Six years of Binance: here is the entire statement by Changpeng Zhao (PART 2)

Binance turned six as announced by CEO Changpeng Zhao

by Lorenzo Ciotti
Six years of Binance: here is the entire statement by Changpeng Zhao (PART 2)

Binance turned six as announced by CEO Changpeng Zhao. This is the Second part of the letter Zhao wrote to his Binancians: " In 2019, I had meetings with a Tier 1 regulator in Asia. At that time, the officials clearly stated that they do not regulate crypto.

While we still don’t have clarity on how crypto is classified as an asset type in most countries, even today, there were a few news headlines indicating regulators were paying more attention to crypto starting in 2019.

Bitfinex came under scrutiny in April 2019. And I set up Binance.US to specifically service the US market, in a fully regulated manner. Today, Binance.US has 43 state MTLs (Money Transmitter Licenses). Globally, we have shown that compliance and innovation can exist hand in hand.

We take pride in our licenses and registrations across 17 countries, a testament to our pro-regulation stance and the extensive efforts we have made in compliance and regulatory space. We believe that regulations, especially those aimed at protecting users and fostering innovation, are instrumental in the long-term success of the industry.

Regulation is a cornerstone of a robust, safe, and secure crypto landscape, and we are not just open but eager to collaborate with policymakers to shape the future of digital assets.

The First Winter

While we saw record user registrations in Jan 2018 (240,000 users registered in an hour), a few months later, the market was in decline.

Jan 2019 marked the lowest point of the market. Bitcoin was around $3,000 (dropped from $20,000 ATH). We were unfazed and continued to build. We launched Binance Launchpad in Jan 2019, and have continued the program ever since.

It was through this winter that we learned the importance of prudent financial management. This experience greatly helped us in conserving our cash (crypto) in the 2021 bull market, and sustaining the 2022 bear market.

The Second Winter

Fast forward a few years, and we have gone through our second crypto winter in 2022.

This one was much more volatile than the one in 2018. Interestingly, Binance had minimal exposure to most of the “catastrophic” events in 2022. Binance invested in Terra in 2018 and never actively managed this particular investment.

When things started to unravel in 2022, our team asked me if we should sell the tokens. I said “no, let’s just hold”. So, we saw our initial $3M investment back in 2018 turn into $1.6bn at Terra’s 2021 peak, and then down to close to $0 in 2022.

Until today, the LUNA (now LUNC) tokens we received still sit on the address we originally received them on, never moved and never sold. Binance had no exposure to 3AC (Three Arrows). No loans and no commercial relationships.

They had an account with us but did most of their trading on FTX. Binance invested in FTX early days and exited fully at an early stage. This was one and a half years before they crashed. This was also before most of their high-profile political donations.

When FTX crashed, we tried to help. We signed a LOI to do a deep DD (due diligence) but soon found we couldn’t get involved in the deal. That was the extent of our (non) involvement in the matter. I believe through the exhaustive investigations that must have gone into FTX post its bankruptcy, it should be clear Binance had no involvement in FTX, or there would have been many more headlines.

Even then, a few regulators or news outlets tried really hard to group Binance and FTX together. To that, I will just say: We are different. Not every investment firm on Wall Street is Madoff. Binance also had no exposure or involvement with Genesis and Celsius.

Binance.US (independent from tried to help out in the Voyager case and put in a $10 million deposit payment. Eventually, Binance.US was forced to withdraw from the bidding process and never got the $10 million back."