“I think Ukraine is moving in a very positive direction.” Binance’s CZ talks about regulations, his investment strategies, and metaverse

Changpeng Zhao, who goes by CZ, is the founder and CEO of Binance, the largest cryptocurrency exchange in the world. He started Binance in 2017 after quitting OKCoin, and in less than a year, managed to grow it into the biggest player by trading volume. Today, according to Coinmarketcap, its daily trading volume is over $107 billion, and CZ’s personal net worth is about $1.9 billion, as estimated by Forbes. We asked Changpeng Zhao about Binance in Ukraine.

Today Binance closely cooperates with the Ukrainian government to make this industry more transparent and safe both for investors and companies. The biggest crypto exchange grows its activities in the country — in particular, Binance held its first offline meetup in Kyiv for a couple of thousand attendees.

AIN.UA talked to CZ about the Ukrainian Binance community, legislative initiatives, and collaboration with the government. He also shares his preferences in crypto for today and personal investment strategies.

Changpeng Zhao about Binance in Ukraine-3
Zhao Changpeng, chief executive officer of Binance, poses for a photograph in Tokyo, Japan, on January 11, 2018. Photographer: Akio Kon/Bloomberg. The picture is provided to AIN.UA by Binance

In September, the Ukrainian Parliament accepted a new law regarding virtual assets, effectively legalizing cryptocurrencies in Ukraine. What do you think about this legislative initiative? How will it affect the crypto industry not only in Ukraine but in general?

Regulation is essential for the crypto industry and will go a long way towards building trust with consumers and institutions interested in the space. However, it’s just as crucial for regulation to complement instead of hinder crypto’s growth. 

Effective regulations safeguard consumers while stimulating growth and innovation, while poorly crafted regulatory policy stifles growth and protects dated ineffective processes and institutions. 

I think Ukraine is moving in a very positive direction. All regulation initiatives bring the cryptocurrency industry to the legal field and a new level. The law’s adoption will enable asset classification, legal operation for crypto organizations within Ukraine, and users will be able to declare their digital assets and pay taxes on their profits. 

I also believe the law will attract additional capital to the country, foster a thriving crypto community, and help bring blockchain to the mainstream — all of which will have a positive effect on the Ukrainian economy. 

For Binance, it opens up new opportunities for expansion, growth such as partnerships from financial institutions to payment companies and much more. 

According to different research reports, Ukraine has one of the world’s most advanced crypto communities in terms of blockchain innovations and cryptocurrency adoption. Can you see confirming signs of that in user activity by region on Binance?

As one of the largest markets in Eastern Europe, Ukraine is most definitely a high activity region for Binance. Just recently, our Binance meetup in Kyiv gathered almost 2,000 people. So you can put two and two together; there is a massive community in cryptocurrency in Ukraine. 

Why it is important for Binance to collaborate with governments to regulate the crypto industry? How exactly do you participate? Will users benefit or lose from regulation? 

Regulators share the same mission with us, protecting consumers while encouraging innovation. The crypto market is young, and we want to see it evolve in a safe and responsible manner for its users. Increased regulatory scrutiny is a positive development for the whole industry. However, we fully expect bumps along the way as regulators work to find the most effective way to engage with the marketplace. We are committed to 100% compliance, globally, and all our teams have been working nonstop to achieve this. 

As industry leaders, we have the opportunity and will to lead by example and partner with regulators to move shared objectives forward. We are the largest crypto exchange because users trust us. We earned that trust through many decisions and actions that protected users. We want to share our best practices with the industry and regulators all around the world. We believe this will help shape a healthier industry.

As part of efforts to meet compliance with all local regulation guidelines, we’ve recently launched new products — such as Shyft Network’s Veriscope to Support FATF Travel Rule Compliance and our Tax Reporting Tool API so users can quickly meet their personal tax obligations — and reviewed our existing services, including updating Futures Leverage for New Accounts and restricting access to it in a number of markets and initiating a Mandatory KYC requirement across the platform.  

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We’re also searching across the globe for top-tier talents with a strong background in compliance. We recently hired  Greg Monahan, former US Treasury Criminal Investigator, as our Global Money Laundering Reporting Officer (GMLRO) and Binance Singapore appointed Richard Teng, former CEO of Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), as their new CEO, former GE and Edelman Communications Executive Patrick Hillmann as Binance Chief Communications Officer.  

As an example, in addition to the standard KYC/AML procedures, we recently began a push for industry players to be long term driven. We are pushing for longer unlocking schedules for founder tokens, from 2-4 years to 8-10 years. This is something that no regulators have asked for, but we believe it will help the industry become healthier.

What new or not so new blockchain projects personally inspire you and why? What possibilities do you see for investors and traders in those projects, tokens, or specific fields of crypto? 

Recent innovations have propelled GameFi into the mainstream, which is causing the industry to take a closer look at the area between blockchain gaming and DeFi. I personally see huge potential in Play to Earn Gaming Using NFTs (GameFi) in Decentralized Finance.   

I am also thrilled about Sports Fan Tokens. This is a new way for sports teams to engage their fans, and create mutual monetization mechanisms that didn’t exist before. I think this area has huge growth potential.

I’m one of those people who believe we live in a simulation and I believe the metaverse is going to be everywhere.  It’s possible — in the next 50 – 100 years, we’ll be simulating the reality we want to live in.

Can you share what assets you have in your own crypto portfolio and how often do you revise it? What is your investment advice for crypto fans for 2021?

I don’t give any financial advice — I’m too bullish about crypto (laughing).  

I personally still hold BTC that I bought in 2014, and all the rest are in BNB. For new investors, I recommend diversifying much more than I do and only invest in small amounts.

Crypto is highly volatile, and people should only invest with money they can lose.