WEBVTT - Binance CEO Richard Teng Talks Crypto

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<v Speaker 1>Bloomberg'sperience in Lacwa sat down with Richard Tang, the CEO

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<v Speaker 1>of Crypto Exchange Finance, as he celebrates a year in

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<v Speaker 1>the role. They discussed the rise in bitcoins price and

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<v Speaker 1>the impact that the Trump administration could have on market

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<v Speaker 1>sentiment and regulation.

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<v Speaker 2>It's been a year actually since you've been in charge,

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<v Speaker 2>so congratulations on the year. But what are the biggest

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<v Speaker 2>changes that you've implemented at finance?

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<v Speaker 3>Oh, thank you so much for having me on the show.

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<v Speaker 3>It's always a pleasure to be here. I do think

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<v Speaker 3>that we have moved away from a founder led CEO

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<v Speaker 3>led company firstly to a corporate structure that's a board

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<v Speaker 3>of director led company today, so we have seven independent

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<v Speaker 3>seven directors with three independent directors with an independent chairman

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<v Speaker 3>at the helm and the senior management, which include myself,

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<v Speaker 3>both very close with the board of directors to chart

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<v Speaker 3>our path going forward. I think that's one of the

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<v Speaker 3>significant changes. We continue to invest very heavily into compliance.

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<v Speaker 3>I think finance has always been a user first organization,

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<v Speaker 3>but now we have added another dimension to that in

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<v Speaker 3>terms of compliance span. We continue to increase it quite substantially.

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<v Speaker 3>In twenty twenty two, our compliance span was one hundred

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<v Speaker 3>and fifty eight million US dollars. That went up to

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<v Speaker 3>twenty thirteen million US dollars last year and this year

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<v Speaker 3>you'll go up even much more. Right, so, our compliance

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<v Speaker 3>account if you include know your Customers, Know your Business operations,

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<v Speaker 3>and about one hundred tech staff that just purely look

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<v Speaker 3>at how do you enhance the process, how do you

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<v Speaker 3>include AI to come about to bring about great accuracy

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<v Speaker 3>in the things that we do in terms of detecting

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<v Speaker 3>anomally getting much better results from things like surveillance, transaction monitoring,

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<v Speaker 3>Know your customer or your business, et cetera. Is totally

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<v Speaker 3>close to one thousand, three hundred people. So is a

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<v Speaker 3>very substantial increasing on that frame, and we continue to

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<v Speaker 3>invest reight heavily into compliance. We are now the most

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<v Speaker 3>regulated exchange globally with twenty regular approval around the world.

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<v Speaker 4>This is alone. You've gotten six.

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<v Speaker 3>Regulatary approval including in India, Argentina, Indonesia, Thailand, Kazakhstan and Dubai.

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<v Speaker 3>And that list goes on and hopefully we can announce

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<v Speaker 3>small good results before at the end of the year.

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<v Speaker 2>Richard, when you look at bitcoin and other cryptocurrencies. I

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<v Speaker 2>mean they're flying off the shelves. It is the Trump trade,

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<v Speaker 2>and actually, what are you expecting in terms of US

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<v Speaker 2>regulation and the impact this has on finance.

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<v Speaker 3>Well, President Trump being elected suddenly give a boost and

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<v Speaker 3>give greater clarity to this. But I will say that

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<v Speaker 3>twenty twenty four has been a landmark year, and that

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<v Speaker 3>momentum started earlier this year. So if you look at

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<v Speaker 3>what happened in January this year with bigcoin ETF being

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<v Speaker 3>approved firstly in the United States and the subsequently all

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<v Speaker 3>around the world from Brazil to Canada to Australia, Hong Kong,

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<v Speaker 3>and that list goes on. It gives a lot of

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<v Speaker 3>recognition and finally the rest fact that this sector deserves

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<v Speaker 3>all along and with the likes of all the largest

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<v Speaker 3>money manager and all the top financial institutions around the

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<v Speaker 3>world starting to recognize the value of this space, you

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<v Speaker 3>have Larry fin CEO of the largest money manager, Black

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<v Speaker 3>Rock in the world, that went from a crypto skeptic

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<v Speaker 3>to a crypto believer.

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<v Speaker 4>I think that it self peaks value.

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<v Speaker 3>So if you look at the Bitcoin ETF is the

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<v Speaker 3>best performing ETF so far in the I think in

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<v Speaker 3>the history of ETF right again. It shows that institutionalization

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<v Speaker 3>has started and mainstreaming has started.

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<v Speaker 2>And I mean, could the Trump administration change everything from

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<v Speaker 2>for cryptocurrencies.

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<v Speaker 4>Well, it's a big positive.

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<v Speaker 3>I think the last four years, especially if you're in

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<v Speaker 3>the United States, I think the last four years has

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<v Speaker 3>been pretty tough, right in terms of you know, regulation

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<v Speaker 3>bia enforcement, which is not necessarily the best form of regulation.

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<v Speaker 3>President we have a very pro crypto president. And if

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<v Speaker 3>you look at it's not only President Trump himself, but

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<v Speaker 3>the House of Representative toots of the legislator being elected

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<v Speaker 3>a pro crypto. The same stories happening at the Senate level.

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<v Speaker 3>Many pro crypto legislators and policy makers are being elected.

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<v Speaker 3>And you know, this give a lot of clarity. And

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<v Speaker 3>President Trump has said that he's going to come out

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<v Speaker 3>with their pro crypto frameworks to support the industry. The

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<v Speaker 3>discussion of a bigcoin US bigcoin reserve, really I think

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<v Speaker 3>it's also very important in that conversation. It's not only

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<v Speaker 3>the US that's looking at having a big cooiny reserve.

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<v Speaker 3>I think that's park conversation in many different parts of

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<v Speaker 3>the world. Different governments starting to look into this, and

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<v Speaker 3>that is a continuation of the momentum that we're going

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<v Speaker 3>to see. And I do think that I've said it earlier.

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<v Speaker 3>I do think that the golden year of crypto is

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<v Speaker 3>just beginning. We are six between six and seven percent

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<v Speaker 3>crypto adoption globally, and if you look at history, what

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<v Speaker 3>happened to Internet when you hit six to seven percent,

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<v Speaker 3>The next ten twenty percent will come very quickly. So

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<v Speaker 3>the pace of adoption will come very fast in the

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<v Speaker 3>future compared to what you have seen in the last

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<v Speaker 3>five years.

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<v Speaker 2>Richard, have you spoken or has anyone at Finance actually

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<v Speaker 2>spoken to President elect Trump and his team?

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<v Speaker 3>Well, I think we are not a US company. We

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<v Speaker 3>do not have operation Engine at the US, I think,

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<v Speaker 3>but as part of the crypto industry, we congratulate President

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<v Speaker 3>Trump on his election. US, as you know, have an

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<v Speaker 3>outsized influence around the world in terms of his policymaking

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<v Speaker 3>and rules, and I think that's a big positive, right.

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<v Speaker 3>So I do think that many regulators, especially today only

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<v Speaker 3>one of global regulators are regulating this space. So going forward,

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<v Speaker 3>you're going to see a lot more positive momentum, a

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<v Speaker 3>lot more positive sentiment towards this particular industry, which is

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<v Speaker 3>a big positive. So certainly wish President Trump and his

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<v Speaker 3>administration are the best in terms of supporting this industry, which.

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<v Speaker 4>Is to me, AI and blockchain are the.

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<v Speaker 3>Two important, the two most important technological advances that will

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<v Speaker 3>set the foundation and support every economic subsector from rested

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<v Speaker 3>to supply chain, financing to entertainment to financial service going forward.

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<v Speaker 3>So any countries would do very well to come up

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<v Speaker 3>with good policies mud regulations to support the innovative aspects

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<v Speaker 3>of these two technologies for managing the risk. Right, it's

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<v Speaker 3>going to bring in a lot for dire investment economic growth.

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<v Speaker 2>Are you looking more forcefully to re enter the US market?

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<v Speaker 2>And if he has, and what kind of time.

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<v Speaker 3>Frame at this point in time, you know it is

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<v Speaker 3>not under consideration, but you know, things always are fluid.

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<v Speaker 3>We will always keep everything under close review for every

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<v Speaker 3>market we deploy globally. Today we have more than twenty

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<v Speaker 3>four you two million customers globally. We're very happy without

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<v Speaker 3>global deployment and global efforts on that front. As I mentioned,

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<v Speaker 3>we're the most licensed exchange on a global basis. This

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<v Speaker 3>year alone, we saw sixty two million new users coming

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<v Speaker 3>on board and the pace of adoption as US compared

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<v Speaker 3>to last year. The number of institutions and corporate this

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<v Speaker 3>year has searched on our platform, so the number of

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<v Speaker 3>onboarding has more than double. So we'll continue to focus

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<v Speaker 3>our efforts in terms of global deployment in every region

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<v Speaker 3>where crypto users are looking for us to support their journey,

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<v Speaker 3>will be there.

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<v Speaker 2>Richard, how much are you looking at some specifics for

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<v Speaker 2>example for the US and there could be a framework

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<v Speaker 2>of stable coins which has been talked about by lawmakers.

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<v Speaker 2>If that were the case, would you reintroduced your former

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<v Speaker 2>stable coin BUSD or look at something else in the market.

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<v Speaker 3>I think let's let's not speculate on things that have

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<v Speaker 3>not happened. I think if you look at global rules

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<v Speaker 3>and regulations, many regulators are coming out with formulations of

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<v Speaker 3>stable coins, including Europe currently ad in terms of stable

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<v Speaker 3>coin regulations. We look forward to giving our feedback to

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<v Speaker 3>all the different governments coming out of our own with

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<v Speaker 3>their own framework to come up with smart regulations. Again,

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<v Speaker 3>as I mentioned, supporting the innovative aspects of the crypto

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<v Speaker 3>industry while managing the risk aspect.

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<v Speaker 4>Similarly, if we see.

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<v Speaker 3>Those regulations being released in the States, we're happy to

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<v Speaker 3>play our part. Giving our views and feedback from industry

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<v Speaker 3>participant perspective on what makes a good framework.

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<v Speaker 4>For participants as well as for users.

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<v Speaker 3>What sort of protection should they be accorded under those frameboards.

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<v Speaker 2>You mentioned more financial You know established financial institutions entering crypto.

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<v Speaker 2>What does it mean for crypto native platforms such as

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<v Speaker 2>finance they use your platforms and will that increase or

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<v Speaker 2>will they try and do another exchange.

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<v Speaker 3>We are very happy that there are more players coming

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<v Speaker 3>into this arena. It shows the mainstreaming right, so the

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<v Speaker 3>future is extremely right. We are very confident of what

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<v Speaker 3>we are doing. We have always been a user first organization.

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<v Speaker 3>As I mentioned, this is alone in terms of the

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<v Speaker 3>number of institutions, the corporates, the family officers, High Nightwork

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<v Speaker 3>individual onboarding on our platform. He has more than double

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<v Speaker 3>COMPAREDTIVE last year. A lot of trading desserts that in

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<v Speaker 3>the past are just trading commodities, fcs, stocks and bonds

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<v Speaker 3>are now adding a cryptodesk.

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<v Speaker 4>To their platform.

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<v Speaker 3>A lot of sovereign wealth funds, foundations and doowmands are

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<v Speaker 3>looking to increase their allocations. So we are really support

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<v Speaker 3>all the users in terms of their journey. Unlike many

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<v Speaker 3>of the trad five firms. Our platform operates on a

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<v Speaker 3>twenty four basis around the world, so operational robustness resilience

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<v Speaker 3>is extremely important. But it's also very important that people

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<v Speaker 3>have around the clock ability to make investments depending on newsflow,

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<v Speaker 3>to hatch risks depending on news flow, and to manage

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<v Speaker 3>their investment portfolio on a very effective basis, which many

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<v Speaker 3>of these other films will not offer, including investment into ETF.

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<v Speaker 4>Which is a great low cost products.

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<v Speaker 3>For retail investors that are not seven enough to really

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<v Speaker 3>treat crypto on some of the mainstream exchanges like olays.

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<v Speaker 4>But it's no VI's approach. Once they get to know

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<v Speaker 4>more about.

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<v Speaker 3>Crypto, are very confident they will gravitate to US exchanges

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<v Speaker 3>they offer them twenty four to seven services for sure.

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<v Speaker 2>There's also regulatory change foot in Europe. So when do

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<v Speaker 2>you expect to get your MIICA license in the EU

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<v Speaker 2>and what countries have where have you applied?

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<v Speaker 3>As you know, we are today regulated in six different

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<v Speaker 3>European Union countries. We have very close communications with all

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<v Speaker 3>our regulators and you know we welcome what the European

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<v Speaker 3>regulators have done in terms of make a framework giving

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<v Speaker 3>clarity to the industry as well as giving clarity to

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<v Speaker 3>users on the type.

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<v Speaker 4>Of investor protection they should look forward.

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<v Speaker 3>But you can appreciate all the conversations we have with

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<v Speaker 3>regulators are necessarily confidential in nature, so as and when

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<v Speaker 3>we have more news, we all share it publicly.

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<v Speaker 2>When will you select a global headquarter? This is the

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<v Speaker 2>question that I keep on that I'm sure you get

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<v Speaker 2>asked on a weekly basis.

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<v Speaker 3>Or not not necessarily weekly. I think I've answered that

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<v Speaker 3>question many times have people are not answer to that,

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<v Speaker 3>But these are a very serious question, right, so the

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<v Speaker 3>senior management of the firm to credit about our directors,

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<v Speaker 3>we spend a lot of time. There are a lot

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<v Speaker 3>of considerations, right, including things like taxation, whether the hub

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<v Speaker 3>can really support our talent going there to work as

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<v Speaker 3>a regulatory framework is being recorded, can it, you know,

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<v Speaker 3>manage a firm? We have different products, streets of our nature, etc.

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<v Speaker 3>So there are multile of considerations and these are very

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<v Speaker 3>complicated discussion. We are in deep talks with a few

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<v Speaker 3>jurisdiction and like you, I hope that we can make

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<v Speaker 3>a deliberation very soon and make those disclosure, but it

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<v Speaker 3>requires time and careful consideration, and again, once we have

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<v Speaker 3>reached a decision point, we're definitely share it with the public.

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<v Speaker 2>So can you give us an idea of where you're

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<v Speaker 2>looking at and whether you have to reapply for licenses

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<v Speaker 2>for global headquarters.

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<v Speaker 3>No, I think it's a different consideration for global headquarters.

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<v Speaker 4>Right.

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<v Speaker 3>So again we are very in deep talks in several

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<v Speaker 3>jurisdictions that's based in different regions around the world. Things

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<v Speaker 3>like double taxation, the regulatory framework, the regime, the ability

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<v Speaker 3>for us to have our h you know, experts and

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<v Speaker 3>our talent poo there. Those are key constitutions that you know,

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<v Speaker 3>we are in close composition that regulators.

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<v Speaker 2>So you can't tell us anymore.

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<v Speaker 4>I won't go anything beyond that.

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<v Speaker 2>Would you talk to me a little bit about you know,

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<v Speaker 2>whether I guess the model going forward will be more

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<v Speaker 2>joint ventures in local places or acquisitions of exchanges as

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<v Speaker 2>a means to grow.

0:13:30.280 --> 0:13:31.160
<v Speaker 4>Well, I don't think.

0:13:31.240 --> 0:13:33.400
<v Speaker 3>I don't think there's a one size fit all right,

0:13:34.679 --> 0:13:38.439
<v Speaker 3>A different mode of operations may be needed for different

0:13:38.520 --> 0:13:41.400
<v Speaker 3>regions and different countries. Even in the in the one region,

0:13:41.920 --> 0:13:44.360
<v Speaker 3>different mode of operations might be needed. I mean, we

0:13:44.440 --> 0:13:48.200
<v Speaker 3>have for the majority of the twenty regulatory approval that

0:13:48.240 --> 0:13:51.600
<v Speaker 3>we have. Majority of them are we apply on our

0:13:51.600 --> 0:13:55.960
<v Speaker 3>own right. There are a few that were acquired in

0:13:56.040 --> 0:14:00.200
<v Speaker 3>terms of existing financial institution firm that we acquired and

0:14:00.240 --> 0:14:04.920
<v Speaker 3>start operating, and there's I believe one joint venture so far.

0:14:05.360 --> 0:14:06.760
<v Speaker 4>So but different.

0:14:06.480 --> 0:14:09.240
<v Speaker 3>Models are needed, so we will always consider what's the

0:14:09.280 --> 0:14:12.760
<v Speaker 3>best and most appropriate model in terms of operations for

0:14:12.880 --> 0:14:13.680
<v Speaker 3>local deployment.

0:14:15.640 --> 0:14:18.840
<v Speaker 2>Binance also owns a piece of X. So have you

0:14:18.960 --> 0:14:21.760
<v Speaker 2>or CZ been personally in touch with Elon Musk since

0:14:21.760 --> 0:14:22.840
<v Speaker 2>the US elections?

0:14:24.520 --> 0:14:26.760
<v Speaker 3>Our team has been in touch with the X team.

0:14:27.600 --> 0:14:30.840
<v Speaker 3>I mean not only post election. I think we have

0:14:30.920 --> 0:14:34.040
<v Speaker 3>been in constant dialogue with the X team on that front.

0:14:34.720 --> 0:14:38.880
<v Speaker 3>So again, you know, these are investments. We do have

0:14:38.960 --> 0:14:42.120
<v Speaker 3>quite a lot of investments globally, and these are investments

0:14:42.160 --> 0:14:45.360
<v Speaker 3>that we know. We keep in close constant touch with

0:14:46.880 --> 0:14:48.600
<v Speaker 3>the companies that we've invested into.

0:14:50.120 --> 0:14:54.160
<v Speaker 2>So Binance is still also facing, of course, the investigation

0:14:54.240 --> 0:14:56.720
<v Speaker 2>by the SEC. Do you expect that to change and

0:14:56.760 --> 0:14:59.880
<v Speaker 2>to be dismissed now that Donald Trump is president elected

0:15:00.040 --> 0:15:04.000
<v Speaker 2>will become of course the president, and also now that

0:15:04.040 --> 0:15:05.280
<v Speaker 2>the SEC chair has.

0:15:05.160 --> 0:15:10.560
<v Speaker 3>Resigned, but there's an ongoing civil dispute between ourselves and

0:15:10.800 --> 0:15:15.160
<v Speaker 3>SEC is not criminal. This is not criminal investigation. It's

0:15:15.200 --> 0:15:19.560
<v Speaker 3>a civil dispute. We intend to defend our position faver robustly.

0:15:19.720 --> 0:15:23.320
<v Speaker 3>We're confident of that. So I think that's ongoing. Other

0:15:23.400 --> 0:15:26.960
<v Speaker 3>than that, you know, as with any dispute, we can

0:15:27.080 --> 0:15:31.160
<v Speaker 3>really go into the details or any discussion on that.

0:15:33.720 --> 0:15:36.440
<v Speaker 2>What the final question where, I mean, where do you

0:15:36.440 --> 0:15:38.960
<v Speaker 2>see bitcoin going? And actually if it, you know, can

0:15:38.960 --> 0:15:40.440
<v Speaker 2>it go to one hundred and twenty one hundred and

0:15:40.440 --> 0:15:42.760
<v Speaker 2>thirty very quickly? And then does it bring does it

0:15:42.880 --> 0:15:44.120
<v Speaker 2>lift other cryptos with it?

0:15:46.200 --> 0:15:48.680
<v Speaker 3>Well, at the beginning of the year in January, people

0:15:48.720 --> 0:15:50.560
<v Speaker 3>ask me where big coin will be by end of

0:15:50.600 --> 0:15:53.120
<v Speaker 3>this year. Right, So at that point in time, I

0:15:53.120 --> 0:15:55.840
<v Speaker 3>believe bigcoin was forty thousand. I said, you know, I

0:15:55.880 --> 0:15:58.040
<v Speaker 3>believe it will definitely be higher than eighty thousand.

0:15:58.400 --> 0:15:59.760
<v Speaker 4>I think I've been proven right.

0:16:00.240 --> 0:16:02.840
<v Speaker 3>I think it's you know, it's I don't have a

0:16:02.880 --> 0:16:05.960
<v Speaker 3>crystal ball to look into the future where the coin

0:16:06.040 --> 0:16:09.200
<v Speaker 3>price will be. What I see currently based on market trend,

0:16:09.600 --> 0:16:13.280
<v Speaker 3>is the very robust pan of demand for bitcoin right

0:16:13.320 --> 0:16:16.840
<v Speaker 3>from institutions, and you're seeing a lot of allocation. I

0:16:16.880 --> 0:16:19.560
<v Speaker 3>do think that if US come in with the strategic

0:16:19.600 --> 0:16:23.440
<v Speaker 3>Bigcoin Reserve and many other countries falling suit and sovereign

0:16:23.480 --> 0:16:26.280
<v Speaker 3>real funds endowment and the rest starting to do allocation,

0:16:27.040 --> 0:16:28.480
<v Speaker 3>I think those are big positive.

0:16:28.680 --> 0:16:31.320
<v Speaker 4>I do think that. I say that at the beginning of.

0:16:31.240 --> 0:16:34.320
<v Speaker 3>Twenty twenty four, and I'll repeat it here. I do

0:16:34.360 --> 0:16:36.640
<v Speaker 3>believe that twenty twenty five will be a better year

0:16:36.680 --> 0:16:40.960
<v Speaker 3>than twenty twenty four because, as with any institutional adoption,

0:16:41.120 --> 0:16:43.320
<v Speaker 3>which which started to see you only twenty twenty four,

0:16:43.840 --> 0:16:46.080
<v Speaker 3>many of the institutions we need your time to do

0:16:46.160 --> 0:16:49.400
<v Speaker 3>due diligence. Companies need time to do to diligence, and

0:16:49.440 --> 0:16:52.640
<v Speaker 3>that normally takes six nine months through the compliance program

0:16:53.040 --> 0:16:56.160
<v Speaker 3>before they are really to onboard and do investments and

0:16:56.280 --> 0:16:58.840
<v Speaker 3>allow their clients to come through those So I think

0:16:58.920 --> 0:17:01.680
<v Speaker 3>next year we'll be right for or that with much

0:17:01.720 --> 0:17:05.880
<v Speaker 3>more positive crypto regulations, firstly in the US and then

0:17:05.880 --> 0:17:09.680
<v Speaker 3>subsequently around the world. Again, that's another big positive. And thirdly,

0:17:10.000 --> 0:17:13.040
<v Speaker 3>in terms of interest rate environment, I do think that

0:17:13.080 --> 0:17:14.960
<v Speaker 3>for the majority of twenty twenty four, we are still

0:17:14.960 --> 0:17:17.320
<v Speaker 3>in a pretty high interest rate environment, and that has

0:17:17.359 --> 0:17:20.560
<v Speaker 3>come down, and I do believe that inflation is under

0:17:20.600 --> 0:17:24.040
<v Speaker 3>control in most countries and with a much more benign

0:17:24.160 --> 0:17:26.480
<v Speaker 3>interest rate environment. Again, that's going to be a big

0:17:26.520 --> 0:17:31.000
<v Speaker 3>boost for you know, rese assets throughout the world, including crypto.

0:17:31.280 --> 0:17:34.240
<v Speaker 3>So for all those key reasons, I do believe that

0:17:34.359 --> 0:17:37.400
<v Speaker 3>given the pace of crypto adoption, twenty twenty five will

0:17:37.440 --> 0:17:38.000
<v Speaker 3>be a better DAAR.

0:17:39.160 --> 0:17:41.800
<v Speaker 2>But twenty twenty four went from forty to one hundred.

0:17:42.520 --> 0:17:44.520
<v Speaker 2>I mean, just twenty twenty five go from one hundred

0:17:44.560 --> 0:17:46.600
<v Speaker 2>to one hundred to two hundred and fifty is at

0:17:46.680 --> 0:17:47.119
<v Speaker 2>the trend.

0:17:48.280 --> 0:17:49.360
<v Speaker 4>I wish I have a crystabal.

0:17:49.960 --> 0:17:52.000
<v Speaker 3>I wish I can make this picture, but I can't.

0:17:52.040 --> 0:17:54.560
<v Speaker 3>You know, but many people have made those predictions. Some

0:17:54.640 --> 0:17:55.600
<v Speaker 3>are extremely bullish.

0:17:55.640 --> 0:17:56.480
<v Speaker 4>I hope they are right.

0:17:56.920 --> 0:18:01.000
<v Speaker 3>Invested into crypto or for some time now, and I

0:18:01.160 --> 0:18:02.240
<v Speaker 3>definitely hope they are right.

0:18:02.720 --> 0:18:03.920
<v Speaker 4>But do your own research.

0:18:04.240 --> 0:18:07.840
<v Speaker 1>That was Binance CEO Richard Tang speaking with Bloomberg's Francine Laqua.