Our Response to the Latest Reuters Story
As a founder, I’ve learned that keeping strong, cordial relationships with journalists is a no-brainer. We work hard to respond quickly and accurately to their requests and, 99.9% of the time, this results in unbiased reporting. But on very rare occasions, the relationship can become so broken that operating in a mutual way is no longer possible. Unfortunately, that is the case with this Reuters reporter who has written a series of stories about us over the past several months, solely from anonymous sources. Earlier this year, because of this breakdown in trust, we took the unusual step of posting our full email chain with this Reuters reporter.
On Monday 10 October, they again came to us with a new list of questions on a wide range of topics, largely enquiring about 1) our commitment to compliance and 2) my personal leadership style. Those are fair topics that I’m happy to address. What’s unique this time is that they’ve signaled a new low and have crossed the line into indefensible territory. They have signaled an intent to report about my children.
Here’s why: Over the last two years, we have worked with global law enforcement to seize assets of criminal organizations around the globe. My toddlers are not in the public interest and this reporter would be knowingly putting them in harm's way by publishing information about them. This is unprincipled and intolerable.
Because we could not get assurances that this Reuters reporter would refrain from writing about my family, we have once again taken the unusual step of not responding to them directly. Instead, we are taking the story directly to the community. I’m going to try to break down a handful of topics they appear to be making accusations about.
Binance’s Commitment to Compliance
The crypto industry has grown at an unprecedented rate. As such, it has rapidly evolved as regulators also work at breakneck pace to develop regulatory frameworks that can stand the test of time, protect consumers, and allow for innovation.
Few companies in history have faced such complex challenges. When your market cap multiplies exponentially over a short period of time, there isn’t a manual that explains how to immediately pivot from a small start-up to a Fortune 100 organization. Nor can you snap your fingers and immediately hire the thousands of web3 engineers, security experts, project managers, etc. that you may require. As a result, like many start-ups, Binance was imperfect. But we are learning fast.
Since last year alone, we have hired more than 4,000 new employees, many of whom are in the compliance, investigations and security space. Today, Binance is a very different company than it was when it was founded. We have been working hand-in-glove with regulators across the globe to restructure our organization and upgrade our systems. Our global security and compliance team has grown to more than 500 employees across the globe and includes professionals with backgrounds as regulators, senior investigators from distinguished blockchain analysis firms and law enforcement agents who have led some of the largest investigations into cybercrimes. However, this is an effort that is never finished so we continue to invest in establishing a compliance framework users can trust.
We were the first major exchange outside of the US to “KYC” all of our users to ensure we can comply with international standards. “KYC” is short-hand for gathering the personal data to “know your customers” and is a critical aspect of a well regulated organization. To strengthen the credibility of the entire crypto ecosystem, we encourage all of the world’s crypto exchanges to do this as well.
There is a big myth about crypto being a tool of criminals. Reuters has reported that Binance had been used as a conduit for the laundering of at least $2.35 billion in criminal funds but failed to 1) provide any details of how that number is calculated and 2) note the fact this represents less than 0.1% of total funds that have flowed through Binance since 2019. Despite Reuters’ number being grossly overstated, it would still indicate that Binance is one of the most effective financial institutions in keeping illicit funds off its platform. We have zero tolerance for criminal activity.
My Leadership Style
This reporter at Reuters seems to think I am a “overbearing” and “secretive” leader who “micromanages employees.” In fact, I’m very transparent about my leadership style and every Binance employee has access to “CZ’s Principles,” a document that I wrote to codify my leadership style and regularly update as I learn new things. I realize not everyone will like my approach but it works for us. It’s an approach that I believe will work for start-ups like us but probably for more-established businesses too. Last week, I shared these ideas outside of Binance for the first time. I’ll let the document speak for itself.
Why Don’t We Share the Location of Our Offices?
This is actually similar to the argument about why I don’t want my family to be in the media. Over the last two years, we have worked with global law enforcement to seize assets of countless criminal organizations across the globe, which has directly resulted in cleaner crypto markets. So, we are careful when disclosing office locations, wearing Binance branding, or representing ourselves as Binance employees for security purposes. I want to keep our employees safe. However, regulators in each jurisdiction where we operate have our local address and contact details on file and we have announced major offices in Paris and Dubai. We have also set up a special part of the Binance website specifically for Law Enforcement.
The Tai Chi Powerpoint
This is an old story that I thought we had clarified but it seems Reuters doesn’t want to accept the facts. This is the tale of the so-called “tai chi powerpoint,” which was submitted by an external consultant as a suggestion on how to set-up a business in the US. Let me state clearly once again for the record: it was never implemented. I personally rejected it. The entire powerpoint is only seven slides long, lacks any actionable direction, and looks like a 5th grader put it together. The proposal was rejected after a presentation and a follow-up round of inquiries. Eventually, Binance.US was set up based on advice from leading US law firms. Today, Binance.US is licensed to operate across the United States, and operates independently from Binance.com.
How Do We Compensate Our Employees?
One of the great things about being in the crypto business is that we have more options on how to compensate our employees. Actually, you don’t have to be in the crypto business - any business can pay their employees all, or in part, in crypto. In our case, employees have an option to decide how they want to receive their salary - fiat, crypto or a combination - based on local laws in each jurisdiction. Importantly, they are expected to follow the tax laws of their home country without exception.
This is a far longer blog than I’d typically write. If you read my Principles above then you know I like to keep it short. That said, there is much more to write about on many of these topics and, over time, we will. For now, I’d like to reiterate my desire to A) have strong, open relationships with reporters at all outlets and, more importantly B) keep my family safe. Without assurances of B, I can’t commit to A.
I can live with the occasional negative news story - we’re focused on building and improving Binance and the blockchain ecosystem. We’re in this for the long haul. It’s never about tomorrow, this year or even next year. We are building a company that we believe will last a hundred years or more.