Valuetainment - May 14, 2026


＂They Paid People To Spy On Us＂ - Binance's RUTHLESS Rise To The World's BIGGEST Crypto Empire


Episode Stats


Length

15 minutes

Words per minute

184.68

Word count

2,858

Sentence count

208


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode of the Bitcoin and Bitcoin Plus Podcast, I sit down with one of the founders of CZ Cash, a Bitcoin exchange that reached a billion dollars in profits in one year. In this episode, we talk about how CZ got to that point, how they went from $200k in revenue to $1B in profits, and how they got their first billion dollar valuation.

Transcript

Transcript generated with Whisper (turbo).
00:00:00.040 Okay, when I sell my business, I want the best tax and investment advice.
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00:00:30.000 People are believing what you're going to be doing.
00:00:31.840 They're sitting there, you know, they're believers of what CZ is going to be doing.
00:00:35.360 At what point was it when you're like, guys, this thing's off to the races.
00:00:40.140 We built some special.
00:00:41.080 When did that happen?
00:00:41.980 I think it was about a month after launch.
00:00:43.980 So we launched in July 14th, 2017.
00:00:46.940 A month after launch, we were like, we were growing.
00:00:51.200 The first three weeks, the BNB price was actually underwater.
00:00:54.140 It was below the ICO price.
00:00:55.380 So that was like high pressure period.
00:00:56.620 and then about a month later
00:00:58.200 but a week
00:00:59.300 the next week
00:01:00.440 B&B price went 29x
00:01:02.440 right
00:01:03.080 this is like 2,900 times
00:01:05.020 in one month
00:01:05.840 2,900%
00:01:07.680 in one week
00:01:08.600 in one week
00:01:09.740 in the fourth week
00:01:11.260 and then that's when I
00:01:12.820 okay
00:01:13.060 this thing might work
00:01:14.240 if it stays
00:01:15.160 and also our
00:01:15.920 we look at our user growth
00:01:17.680 on the platform
00:01:19.000 the users were growing like this
00:01:20.400 so there were real users
00:01:21.900 with real trading
00:01:22.860 and then it was about
00:01:24.400 I forgot
00:01:25.100 it was like maybe
00:01:25.840 two months three months in ask our finance like no how are we doing financially the guy said well
00:01:30.820 we're making a couple hundred bitcoins like like i thought that number was wrong i was like there's
00:01:35.200 no way we're making that kind of fees couple hundred bitcoins but back then bitcoins were
00:01:39.940 maybe like three thousand dollars or it's not like a hundred thousand dollars today uh well not
00:01:43.920 like seventy eighty thousand dollars today um but like it's but yeah it was like a couple hundred
00:01:50.160 bitcoins uh on on on revenue i was like there's no way that's correct and so we double checked
00:01:55.940 the numbers we're like okay then we got this correct but then we got a we probably got a
00:01:59.800 viable business wow 200 bitcoins a day no no not a day like over over a period of time over that
00:02:05.460 that few weeks that you're talking about over like maybe one or two months i i don't yeah and you
00:02:09.660 know in your mind that's a lot at that point like things are starting to pick up for us six hundred
00:02:13.460 thousand dollars right 200 bitcoins at 300 at uh three thousand dollars am i saying it correctly
00:02:18.780 $600,000.
00:02:19.800 Yeah.
00:02:20.320 I think so.
00:02:21.100 So things started growing.
00:02:23.260 And then how long did it take you guys
00:02:24.560 until you got the billion-dollar valuation?
00:02:26.540 I took a...
00:02:27.620 So we...
00:02:28.800 I don't know when the valuation is,
00:02:29.980 but we are one of the fastest companies
00:02:32.380 to reach $1 billion in profits.
00:02:34.500 I think that took about a year.
00:02:36.440 Profits took one year?
00:02:38.080 Yeah.
00:02:38.440 Not Rev.
00:02:39.300 Not Rev.
00:02:39.820 Not Rev.
00:02:40.180 So it's profits.
00:02:41.360 Yeah.
00:02:42.420 Well, at the time,
00:02:43.900 profits and Rev is pretty similar.
00:02:45.760 Because your margins are so...
00:02:46.980 Because our team is small.
00:02:48.520 our cost is low at that time.
00:02:51.180 At that time, AT&T is very small.
00:02:52.520 And so, yeah, that's about a year.
00:02:56.520 So at that time, who are the major,
00:02:58.520 who are the top five biggest players in crypto Bitcoin
00:03:01.520 in 2017, 2018?
00:03:03.520 Yeah, there was Polonex, which was the biggest.
00:03:05.520 And then later on, Btracks became the biggest
00:03:07.520 by the time we launched.
00:03:08.520 Who else?
00:03:10.520 Coinbase was up there, but not the biggest.
00:03:12.520 There was a Bitflyer in Japan who was like,
00:03:14.520 you know, pretty big, the biggest for a while.
00:03:18.520 Bitfinex was the biggest for a while, too.
00:03:22.640 Who else?
00:03:23.280 Those were kind of like the three or four players.
00:03:25.480 Got it.
00:03:25.760 So a billion dollars in profits.
00:03:28.560 Did you yet sense that you're making enemies or no?
00:03:32.600 Everybody is good with you guys.
00:03:34.140 You're not getting weird phone calls.
00:03:35.660 People are not upset at you.
00:03:37.100 Other people are not experiencing envy.
00:03:38.680 Or did you start experiencing enemies?
00:03:40.580 We started experiencing jealousy even from day one.
00:03:43.640 Even before, like just from day one we launched,
00:03:46.160 people were like
00:03:47.540 competitors
00:03:49.700 other exchanges
00:03:50.480 were somewhat hostile
00:03:51.300 but that's just competition
00:03:52.780 so that's just
00:03:53.480 business competition
00:03:54.240 nothing dirty
00:03:55.060 some of them are
00:03:57.080 a little bit
00:03:57.820 borderline
00:03:58.520 so there's a lot of
00:03:59.940 smear articles
00:04:00.700 that are sponsored
00:04:01.740 by our competitors
00:04:02.920 which is great for us
00:04:03.980 which is great for us
00:04:05.240 because we're
00:04:05.740 a new platform
00:04:06.440 we couldn't afford
00:04:07.460 their advertising money
00:04:08.320 and they were talking
00:04:08.940 about us
00:04:09.940 so
00:04:11.140 there has been
00:04:13.220 attacks
00:04:13.900 what we call FUD
00:04:14.680 fear, uncertainty
00:04:15.880 in doubt basically false news um for even from day one um but uh but that's i think i thought
00:04:22.000 that was just business competition um the regulatory scrutiny came much later um the
00:04:27.700 regulatory scrutiny came like 2020 like three four years later yeah the year one where you're going
00:04:33.540 zero to a billion in profits and you guys are getting oh my god we got 200 bitcoins what are
00:04:37.200 you talking about that what does your schedule look like year one oh that was the year one was
00:04:41.900 crazy give me the schedule what does it look like what are you doing i basically will go
00:04:45.220 home to sleep uh from like 2 a.m to about 6 a.m uh like that's returning home and leaving home
00:04:52.060 right so that's shower and sleep in between and then i will probably take a nap in the office
00:04:56.640 like around 2 to 2 to 3 p.m somewhere around there like depending on who's in who's what
00:05:02.260 meetings we have uh and the team probably did the same uh very similar stuff for like basically a
00:05:07.680 year um uh the whole team was in the office the whole time um the office is very high like very
00:05:13.220 like very loud it's just buzzing with energy it's just people yelling over each other it's like a
00:05:17.100 flea market um so yeah that was like the first year and um it was just constant issues constant
00:05:24.380 uh constant stuff happening yeah you missed that actually some of part some part of me do um the
00:05:31.340 there's a there's a feeling that people really miss it's like fighting with fighting the trenches
00:05:36.300 with your comrades, with your teammates,
00:05:38.600 that's a very rewarding feeling.
00:05:41.140 It's a very strong social connection.
00:05:44.340 But honestly, I don't think my body can handle it now.
00:05:48.240 When you tell the story and you go through a phase like that,
00:05:51.420 the average person, they won't believe it
00:05:53.000 when you tell them the story.
00:05:53.940 Oh, yeah, yeah, yeah.
00:05:54.900 Most people cannot imagine how hard we work.
00:05:56.880 Were you ever hospitalized for anxiety, for exhaustion?
00:05:59.800 Were you ever experiencing like dehydration
00:06:01.740 where you had to go and get yourself IV?
00:06:04.180 No, I have not.
00:06:05.280 But other people on our team have.
00:06:06.860 On your team.
00:06:07.600 Yeah, yeah, yeah.
00:06:08.140 Other people on our team.
00:06:09.120 So I tell people entrepreneurship is a physical demanding activity.
00:06:14.540 It's not just mental.
00:06:15.420 It's a physically demanding activity.
00:06:18.480 Our CTO still use eye drops from today.
00:06:21.440 From those days, he got an eye infection.
00:06:23.380 He had to use eye drops.
00:06:24.640 He still uses that.
00:06:25.700 Till today.
00:06:26.040 Till today.
00:06:26.660 So he's still there.
00:06:28.080 He's no longer CTO now, but he's still there.
00:06:30.460 He's one of the co-founders.
00:06:31.400 The original people that were there,
00:06:33.200 is it fair to say they're all financially successful
00:06:35.960 beyond the wildest imagination?
00:06:37.980 They all are successful.
00:06:39.200 And you guys are all friends still.
00:06:40.400 You guys have relationships together.
00:06:41.720 That's a beautiful thing about building something like that.
00:06:43.880 And 80% of the co-founders are still with the company.
00:06:47.360 I'm actually one of the person that, you know, stacked back.
00:06:51.800 And also, even the people who left, we're friends.
00:06:56.300 So my co-founders made money.
00:06:58.960 So there's a saying, especially in the Chinese communities,
00:07:01.960 that, you know, I have been a pretty good leader
00:07:03.940 that, you know, actually did my people well.
00:07:05.780 That's good.
00:07:06.440 And by the way, would you consider yourself Chinese?
00:07:09.640 Like if somebody asks you nationality,
00:07:11.820 would you say I'm Chinese?
00:07:12.780 No, I think I'm definitely, like, so I'm ethnicity-wise,
00:07:16.400 I'm Chinese, right, by blood.
00:07:17.880 But my thinking, my way of doing business,
00:07:20.100 my mental process is much, much more Canadian, U.S. even.
00:07:24.400 Canadian, U.S.
00:07:25.400 Yeah, like I think my English accent is more U.S. centric,
00:07:30.320 even though it may not be perfect.
00:07:33.360 But the way I think and I do business
00:07:35.340 is much more U.S. capitalist.
00:07:37.960 Western ideology.
00:07:39.320 Western ideology, freedom-driven, et cetera, yeah.
00:07:42.880 So let's go back to Binance.
00:07:44.380 So you're at a billion.
00:07:45.880 You're starting to get some articles
00:07:46.920 being written about you.
00:07:48.400 You're getting some enemies coming to you.
00:07:50.820 At this point, has Sam Bankman-Fried
00:07:53.240 started anything or nothing yet?
00:07:54.980 No, no, no.
00:07:55.660 He started way later.
00:07:56.720 He started, earliest I met him was January 2019.
00:08:00.860 So you start 17, you don't meet him till 19.
00:08:04.080 Yeah, yeah.
00:08:04.700 And does he have a name in the market?
00:08:06.280 Like, do people know who he is or nothing yet?
00:08:08.100 No.
00:08:08.560 When I met him, I didn't know who he was.
00:08:10.060 Our client manager tells me,
00:08:13.200 Alameda was a pretty decent trader,
00:08:15.680 a pretty big trader on Binance.
00:08:16.920 Like, okay, who's Alameda?
00:08:18.220 Okay, I'll go shake his hand.
00:08:19.760 Got it.
00:08:20.200 And Alameda was him?
00:08:21.860 Yeah.
00:08:22.320 Okay.
00:08:22.800 Okay, so in the market now, by 2020,
00:08:26.020 who is Binance by 2020?
00:08:30.320 By 2020, Binance has been the biggest crypto exchange for more than three years.
00:08:37.520 So people just view Binance as the largest crypto exchange.
00:08:41.040 But at that point, back to back to back, you're the King Kong of the space.
00:08:44.880 I wouldn't say King Kong. Binance was the largest centralized exchange.
00:08:49.120 But there's decentralized, there's blockchains, there's other things,
00:08:52.960 there's stablecoins, there's other businesses in the ecosystem.
00:08:55.840 The criticism that some people give is, and I wonder, of course,
00:08:59.200 course it's a strategy when it's the zero fee strategy that you had how did you guys what was
00:09:04.500 your thinking behind that what what prompted you to say we're not going to charge a fee here's how
00:09:09.280 our approach is going to be and you know the market's going to react to it how did that idea
00:09:14.560 come about i think it's a very simple business idea where um you want to put you want to provide
00:09:19.680 no a large amount of value and you only want to realize a small portion of it so you want to
00:09:23.720 provide a value of 10 and hopefully only take five for yourself.
00:09:29.680 If you can do that consistently, people will do a lot of business with you.
00:09:33.100 Your customers will come to you and you will grow quickly.
00:09:35.420 Why didn't others do it?
00:09:36.500 If it's such a simple thing, why didn't the other guys do it?
00:09:39.060 I think a lot of people have in their heads that they want to maximize their cut on each transaction.
00:09:44.920 What you want to do is actually you want to minimize your cut on each transaction
00:09:48.120 and you want to increase the number of transactions.
00:09:50.200 So you multiply the scale.
00:09:52.060 the scale many people just don't can't handle it many people just want to like you know i want to
00:09:57.360 take the maximum that's possible that's that's harsh but if but for example if you look at some
00:10:02.820 of the largest businesses google uh google makes fees on advertising but they provide a lot of free
00:10:08.140 infrastructure in in the internet space um the time clock that we use is probably synced by with
00:10:13.920 a google time server and that's completely free um the dns services that you know is completely
00:10:18.960 completely free so they provide a lot of infrastructure to run the internet completely
00:10:22.800 free they just make money from advertising like from some ads and now the ads is covered coverage
00:10:28.900 is more spread across different products but for years they only advertise on search like gmail was
00:10:34.740 no ads um google maps was no ads for years right so but they were able to make enough money to
00:10:40.880 sustain themselves we had the same we were in a very lucky for the same fortunate problem a situation
00:10:46.720 where our revenues from a small amount of business
00:10:50.000 from a few businesses were able to sustain us
00:10:52.440 to provide more free services to everyone
00:10:54.640 so that we can grow the industry,
00:10:56.220 we can grow the crypto industry.
00:10:58.100 And so if you provide a value of 10
00:11:00.800 and you charge only two and you can sustain yourself
00:11:03.200 and you can scale, your business will grow really fast.
00:11:06.700 So many people don't realize that.
00:11:08.320 You actually want to charge the minimum fee,
00:11:10.580 the minimum cut that you are sustainable
00:11:12.700 and hopefully you can scale.
00:11:14.820 If you can do that, you'll make way more money
00:11:16.460 than you charge eight or nine.
00:11:18.360 So where's the real money made with Binance?
00:11:21.280 Trading fees, actually.
00:11:22.500 Trading fees.
00:11:23.060 Just trading fees.
00:11:24.080 When people trade, we charge a small commission
00:11:25.980 or Binance charges a small commission.
00:11:28.060 That's, yeah.
00:11:29.480 Comparable to others,
00:11:30.800 how much lower are you compared to others?
00:11:33.320 I think compared to some,
00:11:34.800 especially some of the US players,
00:11:36.320 we're probably 20x lower.
00:11:38.420 20x lower.
00:11:39.260 Yeah, yeah, yeah.
00:11:39.940 So in some places.
00:11:42.140 So, yeah.
00:11:43.780 So we provide the lowest fees in the non-U.S. markets.
00:11:52.120 We don't have access to, like, that fee, we don't have access to the U.S. markets yet.
00:11:57.140 Got it.
00:11:57.760 So 20 times less than competitors.
00:12:00.840 So that got the world to come to you.
00:12:04.260 So then you have volume.
00:12:05.840 Did other people try to replicate that model as well?
00:12:08.820 People do.
00:12:09.340 People try, yeah.
00:12:10.280 To make it a zero fee, like a very low fee?
00:12:12.340 People try.
00:12:13.060 People even try to pay users to trade on them.
00:12:17.980 People try to have all kinds of different models.
00:12:19.760 Has anybody succeeded as wildly as you guys did coming out?
00:12:25.380 No, I would say no.
00:12:27.980 Fees is important.
00:12:29.360 Fees is one part.
00:12:30.300 There's other parts like how you protect users,
00:12:33.240 how good is customer service,
00:12:35.840 how well you do things overall,
00:12:37.460 how good is your technology.
00:12:39.360 There's multiple things in play.
00:12:40.940 But fees is important, I think.
00:12:42.620 So can you give me some numbers? Because when I look at the numbers that I pulled up with what you guys have done, some of these numbers are wild when you look at the stats.
00:12:51.480 So lifetime trading volume, $125 trillion. Total users, registered users globally, 280 to 300 million registered users.
00:13:00.900 At peak, you held 70% of market share during zero fee promotions.
00:13:05.520 Closest competitor, Bybit, only 8% of market share.
00:13:09.080 Revenue estimate, $16 billion to $20 billion in 2024, 2025,
00:13:13.120 two and a half times Coinbase.
00:13:14.800 I mean, I can go through a lot of these numbers.
00:13:17.460 It's insane what some of the things.
00:13:18.900 At peak promotions, 85% of total weekly volume was zero fee.
00:13:24.480 Market share skyrocketed from 50% to 70%
00:13:26.700 when you announced a zero fee Bitcoin trading on July of 2022.
00:13:32.340 Some of these numbers are staggering.
00:13:34.640 At what point were you, when did the company's valuation hit $100 billion?
00:13:41.020 Oh, actually, I don't even know.
00:13:42.860 I'm not sure if that happened yet.
00:13:45.320 What was the biggest milestone you guys celebrated?
00:13:48.420 What was something where even you were shocked by it?
00:13:51.000 I think we, well, Binance generally counts number of users.
00:13:54.600 That's probably the easiest milestone.
00:13:56.640 Trading volume, it's pretty easy to count as well.
00:13:59.420 Valuation, Binance is a private company.
00:14:02.020 Got it.
00:14:02.780 I don't think Binance has ever done a deal, had a raise or had a...
00:14:06.720 The numbers you will hear about is $100 to $300 billion.
00:14:09.240 But to you, it's a private company, so you don't even know what it's worth.
00:14:12.080 There's no transaction at those valuations.
00:14:13.740 So those are estimates by third parties.
00:14:15.800 But the company has never raised money at those valuations.
00:14:19.380 So, yeah.
00:14:20.980 But the thing we, for me personally, as a shareholder,
00:14:24.800 not running the company anymore, I just look at the user numbers.
00:14:28.040 I just said, look, and they publish that publicly.
00:14:31.180 So, you know, 300 million, 315 million.
00:14:34.120 Those are good numbers to service you.
00:14:37.240 Pretty wild.
00:14:37.840 To service users.
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