Original title: Binance Turns 6
Original author: CZ
Original translation: Wu said blockchain
On our 6th anniversary, let’s take this opportunity to look back, share our stories, and look forward to the future. Today, Binance is a platform that provides financial services to more than 140 million users around the world, and will welcome billions of new users in the future. And all of this started as just a dream.
Here, I would like to share with you some of the most important moments in this journey that have had the most profound impact on me:
Starting a business is difficult and arduous
Six years ago, with your support, Binance raised $15 million worth of crypto assets and started building a currency-to-currency platform. Two weeks later (six years ago today), Binance was born, with 5 tokens listed and 2 service languages. At that time, our customer service team was borrowed from my friend's company, and we didn't have our own marketing team.
Today, Binance has listed more than 600 tokens, provides service in more than 40 languages, and has a customer service team of thousands of people. Now, BNB Chain provides support from decentralized trading platforms to various storage applications.
Two months after Binance was founded, we encountered a severe test. On September 4, 2017, mainland China issued a ban on crypto asset trading platforms and ICOs. Chinese ICO projects had to return funds to investors.
As soon as the ban was announced, the prices of many tokens plummeted. Several projects listed on Binance even fell below their offering prices, and the project teams did not have enough funds to repay investors.
Our team did the math and called me to ask if we wanted to use Binance’s own funds to compensate these investors. The total amount was $6 million, which was definitely not a small amount at the time, but we agreed to do it. The call lasted only 5 minutes, and I was still on a moving train. A few minutes later, we released the announcement.
At that time, $6 million accounted for more than 40% of our total funds, which was the largest expenditure in Binance’s history. At that time, we were only a two-month-old startup, not yet profitable, and were still burning money on hiring, purchasing servers, etc.
But my only thought at the time was: protecting users.
Sure enough, as long as you do the right thing, the world will give you positive feedback. Our decision received strong positive feedback from the global crypto asset community, and many new users flocked to us. One month later, our user base reached 120,000 and began to make a profit.
And we have remained profitable ever since.
Meanwhile, we kept building and growing our user base. On December 18, 2017, I received a bunch of text messages from friends congratulating me. It took me a few minutes to figure it out: On that day, Binance became the world’s largest cryptocurrency exchange by volume, a position we still hold today.
However, Binance’s growth was not all smooth sailing. Just a few days later, a potential venture capital firm (Sequoia) filed a lawsuit against us. The lawsuit lasted for several years, and we finally won a comprehensive victory. Many Internet startups with large capital flows may not be able to survive such a long lawsuit, but fortunately, thanks to crypto assets, we have established a sustainable business model. A few years after the lawsuit ended, at our invitation, this potential investment firm also became a limited partner in Binance Labs’ second fund. I am happy to say that we still maintain a good relationship with them and most of the problems can be solved.
But this lawsuit also had a side effect on Binance, making it impossible for Binance to accept investment from VCs. As a startup, our risks have increased, but it may help us in the long run. We have been able to maintain flexible and independent operations.
The changing regulatory landscape
In 2019, I met with Asian Tier 1 regulators and they made it clear that they would not regulate crypto assets.
Even today, most countries still have unclear definitions of crypto assets as an asset class; but since 2019, there have been many news reports that regulators are paying more and more attention to crypto assets.
In April 2019, BitFinex was under scrutiny. I also set up Binance.US in full compliance with regulatory procedures to serve the US market. Today, Binance.US has obtained US MTL licenses (Money Transmitter Licenses) in 43 states.
Our operations around the world have proven that compliance and innovation can go hand in hand. We are proud to have obtained relevant licenses and registrations in 17 countries around the world, which also demonstrates our support for regulation and our extensive efforts in the field of compliance and regulation. We believe that regulations, especially those committed to protecting users and encouraging innovation, are extremely important to the long-term development of the industry.
These rules and regulations are necessary to build a robust, secure and reliable crypto asset industry. We are not only open to this, but also eager to work with policymakers to shape the future of digital assets.
The first cold winter
In January 2018, we hit a new high in the number of registered users (240,000 users registered in one hour). A few months later, the market began to decline, and in January 2019, it reached the market bottom, with the price of Bitcoin at around $3,000 (it had previously hit an all-time high of $20,000).
Undeterred, Binance continued to build. In January 2019, Launchpad went live and has been operating ever since.
It was this cold winter that made us realize how important prudent financial management is. This experience helped us save enough cash (crypto assets) in the 2021 bull market, allowing us to survive the 2022 bear market again.
The second winter
A few years later, we experienced a second crypto winter in 2022, which was even more volatile than 2018. But interestingly, Binance was barely affected by several “catastrophic” events in 2022.
In 2018, Binance invested in Terra, but has not actively managed the investment. When Terra started to have problems in 2022, the team asked me if I wanted to sell its tokens, and I said "Don't sell, we will continue to hold."
In this way, we witnessed that the $3 million initially invested in 2018 turned into $1.6 billion at the peak of Terra's price in 2021, and then fell to nearly $0 in 2022. To this day, the LUNA (now LUNC) tokens we received are still stored in our original receiving address, never moved, and never sold.
Binance has no exposure to 3AC (Three Arrows) and we have no lending or business relationship. They have an account on Binance, but their primary trading is on FTX.
Binance invested in FTX in the early stages and also fully exited in the early stages. That was a year and a half before FTX collapsed and before they made high-profile political donations. After FTX collapsed, we also tried to lend a hand.
We signed a letter of intent (LOI) to conduct deep due diligence, but soon found that we could not do the deal, and that was the extent of our involvement (non-involvement) in this matter. I believe that FTX must have been thoroughly investigated after its bankruptcy, and it is clear that Binance has no connection with FTX, otherwise Binance would have made a lot of headlines again.
But even so, some regulators or media always want to group Binance and FTX together. To this, I can only say: we are different. Just like not every investment company on Wall Street is Madoff.
Binance also had no investment or involvement in Genesis or Celsius. Binance.US (independent of Binance.com) tried to help Voyager by putting up a $10 million deposit but was forced to withdraw from the bidding and did not get the $10 million back.
2023 to present
In 2023, we see the market recovering, but at the same time, industry regulation is becoming stricter. This is not surprising based on what happened in 2022. And when regulators target the crypto asset industry, Binance is the first to bear the brunt because we are the largest. Therefore, it is also our responsibility to lead by example and work together with global regulators to promote the development of the industry.
I want to emphasize again that the future will not be smooth, but we will always put the interests of users first. We will continue to cooperate with regulators. In order to continue to protect users and fight for the rights of the industry, we will also defend what we believe is right, even in court.
Looking ahead
I think there will be several major trends in the future.
Traditional finance (TradFi) such as BlackRock, Citadel, and Fidelity have all entered the crypto market in a big way, which also confirms the development prospects of this technology and industry. They will gradually promote the popularization of crypto assets in the institutional market. Since institutional investors occupy most of the stock market, with a volume of hundreds of trillions of dollars, even if only a few percent is converted into crypto assets, it will expand the current crypto asset market several times.
DeFi will continue to grow at an accelerated pace. Newer wallet technologies will make it easier for users to hold crypto assets on their own. More and more people will use DeFi products to interact directly on different blockchains. This also provides a channel for people who do not have access to traditional financial (or banking) services to enter the financial market. I firmly believe that in the next 6 years or so, the market size of DeFi will definitely exceed that of CeFi.
Regulation will become clearer and more regulated trading platforms will be available. Although there is still much uncertainty, many countries will provide clearer guidance for the crypto market at a faster pace. There is no doubt that those countries that can do this first will enjoy a huge advantage that will last for centuries. We are at a critical moment in history.
User First
Before we decided to start Binance, we knew we were going to take a path that no one had taken before. But what we didn’t expect was that the community would be so powerful, accompanying us as we grew, shaping and supporting our every attempt and effort. You – Binance users – have been Binance’s most steadfast force from the beginning to the end, helping us continue to grow.
Every success and every milestone we have achieved today is inseparable from your commitment and dedication. Binance is not just our company, but also a vibrant and resilient community that sticks to its mission of enabling the free flow of money.
Our journey begins with our users and continues to be inspired by them. Every product and service we release, every innovation we introduce is centered on our users. The trust you place in us gives us a sense of responsibility, and it guides us to break the old rules and shape new industry standards.
We are symbiotic with our users. The real feedback from users guides us and pushes us in the right direction, which also makes Binance what it is today. More importantly than anything else, it is your passion and unremitting pursuit of a better crypto ecosystem that drives us to keep improving.
I am forever grateful to have walked this journey with you. You are the heart and soul of Binance, now and in the future.
CZ
