Original title: Binance Moved Fast, Broke Things-and Paid the Price.Richard Teng Is Cleaning Up
Original article by Joel Khalili, Wired
Original translation: Ismay, BlockBeats
Richard Teng does not want to be compared with former Binance CEO Changpeng Zhao. He said he wants to forge his own path instead of filling in the gaps left by others.
In November 2023, Teng took over as CEO of Binance after Changpeng Zhao (known in the industry as CZ) pleaded guilty to violating anti-money laundering regulations and US sanctions as part of a comprehensive settlement with the US Department of Justice, ending years of speculation about potential criminal offenses at Binance. CZ was subsequently sentenced to four months in federal prison, which he has served.
CZ founded Binance in 2017 and is a legendary figure in the crypto industry, known for his confident statements and active style on social media. Teng, on the other hand, is gentle, easy-going, and has a disarming smile. According to people familiar with the matter who told WIRED, he was well-received by Binance employees when he took office.
Teng, who has served as a regulatory official in Singapore and the United Arab Emirates, is now working to transform Binance from a challenger that circumvents rules, has an opaque corporate structure, and has no global headquarters to a more transparent and compliant company. He said that Binance currently has more regulatory licenses in multiple countries around the world than any competitor. In March of this year, Binance established its first board of directors, whose members are mainly composed of company executives.
Under Tengs leadership, strong growth in the crypto market has also helped boost Binances growth, with its user base growing from about 170 million to around 240 million. Teng said nearly 30% of those users signed up in 2024. Despite a legal dispute with the U.S. Department of Justice, Binance remains the worlds largest crypto exchange.
However, even as Teng is charting a new course for Binance, CZ’s influence lingers. Under a settlement with the Department of Justice, CZ is unable to directly manage Binance, but in late January he joined venture capital firm Binance Labs, which was recently renamed YZi Labs, as an advisor.
Ella Zhang, head of YZi Labs, insisted that the agency has been operationally independent of Binance since its establishment in 2018, contrary to some reports. But she also said that the agencys funds mainly come from the personal assets of Binances founders. At the same time, as Binances largest shareholder, CZ still has influence on major decisions of the company, which may limit Tengs room for reform.
Teng spoke to WIRED in January at the CfC St. Moritz conference in Switzerland. The following interview has been edited for brevity and clarity.
WIRED: Now that CZ has completed his sentence, he remains the largest shareholder in Binance. Are you in regular contact with him? What will his role at Binance look like in the future?
Richard Teng: My senior management team and I report to the board, but CZ is not on the board and I do not maintain regular communication with him.
However, he is the largest shareholder of Binance and still has shareholder rights. Even for large public companies around the world, shareholders have the right to vote on the direction of the company.
WIRED: But do you think it will be difficult to drive Binance into a new era when the companys founder—a person who is almost synonymous with Binance—is still the largest shareholder?
Richard Teng: Our goal is very clear, which is to build a world-leading, sustainable and top-level platform. In this regard, I work closely with the senior management team and the board of directors.
WIRED: How do you want the outside world to view the difference between the CZ era and the Richard Teng era?
Richard Teng: When CZ founded Binance in 2017, the industry environment was completely different - institutions had not yet entered this field, and there were almost no relevant regulations and regulatory requirements in the market. The environment then was very different from now.
When I took over, we had to adapt the company to a new industry environment - an environment that required higher compliance and where the regulatory system was gradually becoming clearer, although there were still inconsistencies and lack of coordination between jurisdictions.
We have invested a lot of resources in our compliance system. Currently, Binance has become one of the most regulated trading platforms in the world, with regulatory licenses in 21 different countries or regions. This is where we are headed in the future.
WIRED: What specific steps are you taking to ensure that Binance doesnt repeat the same mistakes and issues that led to CZ serving time in the past?
Richard Teng: Last year, we conducted nearly 100 training courses and workshops for law enforcement agencies around the world covering investigative techniques. Encryption technology is inherently traceable, and we want to emphasize how to use this feature to deter, detect and prevent the behavior of criminals.
We hope to work closely with our global competitors and law enforcement agencies to ensure the sustainable development of the industry and jointly curb illegal financial crime.
WIRED: Under the settlement with the U.S. Department of Justice, Binance is subject to external oversight. What does this mean in practical terms?
Richard Teng: We currently have two sets of external regulatory teams: one is designated by the U.S. Department of Justice, and the other is designated by the Financial Crimes Enforcement Network (FinCEN). We work closely with both teams.
Our goal is the same - to ensure continuous investment and strengthening of our compliance system. If there are any blind spots that we are not aware of, the Compliance Monitoring team is here to help. They review our compliance processes, request data, and make recommendations for areas that need improvement.
To me, thats very valuable. Its not just our own validation, but the independent, external validation that were actually moving in the right direction.
WIRED: In the past, Binance has positioned itself as a global company without a headquarters. How has that changed under your leadership?
Richard Teng: This is something we are very concerned about. As Binance is regulated globally, the two most basic requirements of the regulators are the establishment of a board of directors - we have already appointed the relevant members - and the establishment of a global headquarters.
We are in in-depth discussions about the location of our global headquarters, which is a complex decision-making process that requires consideration of multiple factors, such as whether we can establish a talent base in the country, whether the countrys regulatory framework is appropriate, etc. We are currently in in-depth communication with multiple jurisdictions.
WIRED: What is Binance’s strategy in the United States after the new Trump administration takes office?
Richard Teng: The US market is not our focus at the moment. Whether we will reconsider it in the future depends on how the local regulatory environment develops. Our current strategy is to focus on markets with huge growth potential around the world.
However, 2024 is indeed a milestone year. The United States approved the Bitcoin ETF, followed by many other jurisdictions. This change has turned institutional investors from skepticism to trust, and many institutions that previously took a wait-and-see attitude - including family offices, foundations, endowment funds, etc. - have begun to allocate crypto assets.
We believe this trend will continue to gain momentum in 2025, especially after the United States gets a pro-cryptocurrency president.
WIRED: What does having a pro-cryptocurrency government in the U.S. mean for the crypto industry as a whole?
Richard Teng: For a long time, the crypto industry has been striving for legitimacy and hoping to obtain clear rules and regulatory frameworks. The influence of the United States around the world is extremely important.
Under the new administration, President Trump will appoint regulators who are very supportive of cryptocurrencies. His discussion of establishing a strategic reserve of Bitcoin has changed the mindset of sovereign wealth funds around the world. Once the United States begins to consider this move, many countries around the world will follow suit.
Policymakers will be watching President Trump’s appointment of a new chief of staff for AI and cryptocurrency closely. There must be deeper considerations behind this, and other countries will also be considering whether to take similar measures.
What’s good for the industry as a whole is good for us as well.
WIRED: Are you in touch with David Sacks, the USs AI and cryptocurrency chief? What do you think of his appointment?
Richard Teng: The content of our private meetings is always kept confidential.
WIRED: Switching gears, I want to talk about the challenges to the trading platform business model. Over the past year, ETFs have provided investors with an alternative way to enter the crypto market. At the same time, peer-to-peer trading platforms accounted for one-fifth of the markets trading volume for the first time. How do you view these competitive pressures?
Richard Teng: We believe that the liquidity cost of obtaining exposure to crypto assets through ETFs is very high. ETFs can only be traded from Monday to Friday, while market news is 24/7. From a hedging and risk management perspective, ETFs are not the most ideal tool. ETFs are only the first step for investors to enter the crypto market, not the final destination.
As the crypto market becomes more mainstream and institutionalized, we believe both centralized and decentralized exchanges will continue to grow.
If we are to reach our goal of one billion users, we must continue to launch new product features. Last year, we launched the wallet and Binance Square (a social platform focused on the crypto space). Payments are also an important growth area - since launching Binance Pay two years ago, our transaction volume has reached nearly $26 billion.
In addition to trading fees - the core revenue source of the exchange platform - we will continue to explore other opportunities that can help users deepen their crypto journey.
