Binance is celebrating its 6th anniversary. From the withdrawal of funds from China to the suppression by US regulation, the exchange has not had a smooth year. The company's CEO (CZ) delivered the full text of his speech, in which he pointed out that after two cold winters in the crypto industry, it is now ushering in a new future trend. The trillion-dollar scale of traditional Wall Street finance entering the Bitcoin spot ETF will easily expand the size of the crypto market in 6 years.

CZ pointed out that in 2019, he had a meeting with Asian regulators, who made it clear that they would not regulate crypto assets. Even today, most countries still do not clearly define crypto assets as asset classes. But since 2019, there have been many news reports that regulators are paying more and more attention to crypto assets.

Back in April 2019, the crypto exchange BitFinex came under scrutiny. Cz explained: “I also set up Binance.US in full compliance with regulatory procedures to serve the US market. Today, the exchange has obtained US MTL licenses (Money Transmitter Licenses) in 43 states.”

He also emphasized: "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 supervision. 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 together,”

But it is clear that the regulatory environment is still not friendly to Binance US, as the U.S. Securities and Exchange Commission (SEC) has taken action to sue the exchange.

The first cold winter

In January 2018, Binance hit a new high in the number of registered users, with 240,000 users registering in one hour. A few months later, the market began to decline, and in January 2019, it reached the lowest point in the market, with the price of Bitcoin at around $3,000, having previously hit a record high of $20,000.

CZ said that Binance was not scared off, but continued to build. In January 2019, Binance Launchpad went online and has been operating ever since. He said: "It was this cold winter that made us realize how important prudent financial management is. This experience helped us save enough cash in the 2021 bull market, allowing us to survive the 2022 bear market again."

The second winter

A few years later, Binance experienced a second crypto winter in 2022, which was more volatile than the one in 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. CZ said: "When Terra started to have problems in 2022, the team asked me if I wanted to sell its tokens. I said no, we will continue to hold."

“And just like that, we’ve watched the $3 million we initially invested in 2018 turn into $1.6 billion at the peak of Terra’s price in 2021, and then fall to nearly $0 in 2022. And to this day, the LUNA tokens we received remain in our original receiving address, never moved, and never sold,” he told investors.

Binance has no exposure to Three Arrows Capital (3AC), and there is no lending or business relationship between the two. 3AC has an account on Binance, but its main trading is still on FTX.

Binance invested in FTX in its early stages and also fully exited it in the early stages. That was a year and a half before FTX collapsed and before they made high-profile political donations. CZ also mentioned: "After FTX collapsed, we also tried to lend a hand."

He pointed out: “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 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 that we are different. Just like not every investment company on Wall Street is Madoff,” he clarified.

Binance also did not invest in or participate in the formation of Genesis and Celsius. Binance US, which is independent of Binance.com, invested $10 million in a deposit to try to help Voyager, but was eventually forced to withdraw from the bidding and did not get the $10 million back.

2023 to present

CZ pointed out that in 2023, we can see that the crypto market is recovering, but at the same time, industry regulation is becoming more stringent. 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 reiterate 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,” he added.

Looking ahead

Traditional financial institutions (TradFi), including BlackRock, Citadel Securities, and Fidelity Investment, have 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.

The development of decentralized finance (DeFi) will continue to accelerate, and 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. For people who cannot access traditional financial or banking services, this also provides them with a channel to enter the financial market. CZ emphasized: "I firmly believe that in the next 6 years or so, the market size of DeFi will definitely exceed CeFi."

“Regulation will become clearer and more regulated trading platforms will be available. Although there is still a lot of 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 huge advantages, and this advantage will last for centuries.”

“We are at a critical moment in history,” CZ concluded.