Original | Odaily Planet Daily
Author | Hao Fangzhou, Qin Xiaofeng, Azuma
November 22nd is destined to be a big day in the history of CZ, Binance, and the entire crypto industry.
Early this morning, Binance officially announced that it has reached a settlement with the U.S. Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network on historical registration, compliance, and sanction issues. As part of the settlement agreement, Binance has agreed to plead guilty and pay over $4 billion in fines.
At the same time, CZ released a public letter stating that he will step down as CEO of Binance, and Richard Teng, head of Binance's global regional markets, will take over. In the open letter, CZ revealed that he is unlikely to lead a startup to grow gradually as he did with Binance in the future, but rather wants to transition into an investor, investing in the fields of blockchain, Web3, DeFi, artificial intelligence, and biotechnology.
Looking back at CZ's leadership of Binance over the past 6 years, he not only made Binance Exchange a leader in the cryptocurrency trading field, but also strategically laid out and interconnected its public chain ecosystem, payments and stablecoins, upstream and downstream investments, education and charity, transforming the once "one-legged" CEX into a comprehensive Web3 conglomerate, and spreading Binance's products, services, and brand influence worldwide.
From the perspective of the Web3 industry, CZ, as a top KOL, represents the determination and courage of Chinese innovation, going global, and collaborating with clients from different backgrounds. He has also repeatedly sounded the alarm on risks, reassured the market sentiment, stabilized morale in times of crisis and volatility, pointed out problems, and advised on regulation, advocating for the young crypto industry in a high-pressure regulatory environment to seek broader business opportunities.
Therefore, CZ's guilty plea and Binance's settlement are considered by some in the industry as a move to "burn the small self to illuminate the future for later generations and innovate compliance," and even laid the groundwork for the "accelerating advancement of ETFs."
In the following article, Odaily Planet Daily will review the key milestones and outstanding achievements of Binance, summarize its successful experiences, and predict the focus areas of the successor and the next stage tasks of the cryptocurrency trading platform based on the guiding principles of the first leader.
Creating the "Largest Exchange in the Universe" from Scratch
When it comes to leading cryptocurrency exchanges, you might think of a long list of names, but there is always only one throne—Binance.
This is a fact that even its competitors have to admit. In various rankings, whether spot or futures, Binance's market share is far ahead, often exceeding 50%, more than the sum of the top five.
Data shows that Binance currently has over 6,000 employees worldwide; supports 18 service languages globally, with over 120 million users verified through KYC, equivalent to 1 Binance user for every 66 people worldwide. In the industry, Binance is jokingly referred to as the "largest exchange in the universe."
Under the leadership of CZ, Binance has built a diverse business system from scratch in just 6 years, including spot, futures, options, OTC, mining pools, cloud services, public chains, investments, and charity. Today, Binance is not just a trading platform, but has become a comprehensive blockchain giant enterprise.
What is the secret to Binance's success? Many say it was the industry opportunity provided by the "94" policy in China. While opportunity is important, what is more critical is how insiders seize the moment and make the right choices. CZ's internationalization strategy successfully helped Binance capture a wave of traffic in its early stages.
In 2017, when domestic exchanges were emerging, Binance, with its keen policy sense, positioned itself as an international trading platform, expanding its target users globally and avoiding the domestic market competition. Two months later, when strict regulations were imposed domestically, Binance's global strategy allowed it to stand alone, laying the foundation for future development. In just 165 days, Binance made a strong comeback, successfully becoming a leading cryptocurrency spot exchange.
After the market entered a bearish phase, Binance did not rest on its laurels but continued to enrich its trading business. For example, in the second half of 2019, it focused on derivative contracts and successively launched services such as C2C and lending, enhancing network effects. After becoming a leading player in the trading business, Binance also sought transformation, mainly focusing on investments, technological development (public chains), new businesses (such as mining pools), and charity.
Unlike traditional authoritarian managers, CZ, who oversees the vast crypto empire, advocates a decentralized model and strives to delegate authority, with all of Binance's businesses being developed step by step through trial and error. "We have always had a relatively loose management style, with a lot of freedom for everyone. Starting a project at Binance is relatively simple; everyone can do what they want. But they have to deliver results. If they can't deliver results for a period of time, we may stop that project."
Perhaps it is in this mode that Binance's innovation flourishes, and its management efficiency has not been reduced due to distributed operations. Taking Binance's public chain as an example, it announced the development of its own public chain in December 2018, launched the mainnet in just over a year, and this year introduced OpBNB, the second-layer network of BNB Chain, and BNBGreenfield, a distributed storage chain. Binance's public chain is also the best in terms of ecosystem development among exchange public chains, once catching up with Ethereum.
Interestingly, Binance's exploration in many areas is not that of a "pioneer" but a "follower." Take the most popular IEO as an example. While some exchanges had tried it as early as 2017 with little success, it was Binance that popularized this approach in 2019 and has made it a standard for CEXs.
"If you look at the development history of Binance, in terms of trading products, Binance was not the first to venture into them, but we were able to iterate on the foundation laid by our predecessors." Binance co-founder He Yi said that every move by Binance is carefully planned to achieve the maximum effect with the minimum trial and error cost.
The right time to do the right thing. Binance's current achievements are the result of rapid efforts in new businesses, choosing the right focus, and seizing the market.
Shining Light for the Chinese, Speaking for Crypto
If "leading one's own company to become a unicorn in a vertical field" is considered the first step, then CZ's subsequent steps have focused more on promoting the growth of the entire Web3 industry.
Looking at the crypto world, the roles that can "lead the industry with their own views" include infrastructure (early mining, the previous surge of public chains, the rising new ecosystem foundation), trading platforms, investment institutions, traditional tech and financial giants, and regulators.
Key opinion leaders in the industry include Wu Jihan, Vitalik Buterin, CZ, Arthur, the persistent a16z and Paradigm, Cathie Wood, Michael Saylor, Musk, Jack Dorsey, Buffett and Charlie Munger, Gary Gensler…
We find that with the changing themes of the Web3 industry, there are few KOLs who are still active on social media and have "everyone listening to every word" rather than being "decided by their position," and apart from CZ, there are few voices from the Chinese.
Looking back over the past few years, some of CZ's classic remarks are still fresh in our minds.
For example, CZ has always been advocating embracing regulation actively and maintaining an optimistic attitude towards compliance trends. During the deep bear market last year, CZ cheered up the industry, stating that most countries and jurisdictions had begun to establish regulatory frameworks rather than outright banning Bitcoin or cryptocurrencies, creating a better environment for cryptocurrencies.
At the beginning of this year, CZ mentioned four focus areas for 2023, once again calling on the industry to focus on education and compliance. It is worth mentioning that CZ's fourth focus area is "ignore FUD, fake news, and attacks," which is why CZ often compares some baseless rumors by showing four fingers.
Although the helmsman of the largest CEX in the universe, CZ has a firm belief in the decentralized future. When discussing the future development trend of DeFi, CZ has repeatedly mentioned that DeFi may surpass CeFi in the next bull market.
In addition, CZ admitted that he is "not good at trading" and basically only holds coins without trading; the BTC in his hands was all in from selling a house many years ago and has basically not been touched. Even though he frequently speaks on Twitter, he always focuses on industry or Binance-related business trends and never predicts coin prices. "I am more concerned about the usage of Bitcoin, how many people are entering this industry, and how many people are using Bitcoin, which may be more crucial."
In terms of internal management, Binance employees, including CZ himself, are prohibited from trading futures, and the product testing team has specially allocated limited accounts; all employees' Binance accounts are registered and closely monitored. The starting point for all work is to avoid Binance and users becoming opponents and to maintain market trading order.
CZ is also willing to support Binance employees in starting their own businesses. When commenting on the departure of former senior officials from Binance, CZ once said, "Some employees are engaged in exciting new ventures outside of Binance, and they are growing into more important roles. I have even helped many of them with introductions and recommendations. We support everyone, we are a group, and this has created more development opportunities within Binance."
As one of the busiest people in the industry, CZ always remembers to sound the alarm and remind users to be aware of asset risks in emergency situations. For example, when a competitor faced a crisis of information leakage, he proactively notified without disclosing the specific competitor's name; when iOS was found to have a vulnerability, he actively urged users to update as soon as possible; and he has assisted damaged projects in freezing hacker funds after multiple hacking incidents.
It is these industry contributions that have led many industry leaders to write articles today, thanking CZ. (See CZ's Resignation, Crypto KOLs Bid Farewell for details.)
CZ Steps Down, Richard Teng Takes the Helm
With CZ's resignation, Richard Teng, head of Binance's global regional markets, will take over as CEO.
This morning, Richard Teng followed CZ's announcement with a public letter:
"I am honored and humbled to take on the role of the new CEO of Binance. The trust of 1.5 billion users and thousands of employees in the world's largest cryptocurrency exchange has always been a responsibility that I value and cherish. With the support of CZ and the rest of the leadership team, I have accepted the role of CEO, and we will continue to meet and exceed the expectations of all stakeholders while fulfilling our core mission—financial freedom. Today, Binance's foundation is stronger than ever before."
"My focus will include assuring users that they can continue to have confidence in the company's financial strength and security; working with regulatory agencies to maintain high standards that promote innovation and provide essential consumer protection on a global scale; and driving the growth and adoption of Web3 with partners."
Richard Teng's appointment is not surprising. In June of this year, Bloomberg reported that if CZ resigned due to regulatory pressure, Richard Teng was likely to become the next CEO of Binance.
This was also the first time that most crypto users learned about Richard Teng, and at the time, it had been less than two years since Richard Teng joined Binance.
In August 2021, Richard Teng joined Binance as the CEO of the Singapore region;
From December 2021 to October 2022, Richard Teng served as the new head of the Middle East and North Africa region at Binance;
From November 2022 to April 2023, Richard Teng served as the head of the Asia, Europe, Middle East, and non-US regions at Binance;
In June 2023, Richard Teng was appointed as the market head for all regions except the United States at Binance.
CZ once talked about how he met Richard Teng. The two met through an employee of the Monetary Authority of Singapore, and after communicating with Richard Teng for two weeks, CZ made the decision to bring him on board. Unlike CZ, who started from scratch, Richard Teng's biggest advantage is his extensive compliance work experience.
Before joining Binance, Richard Teng worked at the Monetary Authority of Singapore (MAS) for 13 years;
After leaving MAS, Richard Teng joined the Singapore Exchange (SGX) in 2007 and became the Chief Compliance Officer within 8 years;
After that, Richard Teng joined the Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM) as CEO in 2015, during which time ADGM was rated as the "best international financial center in the Middle East and North Africa" for four consecutive years.
If in the past 6 years, CZ needed to lead the fledgling Binance with a more aggressive approach to break through market barriers, actively seize positions in various tracks such as exchanges, public chains, wallets, and investments, and compete for the top spot, then when Binance has now grown into an industry giant, CZ may have realized that the biggest challenge facing Binance is no longer how to compete with opponents lagging behind, but to shoulder the responsibility of positive regulation as the industry leader and lead the crypto industry towards compliance.
This process is filled with considerable uncertainty, may be very long, and may be full of friction, but what CZ may be certain of is that years of frontline work have earned him countless reputations but also brought countless controversies. As Binance moves into a new development stage and needs to face challenges with a more stable posture, he may no longer be the most suitable person to lead Binance.
This may be the key reason why CZ chose Richard Teng as his successor.
Looking ahead, we have reason to believe that Richard Teng will continue to advance the development of all Binance businesses based on the foundation laid by CZ, while also fully leveraging his experience and resource advantages in traditional finance and compliance to lead Binance in communicating with regulatory agencies in a more stable manner.
As for CZ, as he said in an internal letter to all Binance employees a few days ago: "Binance will be fine, I will have to endure some pain, but I will get through it."
Making this decision must have been extremely difficult, but for Binance to continue moving forward, CZ chose to step down.
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