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