Author: Raymond, BlockBeats

Another year of Binance Blockchain Week has come to an end, and Bitcoin has strongly created a historical new high following Trump's election expectations. With significant volatility and excellent sentiment, the biggest beneficiaries are undoubtedly the trading platforms.

As the world's leading cryptocurrency trading platform, any action by Binance has a significant impact on the industry. Of course, in terms of trading, besides the large retail investor base, institutional investors are also a crucial part, and for Binance, institutions are, to some extent, even more important than retail investors.

To understand the operations and thoughts of institutional investors, BlockBeats had a chat with Catherine, the head of Binance's institutional and VIP business, during the Binance Blockchain Week. Catherine has extensive experience in traditional finance, having worked at both Morgan Stanley and J.P. Morgan, and joined Binance in 2021 to oversee institutional and VIP business, participating in several innovative projects at Binance, such as "Binance Wealth."

In the interview, Catherine introduced the operations of Binance's institutional and VIP business, and shared with us the changes at Binance in the post-CZ era, the impact of the elections, and the institutional perspective on crypto.

Why Choose Binance? What Are Institutions and VIPs Doing?

In every bull and bear cycle, whether it’s well-known multinational financial giants or professionals from various financial fields, countless industry elites from traditional finance are attracted by the charm of crypto. The entire crypto space has become even more vibrant with the addition of these traditional industry elites. From Morgan Stanley to leading Binance's institutional business, Catherine is one of those who have "crossed over."

BlockBeats: You previously worked at top institutions in traditional finance, Morgan Stanley and J.P. Morgan (both companies originated from J.P. Morgan but were split into two independent companies in 1935. Morgan Stanley became an investment bank, while J.P. Morgan turned into a pure commercial bank and developed into what is now JPMorgan Chase. Morgan Stanley is referred to as "Da Mo," and J.P. Morgan as "Xiao Mo"). Can you introduce your background and experience?

Catherine Chen: Many people coming from traditional finance to the crypto space typically have one of two backgrounds: the first is foreign exchange, and the second is derivatives. I have always dealt with derivatives, so for those of us in derivatives, "cryptocurrency" is a concept that is easy to accept and understand. I actually knew about cryptocurrencies quite early on, but I only decided to fully immerse myself in this industry in 2020. This is largely related to my professional background; those in derivatives are more likely to accept and embrace crypto.

However, I might be a bit different from the typical traditional finance professionals. I actually do not engage in trading business, such as placing orders in a trading room. I have always played a role similar to a "micro-entrepreneur" in the company.

When I was interning at Morgan Stanley, the firm wanted to enter the insurance market in Taiwan but was unwilling to spend a lot of costs or take high risks to explore. So, they handed this task to me, just an intern. From that moment on, I have been working on "market development and product innovation," successfully launching the first annuity-type product in the market in Taiwan.

Later, in 2014, I joined Morgan Stanley, which was the market leader in cash equity trading, but its derivatives business was not even in the top ten. At that time, they hired me to manage and oversee the growth of Morgan Stanley's entire derivatives business. I indeed went on to develop the entire derivatives market in Taiwan and then expanded to the Greater China region, achieving outstanding results. Before I officially joined Binance, I was responsible for all of Morgan Stanley's business in Greater China, except for cash equity, and during my tenure, I continuously launched new products and services.

BlockBeats: What factors prompted you to come to crypto and join Binance?

Catherine Chen: The reason I left traditional finance and came to crypto is that I felt that in banks, there was a lack of innovation, and there was extreme risk aversion towards new business ventures. In the first five years of my time at Morgan Stanley, I was able to successfully implement new businesses, and I helped the bank actually complete several projects, but later on, it became very difficult to push new projects forward. Committees in banks need to consider various issues, and no one is willing to lead or make decisions on new businesses. Everyone is reluctant to take on the responsibilities and risks that come with new ventures. You face endless committee negotiations, risk control, compliance, and legal issues, making it impossible to achieve true innovation in traditional industries.

I am very clear that I enjoy building and pushing new businesses. I want to pursue a "feeling of being alive" and experience a rich life. However, in banks, it is a top-down constraint. So, I resolutely decided to leave traditional big financial institutions and immerse myself in crypto with my passion. I want to be part of the future, not the past!

BlockBeats: From your perspective, what are the differences in investment preferences between retail and institutional investors?

Catherine Chen: Allow me to first introduce Binance's VIP Program. At Binance, all systems, departments, and activities are very transparent, including the VIP Program that I oversee. Binance VIP is divided into 9 different levels, with various criteria for classification. Ordinary users (i.e., retail investors) are at level 0, and everyone else can generally be referred to as VIPs. Whether you are an active trading user, a large holder, or investing in products on Binance, or engaging in lending on Binance, as long as you meet the threshold standards, you can become our VIP.

In levels 1-3 of VIP, we refer to them as high-net-worth clients. Many people do not know that, for example, holding $100,000 along with a certain amount of BNB can qualify you as VIP 1. From VIP 3 onwards, there will be more institutional clients, and at VIP 8 - VIP 9, there will be many high-frequency trading institutional clients.

So, what is the biggest difference between institutions and retail investors? Institutions typically use programs or APIs for trading, while retail investors do not have a technical advantage and usually trade on their phones. The vast majority of ordinary trading users typically engage in swing trading, new coin offerings, and wealth management, with relatively simple investment behaviors. Institutional users have a more diverse participation approach; in addition to pure trading, institutional users also engage in lending and other investments to maximize the utilization of funds.

Global Regulation from Binance's Perspective After the Elections

The bull market cycle of 2024 is initiated by the narrative of Bitcoin ETFs. After the positive developments, regulation has become the first hurdle for cryptocurrencies to integrate into the mainstream market. Whether it’s the SEC's FUD regarding certain tokens or the successive approvals of ETFs, regulation and crypto assets seem to be a pair of happy adversaries. At the same time, Trump's victory as the first "Bitcoin President" in history means an acceleration of the integration of digital currencies into mainstream assets. Catherine provided us with the institutional perspective and views on regulatory issues, believing that regulation of crypto is a positive development, and Binance will actively cooperate with and embrace regulation.

BlockBeats: Currently, Bitcoin and other mainstream cryptocurrencies are gradually being accepted by traditional markets. What is your view on the current regulatory issues surrounding Binance and crypto assets?

Catherine Chen: With the approval of the BTC ETF, regulation is an inevitable path for cryptocurrencies. The certainty of regulation and a clear regulatory framework are necessary. I believe the crypto industry has reached this point, and if it is to continue to shine, embracing regulation is an inevitable choice.

For Binance, we are also actively obtaining licenses in various regions. The certainty of the regulatory framework is very necessary. Moreover, as a global exchange, compliance is very important for Binance. If Binance wants to serve the next billion-level users, it needs to provide them with regulatory trust.

Originally, some government officials did not fully understand crypto, but since they have taken this step towards regulation, it shows they are willing to understand and accept crypto. Overall, regulation is a good thing for the crypto industry.

Binance is definitely embracing regulation and compliance, and we are very actively working on this. As of now, we have obtained licenses or registrations in 20 jurisdictions worldwide, ranking first among all centralized crypto asset trading platforms, and we hope that more friendly regulatory measures can be introduced in various regions. In the face of increasing regulation and laws, I believe this is a process of "educating" the traditional Web2 market. Currently, there are still more native players in the crypto industry, and we are also actively collaborating with regulatory departments, hoping to bring more people from outside the industry into Web3 to explore new frontiers!

BlockBeats: The biggest narrative right now is the U.S. elections, and the market is looking forward to the benefits that may come from Trump's victory. What adjustments do you think will be made in regulatory direction if Trump wins? What impact will it have on Binance?

Catherine Chen: Regardless of who is elected, Binance will continue to invest in compliance. Because compliance and regulation are not only important for Binance but also for the entire industry. Everyone is saying that the next era is that of institutional investors, and if Binance does not solidly comply and reach the same level as traditional finance, it will be difficult to gain the trust of traditional investors.

Of course, Trump has shown a friendly attitude towards cryptocurrencies in some public occasions, and we are optimistic about that. If Trump is ultimately elected, we hope his statements will be consistent. Overall, we are very optimistic, but for Binance, regardless of who is elected, our path remains steadfast.

What Changes Have Occurred at Binance in the Post-CZ Era?

BlockBeats: CZ can no longer participate in the operations of Binance. What do you think are the differences between Binance in the post-CZ era and before?

Catherine Chen: Personally, I really miss my boss. However, Binance is different from many other exchanges; we started internationalization early and brought in many non-OG talents for development. I have been with the company for three years; I decided to leave traditional finance in 2020 and joined Binance in 2021. The company's level of internationalization is already very good, and we are continuously bringing in experienced talents.

In my past three years:

First, the company's "core values" are very clear and have been consistently upheld from the early years to now. These "core values" are inheritable and will not disappear due to the departure of the founder or boss. Importantly, most of Binance's early co-founders are still with the company. This is something I find very admirable because, to be honest, they have long achieved financial freedom, yet they are still here, working for BNB holders, because everyone feels there is still a common goal to strive for. So even if the boss cannot return to lead the entire organizational structure, under the leadership of a professional executive team, the core values established at Binance will continue to be passed down.

Second, the company has actually been internationalized for a long time and has introduced a diverse range of professionals from different fields. My own transition to Binance is also a move from traditional finance. The bosses appreciate my experience in traditional financial institutions, saying, "Binance needs talents like you to lead the entire VIP and institutional business." In fact, during that time, the company already had a very good elite talent pipeline.

So, to be honest, there hasn't been much change at Binance since CZ left. We will not stop moving forward because of CZ's departure.

BlockBeats: As a leading exchange in the industry, what social responsibility do you think Binance bears?

Catherine Chen: I think the first thing we need to do is "lead by example." This is why Binance is currently taking the lead in compliance, and in other matters as well, we hope to establish true market gold standards.

At the same time, no matter what Binance does today, we deeply understand that we are responsible to our vast user base. So I believe everyone can see that whether it’s launching new products or various activities, Binance is fully aware of its social responsibility to users. Moreover, as a leading exchange in the market, we need to be even more cautious. Currently, Binance's main focus is on how to ensure the industry thrives for the next 50 or 100 years.

Binance's ambition is not just to be the leader in this industry, although we already are. We need to promote the entire industry to the next stage and make it bigger. Binance will not stop innovating just because we have grown; we are always thinking about how to bring more investors into the crypto asset investment space, allowing them to have a smooth transition.

For example, the launch of "Binance Wealth" on October 29. The purpose of "Binance Wealth" is to bridge the gap between cryptocurrencies and traditional finance. For a long time, the private wealth sector has lacked access to the traditional infrastructure for cryptocurrencies. Binance Wealth will lower the entry barriers for more market participants to enter this new asset class. In the context of "unlocking capital inflow is key to making crypto assets mainstream," I believe "Binance Wealth" has actively pushed the industry forward.

These are things that no one has done before; we have been working hard to timely launch the product solutions that this industry and market need.

BlockBeats: From the perspective of institutional and VIP trading, how do you view the future development of Bitcoin?

Catherine Chen: From the perspective of institutional clients, I think Bitcoin's positioning is still quite clear. As the most widely recognized investment target in the entire crypto industry, Bitcoin is viewed by large institutional investors as "digital gold," serving as a tool for risk diversification. From the perspective of institutional investors, I believe it will continue to move in this direction.

Although everyone is currently working hard to create more value applications for it, and there are many ecosystems and capable people building, I still think the "outcome is uncertain," which is worth paying attention to. If Bitcoin can find native applications, that would certainly be a better thing. However, from the perspective of institutional investors, there shouldn't be too much change. Bitcoin is typically used as a risk management tool to provide different performance returns in institutional investors' portfolios.

Bitcoin is not highly correlated with many mainstream assets and has the characteristic of 24-hour trading. The 24-hour trading feature allows institutional investors to better coordinate their portfolios and manage risk during traditional market weekends when trading is halted.

Regarding the future of Bitcoin, although I am not a Crypto OG, I am firmly optimistic about Bitcoin's future.

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