CZ's Open Letter to Binance's Sixth Anniversary: We Will Stand Up for What We Believe Is Right, Even If It Means Defending Ourselves in Court
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CZ's Open Letter to Binance's Sixth Anniversary: We Will Stand Up for What We Believe Is Right, Even If It Means Defending Ourselves in Court
Users are and will always be at the core and soul of Binance.
Navigating Web3 tides with focused insightsBy CZ
Dear Binance Users,
As we celebrate Binance's sixth anniversary, let us take this opportunity to reflect on our journey, share our story, and look ahead. Today, Binance serves over 140 million users worldwide and may welcome billions more in the future. Yet it all began with just a dream.
I would like to share some of the most defining moments that have shaped my experience along this path:
Humble Beginnings, Challenging Start
Six years ago, with your support, Binance raised $15 million worth of cryptocurrency to build a digital asset exchange. Two weeks later—exactly six years ago today—the Binance exchange was born, listing five tokens and supporting two languages. At the time, our customer service team operated out of a friend’s company office, and we had no dedicated marketing team.
Today, Binance lists over 600 tokens, supports more than 40 languages, and employs a customer support team of over a thousand people. BNB Chain now powers everything from decentralized exchanges to various storage applications.
Just two months after launch, we faced a major test. On September 4, 2017, the Chinese government issued a ban on cryptocurrency exchanges and ICOs, forcing Chinese ICO projects to return funds to investors.
Immediately after the announcement, prices of many ICO tokens plummeted. Several projects listed on Binance dropped below their initial offering price, and the teams behind them lacked sufficient funds to repay investors.
My team called me to discuss whether Binance should use its own capital to compensate these investors. The total amount was $6 million—a significant sum at the time. We unanimously agreed. The call lasted only five minutes, and I was on a moving train. Minutes later, we published an official announcement (link1, link2).
At that time, $6 million accounted for over 40% of our total capital—the largest single expenditure in Binance’s history by proportion. We were still a two-month-old startup, not yet profitable, burning cash on hiring and server purchases.
But my only thought was: protect the users.
And indeed, when you do the right thing, the world rewards you. Our decision received strong positive feedback from the global crypto community, and new users poured in. Within a month, we reached 120,000 users and began turning a profit.
And ever since then, we have remained profitable.
As we continued building, our user base grew steadily. On December 18, 2017, I received congratulatory messages from friends. It took me a few minutes to realize: that day, Binance became the world’s largest cryptocurrency exchange by trading volume—a position we’ve maintained ever since.
However, Binance’s growth hasn’t been smooth. Just days later, a potential venture capital investor sued us. The legal battle lasted several years, but we ultimately won completely. Many high-volume internet startups might not survive such prolonged litigation, but thanks to crypto, we had built a sustainable business model. Years later, upon our invitation, that same firm became a limited partner in the second Binance Labs Fund. I’m happy to say we still maintain a good relationship, and most issues can be resolved amicably.
Yet the lawsuit had side effects—it prevented Binance from accepting VC funding. As a startup, this increased our risk, but in the long run, it may have helped. We retained flexibility and operational independence.
Evolving Regulatory Landscape
In 2019, I met with top-tier regulators in Asia who clearly stated they wouldn’t regulate cryptocurrencies.
Even today, most countries remain unclear about how to classify crypto assets. But since 2019, increasing media reports show regulators are paying closer attention.
In April 2019, Bitfinex came under scrutiny. I fully complied with regulatory procedures by establishing Binance.US to serve the U.S. market. Today, Binance.US holds Money Transmitter Licenses (MTL) in 43 U.S. states.
Our global operations prove compliance and innovation can coexist. We’re proud to have obtained licenses and registrations in 17 countries, demonstrating our pro-regulation stance and extensive efforts in regulatory compliance. We believe rules—especially those protecting users and encouraging innovation—are vital for the industry’s long-term development.
With clear regulations, we can build a robust, secure, and reliable crypto industry. We don’t just welcome regulation—we actively seek collaboration with policymakers to shape the future of digital assets.
The First Crypto Winter
In January 2018, we hit a record high in user registrations—240,000 in one hour. A few months later, the market turned downward, reaching its lowest point in January 2019, with Bitcoin around $3,000 (down from a previous high of $20,000).
Binance wasn’t discouraged. We kept building. In January 2019, Binance Launchpad launched—and continues operating today.
This winter taught us the importance of prudent financial management. This lesson enabled us to save substantial cash (in crypto) during the 2021 bull market, helping us endure the 2022 bear market once again.
The Second Crypto Winter
Years later, in 2022, we experienced a second crypto winter—more volatile than 2018’s. Interestingly, during several “disastrous” events in 2022, Binance was barely affected.
In 2018, Binance invested in Terra but did not actively manage the investment. When Terra started showing signs of trouble in 2022, the team asked if we should sell the tokens. I said, “Don’t sell. Just hold.”
So we watched as our initial $3 million investment in 2018 grew to $1.6 billion at Terra’s peak in 2021, then collapsed nearly to zero in 2022. To this day, the LUNA (now LUNC) tokens we received remain in the original receiving address—never moved, never sold.
Binance had no exposure to 3AC (Three Arrows). We had no lending or business relationships. They held an account with us, but their primary trading occurred on FTX.
Binance invested in FTX early and fully exited early—about a year and a half before FTX collapsed, and well before their high-profile political donations. After FTX fell, we attempted to help.
We signed a Letter of Intent (LOI) to conduct deep due diligence, but quickly determined the deal wasn’t viable. That’s the full extent of our involvement—or rather, non-involvement. I believe FTX has undergone thorough post-collapse investigations, and clearly, Binance had no connection; otherwise, we’d be making headlines again.
Yet some regulators and media outlets still try to link Binance with FTX. To that, I say: we are different. Not every Wall Street firm is Madoff.
Binance did not invest in or participate with Genesis or Celsius. Binance.US (independent from Binance.com) placed a $10 million deposit to help Voyager but was eventually forced to withdraw from the bidding process and did not recover the deposit.
2023 So Far
In 2023, we see market recovery alongside stricter industry regulation. Given what happened in 2022, this isn’t surprising. When regulators target the crypto industry, Binance is often first in line—not because of wrongdoing, but because of our size. Therefore, it’s our responsibility to lead by example and work collaboratively with global regulators to advance the industry.
Let me reiterate: the road ahead won’t be easy, but we will always put users first. We will continue working with regulators. To protect users and advocate for the industry, we will defend what we believe is right—even in court.
Looking Ahead
I see several key trends shaping the future.
Traditional finance giants like BlackRock, Citadel, and Fidelity are entering crypto, validating the technology and industry’s potential. They will gradually drive institutional adoption. Since institutional investors dominate stock markets—managing hundreds of trillions of dollars—even a small percentage shifting into crypto could multiply today’s market size several times over.
DeFi will continue accelerating. Improved wallet technologies will make self-custody easier. More people will use DeFi products to interact directly across blockchains. For those excluded from traditional financial (or banking) services, this opens access to financial markets. I firmly believe that within the next six years, DeFi’s market size will surpass CeFi’s.
Regulation will become clearer, and more exchanges will operate under regulatory frameworks. Despite current uncertainties, many countries will move faster to provide clear guidance for crypto markets. Countries that act first will gain significant advantages—advantages that could last centuries. We stand at a pivotal moment in history.
User First
Before founding Binance, we knew we were taking an uncharted path. What we didn’t anticipate was the immense power of the community—accompanying our growth, shaping and supporting every attempt and effort. You—the Binance users—have been our unwavering foundation, enabling continuous growth.
Every success, every milestone we celebrate today stems from your commitment and dedication. Binance is not just our company—it’s a vibrant, resilient community united by the mission of enabling free flow of money.
Our journey began with users and continues to be inspired by them. Every product, every service, every innovation we launch is user-centric. Your trust instills in us a profound sense of responsibility—one that drives us to break conventions and set new industry standards.
We are symbiotic with our users. Your honest feedback guides our direction, pushing us forward and shaping today’s Binance. Above all, your passion and relentless pursuit of a better crypto ecosystem fuel our constant improvement.
I will always be grateful for this journey we’ve shared. Now and in the future, you remain the core and soul of Binance.
CZ
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