Exclusive: Changpeng Zhao on Binance’s Plans in Georgia, Investments in Twitter, FTX, and More
The CEO of Binance visited a crypto exchange event in Tbilisi, where during the press conference, he spoke about the company’s plans to expand in Georgia, investments in Twitter, and support of Elon Musk. The businessman commented on the FTX situation and rumors about his role in the collapse of the company, compared CBDC and cryptocurrencies, talked about the attitude to economic sanctions, and answered other questions of concern to the community.
The Binance Community Meetup was held in the capital of Georgia on November 30. The event took place in the multifunctional space Republic and gathered many participants from the local crypto community. The main guest of the event was Changpeng Zhao.
The CEO of Binance interacted with journalists at a press conference held at the Tbilisi Marriott Hotel. Representatives of local and major international publications, including Forbes, Bloomberg, and others gathered to ask CZ their questions.
The key points that Changpeng Zhao made during the press conference:
- Binance is still a startup.
- In Georgia, the CEO of Binance had a meeting with Prime Minister Irakli Garibashvili. In particular, the need for more regulatory clarity for the market was discussed. In the future, the company plans to significantly increase its presence in the country. In addition, there are plans to invest on the local blockchain industry and technology sector, to launch educational programs in Georgia with the participation of higher educational institutions. The government has already expressed willingness to “give great support” to Binance initiatives.
- Binance is the most closely scrutinized organization by regulators, so it operates only in crypto-friendly jurisdictions. Wherever the company goes is a sign for the entire industry.
- The closer any company is to the blockchain industry, the easier it is to attract investment.
- The collapse of FTX will ultimately make the industry more transparent and healthier in the long run. Large exchanges will now be forced to disclose their asset holdings using Proof-of-Reserves to avoid losing user trust.
- Binance did not buy FTT on the secondary market but received it after the exit of FTX. The decision to sell the asset was made after a CoinDesk report on FTX’s liquidity problems. Binance may look like the guilty party of FTX’s collapse, however, the company’s problems have been piling up for a long time. Therefore, the FUD effect of Binance announcing the sale of FTT and the resulting liquidity crisis result from systemic problems within the company. However, it might look like a provocation from the outside.
- Sam Bankman-Fried probably lied to a lot of people: users, regulators, his employees, and investors. However, the verdict will be decided by a court of law.
- In February, Forbes announced plans for Binance to invest $100 million in the publication, but that was not the final decision. Due to circumstances, the deal ultimately didn’t take place. At the same time, Binance invested $500 million in the purchase of Twitter by Elon Musk and fully supports the actions of the new social network management.
- Binance.US is an independent company, which operates in the U.S. market. It is the second largest among U.S. crypto exchanges. Changpeng Zhao is the chairman of the board of this company.
- Comparing central bank digital currency and cryptocurrencies, the CEO of Binance named several advantages of cryptocurrencies: decentralization, deflation mechanisms, accessibility, and confidentiality. At the same time, CBDCs will accelerate the global adoption of cryptocurrencies and promote the integration of the blockchain industry and traditional finance.
- Cryptocurrencies do not help avoid economic sanctions.
The following are the most exciting quotes by Changpeng Zhao, according to CoinsPaid Media editors, which elaborate on most of the points highlighted above.
About Georgia and Binance’s plans for development in this region:
“We will have an office in Georgia for sure. There are already two people working in the local Binance team, and it looks like our Georgian office will grow very quickly. For example, a year ago, we went to Dubai, and at that time, we also had two people in the local team. Now we have 600 people in Dubai. We hope for a similar pace of work in Georgia as well.”
About Binance’s relevance to any state’s crypto sector:
“Binance is the most scrutinized organization by regulators around the world. There is no other company that is subject to more scrutiny than us. So, we will only operate in crypto-friendly jurisdictions. If a country bans cryptocurrency, we have nothing to do there.
Wherever we go is a sign to the whole industry that the local authorities have done their homework and that that country is cryptocurrency friendly. We went to Dubai and a lot of people with crypto businesses went to Dubai. We went to Paris, and a lot of people followed there, too. We hope we can do this for Georgia as well because it’s an indirect way of attracting investment to the country.”
About the benefits of blockchain business:
“A global online business, such as a cryptocurrency wallet or a new blockchain network, has an advantage in the blockchain sector. Such products are clearer to the community and easier to attract investment too. Such products include blockchain games, social networks, and software.
E-commerce already loses in this sense because it has a logistic angle, a barrier to working internationally. Although we think that even fiscal businesses from fields like logistics or agriculture connected to blockchain technology still have an advantage because today, the closer you are to the blockchain industry, the easier it is to raise money.
Blockchain technology makes it relatively easy to raise investments. ICOs, IDOs, and other methods make it very easy for entrepreneurs to raise $10 million in a matter of days. At the same time, traditional fundraising for a brand-new project would take years. So, we do think that fundamentally, cryptocurrency will make it easier for entrepreneurs in Georgia to attract foreign direct investment.”
About the biggest cryptocurrency crashes of 2022 and the positive long-term impact they have on the industry:
“Events such as the collapse of Luna and UST are damaging to the industry as they cause financial losses, significantly shake user confidence, and attract intense regulatory scrutiny. After the FTX bankruptcy, regulators will look much more closely at the protection of users’ assets, so we’ll get much heavier regulations in the future. But that might not be such a bad thing in the long run.
The industry needs to be more transparent. And we have the technology to make that happen, a mathematical way to prove that user assets are safe — Proof-of-Reserves. Other players will have to use this mechanism to ensure they don’t lose user trust. That’s why many things that look bad in the short term make the industry healthier in the long term.”
Changpeng Zhao’s predictions on the short- and long-term outlook for the cryptocurrency market:
“The industry has proven to be extremely resilient. Other exchanges have already occupied the FTX niche, and the total trading volume did not decrease. The short-term outlook can be very painful for many users and not good for the industry, but things are not so bad in the long term. The cryptocurrency industry will continue to grow.”
“The cascading effect gets smaller with each time. Genesis and BlockFi, which are having problems, have likely been effective, but we don’t know what to expect from each business. It’s been three weeks since the FTX collapse. We may have already seen most of the consequences of this event, but such things cannot be known for sure. Hopefully, most affected companies will recover, but I don’t know for sure.”
“There are a lot of people, retail traders, who had money on FTX and actually lost those funds, at least a significant amount of them. The liquidator will probably be able to get some of that money back to users, but it will take a while.”
Central bank digital currency (CBDC) vs. cryptocurrency:
“The more digital currencies there are, the better. Central bank digital currencies have their pros and cons versus native cryptocurrencies. I don’t think they’re quite the same. Central bank digital currencies are likely to be of unlimited supply, while BTC, ETH, or BNB issuance is limited. CBDCs will have permissions, and their transactions will be controlled; while cryptocurrencies are on your journey, you don’t have to transfer anything. There are many questions about CBDCs in the context of privacy.
On the other hand, the introduction of digital currencies will familiarize many people with blockchain technology. Crypto exchanges will be able to integrate with bank blockchain networks so that users can directly make cryptocurrency deposits in fiat currencies or, conversely, withdraw digital assets to a bank card. Such features already exist but will become much more accessible and easier to implement. In addition, digital currencies may differ from country to country, so we are talking about a very generalized version of what we perceive today as CBDC.”
About economic sanctions and the possibilities of avoiding them with cryptocurrencies:
“As a business, we are one hundred percent neutral. We are against war, but not against any nation, any individual, or population of any particular country; we have no choice but to follow the sanctions’ rules. We have many licensed entities around the world, and each of them has to follow the rules locally and globally.
Cryptocurrencies don’t help avoid sanctions because they are too traceable. Transactions on the blockchain network are permanent and publicly available, and the tools for on-chain analysis are very proficient, so it’s hard to use cryptocurrencies to avoid sanctions and not get caught. Paying in cash or using traditional financial systems is much easier.
Our view is that by imposing sanctions, a country is essentially punishing itself. Sanctions are dividing the world; it’s bad for business, it’s bad for the public, it’s bad for everyone in general. Our opinion doesn’t matter. We just have to follow the sanctions’ rules.”
About Binance’s investment in Twitter:
“We wanted to support free speech. Freedom of speech is a prerequisite for freedom of money, which we’re trying to increase. Twitter is a global “town square” where people come together to discuss topics and voice their opinions. Binance uses Twitter to communicate with its audience, and we want to support the tools that we use.
Twitter is a platform that hasn’t been fully disclosed yet. A lot of people are using it, it’s very simple, but it’s also very forward-looking. Sometimes you have to make drastic changes, so as investors, we fully support Elon Musk and the new team. I think Elon has done a great job. If he has made any mistakes, he will definitely adjust quickly and fix them. We need to allow entrepreneurs and strong leaders to make mistakes, experiment, and move on. We see that the speed of progress and innovation on Twitter right now is incredible, even though nothing much has changed on Twitter in the last year or two. But changes have started, and it’s right.”