designed? >> So it's just an app on a phone uh on a
01:41:31
phone or tablet. It's just an app. Um I believe that we have enough technology
01:41:35
with you know gaming understanding of human psychology with AI a single app can deliver all the education content
01:41:41
you need and we can do that for free. >> Have you looked at versions of this like
01:41:45
alpha school and do you have any opinions on that? >> Yes. Yes. I think alpha school is great.
01:41:49
Um Alpha School is really really good. Um uh but you know it's high cost >> high cost
01:41:54
>> right. So uh uh it's more I think um >> I think Joe's software is called time
01:42:00
back. I think that's what it's called. Yeah. >> Have you had a chance to see?
01:42:03
>> I have not played with a with a lot. Uh I did meet some of the founders there
01:42:07
and some of the key executives there. Um uh they target a they solve a very hard
01:42:12
problem of making making the existing education better where I solve the other end of the problem making the education
01:42:17
accessible, >> right? >> Uh hopefully better later too. >> And so your goal would be that
01:42:22
this is widely proliferated. Are there schools in your view of how giggle works or
01:42:28
>> No, I actually don't want to do schools. Uh, I I want everyone to learn from one
01:42:32
app. >> The software is very reward oriented. >> Yeah. >> Badges.
01:42:37
>> Yeah. Yeah. >> I'm just going to ask the obvious question. >> When I looked at it, I was like, well,
01:42:43
>> badges is like a trail of breadcrumbs to like >> tokenize and earn and payments. Am I
01:42:49
just making this up or? >> No. Uh, so I thought really hard about this. Um, but I res I will for a very
01:42:54
long time resist issue a token on the gold academy. This has pros and cons. Uh when you issue a token, you can do the
01:43:00
rewards. You can earn uh learn to earn. Learn to earn. Exactly. You can do a bunch of stuff. You can do you can
01:43:05
incentivize teachers. You can to create content. >> Yeah. >> Um that's good. Um but the uh for me I
01:43:13
want to avoid the token because of me, >> right? Because if I do a token, everyone
01:43:17
wants to buy the token and everyone on the platform. >> People want to speculate on the token.
01:43:20
>> People want to speculate on the token. People the then I won't be able to tell
01:43:23
if people are they real kids learning or they just farmers that that are trying to farm the token. Yeah.
01:43:28
>> Um, I want to rem uh if I issue a tok if Google issue a token, everyone's going
01:43:32
to >> I have to be honest. I think giggle sounds really incredible, but that was
01:43:35
where my reptilian brain went was the >> everyone thinks about that obvious
01:43:40
thing, right? Yeah, exactly. >> Um, but I want the giggle I want to be a real free education platform instead of
01:43:45
a token platform instead of some crypto thing. >> Right. So if if there's a token then
01:43:50
people is going to focus on the token. >> So your goal is that you'll just deficit
01:43:54
finance this and just continue to kind of proliferate this. >> Yeah. Yeah. So that was my goal. But
01:43:58
what happened is um there's a community project that donates um donated like $12
01:44:03
million based on >> 12 million$12 >> million US based on memecoin. Um and
01:44:08
this is not some like and I've only spent like maybe three $4 million on the
01:44:13
entire project so far. >> Yeah. >> So now you know it's actually net like
01:44:16
you know it's hard to give money away. >> Yeah. >> So uh it's hard to give money away with
01:44:21
positive impact. >> With positive impact it's very very difficult. So u very difficult.
01:44:25
>> So uh yeah. So my plan is I will fund it for as long as it needs to reach that
01:44:29
goal uh of a fully um fully digitized delivery of education in a gamified sticky way. Let me ask an AI question
01:44:38
for a second. >> Yeah. >> You said that AI is this third pillar of your life that you see these big waves,
01:44:44
right? Yep. >> One of the most interesting things about AI is that when you basically get one
01:44:49
level below the English and you start to look at the embeddings and that the layer of embeddings,
01:44:54
>> what you start to see is that it's this machine readable language. It's not
01:44:58
English. >> Yeah. >> And there's a richness of information there. It's perfect for agents.
01:45:02
>> It can traverse it. You can cipher query it. You can do all this stuff that
01:45:05
allows you to make really incredible leaps in productivity and otherwise. >> Yeah. It stands to reason that agents
01:45:12
are also participants of commerce and need payments and you know and I think you've said this is like probably the
01:45:18
largest user of crypto at some point in the near future. Describe that vision for us.
01:45:23
>> Yeah, I think it's it's it's fairly straightforward. I think as you said
01:45:26
right I think it's very clear soon we're gonna each of us going to have like know
01:45:31
hundreds or thousands or millions of edgings working for us in the background and they will be transacting they will
01:45:36
be they will be moving money around right so uh in theory if I want to listen to this podcast you know your
01:45:42
people should pay a few cents to to listen to it um whatever economic model that you want you
01:45:47
>> more than that CC >> sure of course sure but there was some economic model right uh right now u you
01:45:54
know even last year we talked about aging is buying tickets for us. It's not
01:45:57
quite there yet, but you will get there, right? Uh they will book restaurants. They'll pay they'll pay for hotels for
01:46:01
us. Um and then um uh the agents can transact a million times more than us. >> Yeah.
01:46:07
>> And they're not going to use banks. Uh banks just won't be able to
01:46:10
>> Well, banks won't onboard and AML KYC an agent. Doesn't even make sense.
01:46:15
>> You can't do a KYC. They >> It doesn't make any sense, >> right? So, uh
01:46:19
>> but also what agents will do is they'll transact at a transaction volume and at
01:46:22
a rate. Yeah. It'll make the traditional network's head spin. >> Exactly. They're just not going to be
01:46:27
able to support it. >> Yeah. >> Right. And also um even stuff like investments or trading, right? So today,
01:46:32
you know, you open the Binance app, you look at a chart, you have to like, you know, click on a price level and you
01:46:37
have to type in the price and a green or red button. That shouldn't be the interface. The interface should be like,
01:46:42
hey, look, convert 10% of my stable coins into B&B. And then you'll figure
01:46:46
out, okay, if you have a large position, you'll do slowly over time. Uh if you
01:46:49
have a small position, which what be one one market order? Um, all of that stuff
01:46:53
should be just happening in the background. All right. So, the agent can do this for us. Uh, you soon you will be
01:46:58
able to. >> What is the most viable payment system today that agents could rely on?
01:47:03
>> I'm actually not too sure. Uh, I don't think there is any one that's super
01:47:07
that's what crypto project today do you think comes >> Oh, you mean crypto?
01:47:10
>> Yeah. >> That agents could use theoretically. >> Again, it's early days. I don't want to
01:47:13
speculate. I don't want to name any specific projects. Um, it'll cause some
01:47:17
token price fluctuations. Um but quite a number of people are working on it. Uh so especially recently with a more like
01:47:25
a AI agent social network thing. So it's getting more and more hype. >> Yeah. Um and uh yeah. So I think you
01:47:31
you'll get there. >> Let me ask you about crypto in general for a second. What is the role when you
01:47:35
see a lot of stuff around free speech? What is the role of privacy in crypto? One of
01:47:41
the things that I struggle with. If you ask me am I a Bitcoin maximalist? I would say no. Even though I was early, I
01:47:48
think my biggest issue with it is that there's a lack of fungeability, which I
01:47:51
think is problematic to get to mega scale and then there's a lack of privacy.
01:47:55
>> I agree. It's probably the biggest thing that will hold Bitcoin back from being
01:47:59
ubiquitous. Where does privacy play as the world evolves as you see it? I think privacy plays a very fundamental role in
01:48:06
our society. But right now, as you said, I also think that uh Bitcoin and most cryptocurrencies do not have enough
01:48:12
privacy features. >> Yeah. Um I think when Bitcoin was designed it was going to be pseudo
01:48:17
anonymous but the fact is every transaction on the blockchain you can trace especially now you have a
01:48:21
centralized exchange with KYC. >> Exactly. >> Um and you know if you have like
01:48:27
it's actually very easy >> and by the way we go always back to the same argument which is it always goes
01:48:31
back to the corner case of well somebody's using this for something illicit. And I say there are those use
01:48:36
cases, but the overwhelming majority is you buy a pack of gum, but tomorrow you may buy, you know, you may want to buy a
01:48:43
certain movie or a video game, you may want to buy a cigarettes. And it's not
01:48:48
for me to judge. >> Yeah. >> And dollars are funible in that sense. There's complete anonymity. We have no
01:48:55
idea about what it was used before that I got my hands on it. >> Yeah. Well, there there actually real
01:49:00
applications where privacy is extremely important. uh if you book a certain hotel and people know that hotel address
01:49:06
like blockchain hotel address receiving address they will know that you will be in that hotel. That's right. That's a
01:49:11
that's a physical security for for you. That's right. >> Right. So there there are real use cases
01:49:14
where privacy is very important. This is why people don't publicize their home
01:49:18
addresses online. >> That's right. >> In many countries if you if you reveal
01:49:21
somebody in Japan if you re review somebody's home address that's illegal,
01:49:25
right? So uh um so there they're they're real there are real use cases for
01:49:29
privacy and which Bitcoin uh most cryptocurrencies currently do not provide. >> Yeah.
01:49:34
>> Um there's a counter argument okay law enforcement wanted to track down bad
01:49:37
guys that can be done uh even with no that can be done. Um we I'm supportive
01:49:42
of that but there's fundamental privacy issues. So uh I do think that in the
01:49:47
future we uh as an industry need to figure out how to uh evolve the privacy features which no one no one's really
01:49:54
focusing on right now. There's a few privacy focus of coins. I I was going to
01:49:57
say no one. Um but they are they don't have much market cap. They don't they
01:50:03
don't have much size. >> Right. >> Yeah. Tell me about the book. It's
01:50:06
coming along. It's a it's a it's a it's it's a always a longer project than I
01:50:10
anticipate. Right. What was the point of it? Was it is like catharsis or is it to
01:50:15
make a point? Is it to tell the story? All of those things? >> A bit of everything. It started because
01:50:21
I was bored. uh because I was I started drafting when I was in prison. It was just to get keep me busy uh because I
01:50:27
don't want to deal with you know I don't want to be chatting with it just keep me
01:50:30
busy in in prison. So I started drafting it and typing on on a very dumb terminal
01:50:34
and sending it to my assistant. Um and then once I got out I was like well I have enough that if I spend a bit more
01:50:41
time on it I can have a book. And then um uh but but editing a book takes so long. uh every every every pass takes
01:50:49
like two three weeks if you want to edit a book because like know right now it's
01:50:52
like uh 95,000 words so it's like 300 pages um and then um I'm also editing
01:50:59
the English and Chinese version so uh uh so it just takes longer but the point of
01:51:04
the book right now I think is just to get the story out I think there's many
01:51:07
misconceptions about who I am uh what we what I went through >> what are those misconceptions do you
01:51:12
think >> well there's a lot of negative media about crypto there's a lot of negative
01:51:15
media about uh um uh CZ, Binance, um the entire industry and to some extent I think there's a lot of negative media
01:51:23
about Trump the party etc. I that part is not too heavy in my book. I just know this is as simple as we we talked about
01:51:29
on this podcast but just for people to understand like you know who we who I am uh who B to some extent by extension who
01:51:36
Binance kind of is from my perspective. >> Is it important story for your children?
01:51:42
>> I think so. Yes. Yeah. >> Why? Um I think it's important for them
01:51:46
to un like no they see they of course are more on my side. They know all this media uh not the right stuff. Uh but
01:51:53
they haven't I didn't have time to explain the story to them in this level
01:51:56
of detail and I think it's important for them to read this and they will understand a lot more detail than what I
01:52:01
what I'm able to tell them verbally or in person etc. Uh even though the book
01:52:06
doesn't contain everything but it's as much as I can put in. What do you want
01:52:09
for your kids? I want them to live a healthy and happy life however they define it. Uh if they're happy just
01:52:16
being a normal person then that's good for me. Uh if they want to do startups
01:52:20
and you know build companies and that's great. Um if if they want to be artistic
01:52:25
etc that's great. If they want to do human humanitarian efforts charity that's also great. Um whatever they
01:52:31
figure out what they want to do I just want to be there to support them. Um uh yeah that's how similar or different is
01:52:38
that from what you got from your parents? pretty similar. My my parents didn't have pressure to on me. Uh my pre
01:52:43
my parents didn't pressure me to be this and that. Like they didn't they're not
01:52:47
even like normal Chinese parents where they want you to be a doctor or engineer or
01:52:51
>> lawyer, engineer, >> lawyer. Those that was my parents. Yeah. Okay.
01:52:54
>> My parents didn't do that with me. My parents like you can do whatever you
01:52:56
want. Just my parents said to me like >> very unche very unche u my parents said
01:53:01
don't hurt yourself. Don't hurt other people. Right. So don't do drugs. Uh
01:53:06
don't get into like you know don't don't get into crime. Um, and then don't hurt
01:53:10
other people. Uh, so that's as simple as like as I got from my parents. And uh,
01:53:15
yeah, I think there's a lot of people that probably hear this and they'll probably think that, and I think
01:53:24
this is a real compliment, by the way, so don't take this wrong when I say this
01:53:27
this way. That could have been me, too. Yeah. I think that we glorify success in
01:53:32
a way that makes it seem like it's impregnable. It's like this very quicksotic thing that happens and it's
01:53:41
not that. >> No. >> Yeah. >> And the reason why I can say that is that
01:53:46
when I spend time with you and I'm sure now with the people, you know, rounding
01:53:49
two hours with you, >> they'll think, man, this guy is really normal. >> It's a nor I'm a normal dude.
01:53:56
>> Exactly. A lot of people say that like, >> you know, >> to me as well in this weird way, it's
01:54:00
like you're just a normal guy. And it's like there's something really valuable
01:54:05
about working on things that you like because then the time just passes. >> Yeah.
01:54:09
>> And you kind of just put your head up and you're like, "Wow, okay, there's
01:54:11
something new to try. Let's go try that. Let's go learn something." I want to
01:54:14
give you a chance to speak to all these people who are probably thinking to themselves, "Wow, that could be me."
01:54:18
>> Absolutely. I think um number one, I'm a normal dude. Uh I don't I don't think I
01:54:23
know I'm not super smart. Uh but you don't need to be super smart to to be
01:54:26
successful. You can't be too dumb, but you can't be you don't need to be super
01:54:28
smart. There's a lot of other things like you know principles, values, uh emotional quotient, a lot of those those
01:54:34
things come into play. I think um there's a lot a lot of luck as well. Um but I think for most people um you are
01:54:43
in a situation where you are you usually cannot change the situation. So what you
01:54:47
can only do is change yourself, right? So if you just push yourself a little bit every day, you don't have to push
01:54:51
yourself too hard. You too you push yourself too hard, you're gonna burn out
01:54:55
and you're not going to last long. But you want to push yourself to like 120%
01:54:59
110 130 somewhere in that range where however you can last long. >> Yeah. >> And if you do that for like 30 years and
01:55:06
you get lucky, you will most likely be relatively successful. You might not be a you might not be a billionaire, but
01:55:12
you'll you you'll have a very comfortable life. Do >> you think that it's important to
01:55:19
maybe dispel the myth that being a billionaire is not everything it's cracked up to be?
01:55:23
>> Oh yeah, absolutely. U money is money. So in in our life there's a few if I
01:55:28
kind of picture spiderweb graph right money is only one tangent. >> Yeah. >> Right. So once you have enough having
01:55:34
>> one thread >> it's one thread. Having more doesn't help you. Uh in fact there's health
01:55:39
there's family um there's other things that can keep you happy like your values
01:55:43
uh contribution positive impact like that's intrinsic internal rewards that you feel very happy about. Um a lot of
01:55:49
those things are extremely important. So once you have enough money on this graph
01:55:53
you don't more doesn't make you happy. Sometimes you have more, sometimes you
01:55:56
have less. Um, then how's your health? Also, like there's another dime, time.
01:56:01
How much time do you have? Can you use your time the way you want? Can you are you working on the stuff you you want?
01:56:06
Are you spending with the people that you you want to spend with? >> Yeah.
01:56:09
>> Um, and are your family healthy? Uh, you'll be you were very lucky if your
01:56:13
family is all healthy. Like that's that's already a huge gift. >> Um, so uh and then your mental health is
01:56:20
also important. How to deal with pressure etc. I somehow am very lucky to have a very sort of stable uh mind. So I
01:56:26
think all of those things are extremely important and all of those things you can improve on uh instead of just money.
01:56:32
A lot of people only chase money but sacrifice everything else. They work really really hard. They don't have free
01:56:36
time. They are not spending time with their family. Their health deteriorates after 10 20 years.
01:56:41
>> They don't enjoy the time that they're spending on these things even to get the
01:56:44
thing that they have so much of that they don't need. >> Yeah. Yeah. So this is also the this is
01:56:48
also the part like you know I'm actually very grateful that I don't have to run
01:56:51
Binance anymore now I have more time. >> Yeah. Whereas before like even though
01:56:54
that was very enjoyable but on my other questions I was not doing well. >> Yeah.
01:56:58
>> Yeah. So yeah. >> CZ thanks for joining the online podcast. >> Thank you. Thank you for having me.
01:57:19
I'm going all in.