“In the 250th issue of Bloomberg Businessweek Chinese Edition (July 6, 2022), we made a serious mistake by publishing a false and unfounded cover headline... We unreservedly apologize to Mr. Changpeng Zhao and Binance, the company he founded, for any harm or distress caused.”
On July 17, in response to the cover title of the 250th issue of Bloomberg Businessweek Chinese Edition, "Zhao Changpeng's Ponzi Scheme", Bloomberg Businessweek Chinese Edition issued a statement on its official website, publicly apologizing to Zhao Changpeng and Binance. Once the statement was released, it quickly sparked heated discussions in the crypto community.
Reasons for Apology
What did the original report say?
First, the cover title. On July 6, 2022, the Chinese version of Bloomberg Businessweek used "Changpeng Zhao's Ponzi Scheme" as its cover title.
Second, the report quoted a so-called anonymous trader as saying that Zhao Changpeng was running a "Shitcoin Casino" and described Binance as an "unlicensed casino-style trading institution" in the report.
Third, the report mentioned that there is a conflict of interest in Binance’s business model. Given its scale, the price of tokens skyrocketed after they were listed on Binance, and trading activities increased dramatically before listing. It even mentioned events such as Terra and Luna.
In summary, the entire report is basically composed of a series of "black materials" and controversial points since the advent of Binance, plus the response of founder Zhao Changpeng (CZ) in an interview. The word "Ponzi" appeared many times in the report, and the Binance referral code mechanism was also described as having a "multi-level marketing" style.
In response to this apology statement, Binance officials also responded immediately after the Chinese version of Bloomberg Businessweek issued the statement.
"We are pleased to see that the false charges have been dropped. We will continue to focus on providing the best service and innovation for our users, while striving to set an example and ensure the healthy and sustainable development of the industry."
Such a vivid accusation would obviously have immeasurable negative impact on any company or individual.
Rather than exploring the truth of something, people prefer to judge from the perspective of following the crowd, which often becomes the last straw that breaks the camel's back. Various monsters and demons come and go, with badmouthing and conspiracy theories rising one after another.
But these thorns and mud have also made Binance what it is today.
What is Binance?
Reading this apology statement carefully, the word "standard" is particularly eye-catching.
The key elements that should have been presented in every report were finally found in the apology statement.
How many people would think "Ponzi" when this hat is put on CZ and Binance? Consensus? Bullshit!
Building faith requires a long cognitive process, but it can collapse in an instant.
In the development history of cryptocurrency exchanges, all those who wanted to eat their fill died, and some who could not eat fell behind early. In the early development of Binance, the focus was more on customer development, insisting on doing the right thing, just to give users a good experience. Founded in July 2017, it took only six months to become the world's largest cryptocurrency platform by trading volume. But for a long time afterwards, Binance did not break through the 50 million user mark, and even experienced the theft of 7,000 bitcoins. It was not until four years later that Binance reached this milestone in 2021.
It was hard to imagine that such a representative enterprise in the crypto industry would one day become a stone that shatters faith. Fortunately, the fact has already appeared before us, and fortunately Binance has done well enough.
If Binance does well enough, can it be considered a successful company?
It depends on how you define "success".
Microsoft CEO Satya Nadella put it this way, “A company’s success is defined by its economic impact, not by its high market capitalization.”
It's understandable why the market rewards those who take the long view handsomely.
In June this year, Binance's ecological development reached a key milestone, with 210 million registered users worldwide and over $100 billion in user funds. The user choice is inseparable from the strong performance of the cryptocurrency market, but more importantly, the fund security and brand service stability provided by Binance.
What are the difficulties in building a "skyscraper"?
There are problems such as structural stability under extreme conditions and vertical transportation after the building height increases. In the crypto world, He Yi summarized this process as "crossing the chasm". She believes that "crossing the chasm still requires real innovation drive."
541 carefully selected digital assets, 2,632 crypto asset trading pairs, 2.58 million QPS, 8 million Binance financial management users, and more than 24 million people around the world using Binance Payment for domestic or cross-border transfers. There is no doubt that when crypto assets are widely used for payment, the importance of this to the development of the crypto world and the economic impact it has on the real world is self-evident.
Binance is like the foundation of a building, providing a solid base for the building of the crypto world to rise to the sky. In the current market cycle, more and more funds continue to flow into the cryptocurrency ecosystem. As a centralized platform for holding user assets, Binance pays more attention to transparency and reliability than ever before. This has stimulated more people's interest in digital assets, activated the potential of asset tokenization, and directly promoted the development and improvement of supervision.
Binance has brought digital assets one step closer to mainstream adoption.
Binance has taken on much more than that, including an asset reserve proof system, a SAFU fund, an internal independent law enforcement request system, and a compliance team with approximately 750 core and auxiliary compliance personnel. Binance is the only one that holds operating licenses covering a total of 18 countries, the most among global crypto trading platforms.
From fund security and brand services to being a driving force for financial innovation in the crypto world, this is Binance.
Binance always faces crises
There is no need to consider which is more important: the groundless accusations or the unreserved apologies, because these are clearly not enough to cause any ripples in Binance's goal of pushing the crypto world forward steadily.
Looking at the entire industry, the biggest crisis always revolves around regulation, and this is not just for Binance.
First, the US regulator ended a years-long investigation and reached a settlement. Then, a US federal judge rejected the main claims of the US Securities and Exchange Commission against Binance. This is not a company winning in the game with regulators, but more of a result of Binance's determination to face the problem, assume corporate responsibility, and persist in building compliance control measures. Isn't this a personal involvement?
On June 29, a U.S. federal court ruled in favor of the U.S. Securities and Exchange Commission (SEC) that when determining whether a transaction is a securities transaction, the judgment should be made based on the specific circumstances, and the focus should not be on the tokens, which are not securities in themselves.
A federal court ruled that the SEC failed to allege facts showing that the cryptocurrency exchange’s sales of BNB tokens on the secondary market were securities transactions, while rejecting the SEC’s argument that Binance’s fiat-backed stablecoin BUSD was an investment contract.
Another important point is that this ruling recognizes that the SEC has significant limitations on its regulatory authority over the cryptocurrency industry. The regulatory framework in the crypto world is still unclear and has been limited by the definition of tokens. This ruling is undoubtedly a positive step forward for Binance and the entire cryptocurrency industry.
Looking back at CZ’s sentencing hearing, the judge said: “You risked your entire net worth just to make Binance successful.” Indeed, the $4 billion fine made history, and CZ was sentenced to four months in prison. However, the sentence was better than market expectations, and related historical issues were resolved, further consolidating Binance’s leadership in the global crypto market.
Apart from the huge fines and prison sentences, it is not difficult to find the answer from market feedback. Binance's efforts to explore compliance paths in the cryptocurrency industry are gradually bearing fruit.
"If new innovations emerge and you are unaware of them, that is the biggest crisis." - He Yi
Binance, which has been in the crypto world for seven years, has long seen the changes that blockchain technology has brought to the world and understood the importance of innovation. Similar crises and difficulties have accompanied every growth and hidden in every innovation since the first day of Binance's launch. What's important is that these have not become the straw that broke the camel's back for Binance.
On the contrary, just like CZ's resignation and Richard's succession, Binance has attached more importance to compliance in its transformation, turning Binance into a long-lasting company. Binance's persistence has made it move forward faster and faster on this thorny road. To this day, we still cannot predict the final direction of the crypto world. But Binance has shown the crypto world that these processes are constantly being created and written.
However, the development of the industry is a long road, and lone walkers are weak. The correction of the rules of the crypto world requires the joint efforts of the entire industry, from enterprises to regulators, from ordinary users to technology developers, everyone is an indispensable part of the development of the crypto ecosystem. Those who have cut through the thorns have already paved the way. If you want to see the crypto world flourish, you need more companions. Because the road ahead is still full of challenges, only in this way can we push the industry towards a more standardized, transparent and secure direction, and see the flowers blooming. #币安 #彭博商业周刊 #Apology Statement
