CZ’s First In-Depth Interview After Pardon: On the $4 Billion Fine, the Price of Freedom, and “Secrets That Cannot Be Spoken”
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CZ’s First In-Depth Interview After Pardon: On the $4 Billion Fine, the Price of Freedom, and “Secrets That Cannot Be Spoken”
CZ admitted that once wealth reaches a certain level, money becomes merely a line and no longer brings additional happiness.
Navigating Web3 tides with focused insightsCompiled & Translated by TechFlow
Guest: CZ
Host: Chamath Palihapitiya
Podcast Source: All-In Podcast
Original Title: Binance CEO: 4 Months in Prison, $4 Billion Fine, and What Comes Next
Air Date: February 10, 2026
Key Takeaways
A four-month prison sentence and a $4 billion fine—the most expensive tuition in crypto history—gave CZ a fresh lens through which to re-examine the world.
In this episode, Binance founder CZ speaks publicly for the first time about his journey from an immigrant child to the founder of the world’s largest cryptocurrency exchange. He no longer shies away from sensitive, uncomfortable truths: life under travel restrictions, chilling “gang advice” from correctional officers, and the real story behind his falling out with SBF. From flipping burgers at McDonald’s to stepping down as Binance CEO, CZ shares his origin story, pivotal career turning points, and insights into the future of crypto—a tokenless educational empire called Giggle Academy, and a next-generation payments vision led by AI agents.
TechFlow has compiled this two-hour conversation, aiming to help you cut through the fog surrounding a multi-billion-dollar net worth.
Highlights Summary: Five “Confessions” from CZ After His Return
1. On Life Behind Bars: Fear, Misunderstanding, and the “Luxury” of Freedom
Outside observers have indulged in sensational speculation about CZ’s prison experience—but he candidly reveals the real fear and absurdity he endured.
- Fear of Extortion and the “Gang” Mix-up: CZ admits that after sentencing, media outlets widely labeled him “the richest prisoner in history,” triggering intense concern that he’d become a target for extortion inside. On his first day, a correctional officer advised him to “join the Pacific Islander gang for protection”—a suggestion that sent him into immediate panic. Later, he realized it was simply because Asian faces were rare, so he’d been assigned to a small, six-person minority cohort—and suffered no bullying whatsoever.
- Redefining “Luxury”: The taste of freedom revealed itself in the smallest details. CZ recalls the prison shower stall as narrow as a box—turning around meant bumping into walls. Upon release, his most “luxurious” pleasures were “showering in a spacious stall where I didn’t hit the walls” and “seeing a plate of fresh fruit.”
- The 26-Minute Exit: On the day of his release, the entire process—from walking out the prison gate to boarding a flight out of the U.S.—took just 26 minutes.
2. On Regulatory Battles: Psychological Warfare, Handcuff Photo Ops, and Forced Relinquishment
Inside the negotiation behind the $4 billion penalty—and the hardest compromise any founder could make.
- The DOJ’s “Psychological Warfare”: CZ describes the negotiations as “hellish.” He reveals the Department of Justice (DOJ) is adept at deploying a “silence tactic”—remaining completely silent for two weeks after rejecting a proposal, using that time to break down the opponent’s psychological resilience. He believes they knew precisely that “two weeks is the optimal pressure window.”
- The Failed “Handcuff Photo Op”: Though the judge ruled no supervision was needed, the DOJ strongly pushed to handcuff CZ on the spot and take him away. CZ suspects this was purely for a photo op—intended for public relations—and was relieved when the judge rejected the request.
- Tears While Resigning as CEO: Stepping down from Binance’s management wasn’t voluntary—it was part of the plea deal. CZ admits this was his hardest decision, one that brought him to tears. Yet he realized only by letting go could Binance survive in an increasingly anti-crypto regulatory environment.
3. On SBF and FTX: Refusing to Take the Fall, Setting the Record Straight
CZ directly refutes the conspiracy theory that “Binance destroyed FTX.”
- Already Out of the Picture: CZ stresses Binance had fully exited its equity stake in FTX over a year and a half before its collapse—in July 2021—and had zero knowledge of its internal financial condition.
- “He Wanted to Kill Us in This Industry”: CZ reveals details of his rift with SBF: even while Binance held equity in FTX, SBF actively smeared Binance behind the scenes in Washington D.C., and even lured away Binance’s VIP account managers with salaries five times higher. CZ states plainly that SBF weaponized regulation against competitors.
4. On Future Frontiers: AI Agents Will Redefine Crypto Payments
Post-CEO CZ has turned his gaze toward a much longer horizon—this episode’s biggest Alpha (wealth signal).
- AI Agents Are Crypto’s Largest User Base: CZ offers a highly forward-looking thesis: In the future, each person will run hundreds or even thousands of AI agents in the background. These agents cannot open traditional bank accounts (they can’t pass KYC), meaning they’re inherently forced to use cryptocurrencies for value transfer.
- Explosive Growth in AI Transaction Volume: He predicts that the vast majority of high-frequency on-chain trading and fund transfers will soon be executed by AI agents—far surpassing human scale and frequency.
- Giggle Academy Will Never Launch a Token: Regarding his new education initiative, CZ declares unequivocally: “We will not issue a token.” He believes introducing token incentives (“Learn-to-Earn”) would turn users into “airdrop miners,” fundamentally undermining education’s core mission.
5. On Wealth and Life: A Leaky Roof and the “Ordinary Person”
Stripping away the “richest man” label to reveal a low-key, inner-peace-seeking CZ.
- The “Leaky Roof” Metaphor: Despite his billions, CZ reveals he lives in a “third- or fourth-hand old house,” where the living room ceiling leaks every month—but he doesn’t mind, believing “functionality is all that matters.”
- Money Is Just “One Line”: He admits that once wealth reaches a certain threshold (for him, after appearing on the Forbes cover in 2018), money becomes merely “a line”—it ceases to bring additional happiness.
- Present-Moment Satisfaction: Compared to the pressure of managing a trillion-dollar empire, CZ now deeply enjoys a life without daily 20-meeting marathons. He believes true success isn’t genius—it’s persistently doing what you love, combined with good luck.
From China to Canada
Chamath: CZ, welcome to the All-In Podcast. Let’s start at the beginning—I’m intrigued by your early years in Canada, which parallel mine in some ways. You worked at McDonald’s, while I worked at Burger King.But before that—your parents immigrated from China to Canada, right?
CZ:
My father actually went to Canada to study back in 1984. He was a professor in China and joined a University of Toronto exchange program. A few years later, he moved to Vancouver to attend the University of British Columbia (UBC). We applied for immigration around the same time, but getting passports was extremely difficult. We began applying in 1985 and took two or three years just to obtain passports—then another few years to get visas.
Afterward, issuing new passports became even harder. But we were lucky—we got our passports a year before the event occurred, and then visas became easier to obtain. So, in a sense, that event inadvertently helped us secure our visas.
Chamath: Once your family reunited, did both your parents work? What did they do?
CZ:
My father continued working as an assistant professor at university, receiving a monthly stipend of CAD $1,000. We lived in low-rent faculty housing provided by UBC, right on campus. I remember my mom started working at a garment factory making clothes just three days after we arrived in Canada. She’d been a math and history teacher in China, but due to poor English, she couldn’t land a teaching job and instead worked at minimum wage in the factory for seven to ten years.
My first job was at McDonald’s. I was either 14 or 15—I recall the minimum wage was CAD $6, but McDonald’s paid only CAD $4.50, below the legal floor. They appeared to have some special exemption allowing them to hire many young people. I applied for the job on my 14th birthday and started flipping burgers a week later—that was my first income.
CZ’s Ordinary Early Career
Chamath: You weren’t one of those prodigy tech kids—always coding and buried in computer science textbooks, right?
CZ:
I wouldn’t describe myself that way. I consider myself technically inclined. I studied computer science and was interested in programming in high school—I learned some basics. But I wasn’t a genius programmer—not exceptionally talented. I think I’m a solid coder and wrote decent code throughout my career. Still, by ages 28–30, I gradually stepped away from hands-on coding and shifted toward business development and sales—spending roughly eight years focused on those areas.
Chamath: So you were essentially an ordinary immigrant kid, trying to adapt to life in Canada. Did you have many friends?
CZ:
I had many friends—both Asian and non-Asian. At our school, most Asians socialized mostly with other Asians, but I was an exception—I had white friends and friends from other backgrounds. My teenage years in Canada were truly great—among the best of my life. Those years shaped me into an outgoing, happy person—I’ve always felt genuinely joyful.
Chamath: Was your university experience typical? How did you pay for tuition?
CZ:
I worked every summer and part-time during semesters—so I graduated debt-free. I never applied for student loans. In my first year, I borrowed about CAD $6,000 from my father. Money was still tight in my second year, so my sister lent me CAD $3,000. After that, I never asked anyone for money again—I supported myself entirely.
Chamath: So you graduated from McGill University with a degree in Computer Science?
CZ:
Actually, I didn’t graduate from McGill. I attended for four years but left in my third year after landing an internship—which kept getting extended until I never returned. Later, I discovered Japan required a bachelor’s degree for work visa applications, so I earned my degree via an online program called the “American College of Computer Science.”
Chamath: Which company did you intern with?
CZ:
I found an internship in Tokyo. Starting in my first year of university, I’d already been doing programming work. Initially, I wrote simulation software for a company called Original Sim. By my third year, I joined Fusion Systems Japan in Tokyo, developing order execution systems for brokers on the Tokyo Stock Exchange.
Chamath: What was going through your head at the time? Was it a bold adventure—you wanted to live in Tokyo for a summer?
CZ:
Yes—I was still a university student, and living in Tokyo felt like a dream. My first visit felt like stepping into the future. Mainly, I wrote order execution software—similar to what Binance uses today.
Chamath: When you first encountered that kind of software, did you instantly think, “Wow, I love this”? Or did you just understand the concept because it was part of your job—and then build it?
CZ:
At first, it was just my job—I was young and unfamiliar with different industries. When I first joined the company, they asked me to develop a digital imaging storage system—like an iPhone photo app, but for Nikon’s medical imaging systems. Soon after, though, I joined their flagship product team building the order execution system—the focus of my professional career. I loved this domain because it demanded high technical skill—all centered on efficiency: making systems as fast as possible, minimizing latency. This pursuit of efficiency fascinated me deeply, because I’m naturally obsessed with efficiency.
Chamath: With high-frequency trading firms, we see extreme optimization—designing custom circuit breakers, laying private fiber networks—to shave off mere milliseconds of latency. How does that demand manifest in software? When writing such code, how do you optimize those edge conditions?
CZ:
First, ensure your software is efficient and fast—e.g., eliminate all database queries and keep everything in memory. Then minimize extra computation steps and simplify pre-trade risk checks. More advanced optimizations involve FPGAs (field-programmable gate arrays)—network cards installed directly on NICs, eliminating the need to shuttle data between memory and CPU and back.
I was still coding then—about ten years ago—and that round-trip latency was ~100 microseconds. Avoiding that trip reduced latency to ~20 microseconds. Next, you upgrade physical infrastructure—like co-location within data centers—for further speed gains.
Chamath: In AI, we discovered a decade ago that GPUs are inefficient—data shuttling between GPU and HBM is wasteful—so we moved to SRAM, performing all operations on-chip. That’s extremely efficient for inference-stage decoding. Why haven’t HFT firms done something similar? FPGA is common—but why no ASICs? Or have they, and we just don’t know?
CZ:
I don’t believe ASICs have scaled broadly here. The main reason is algorithmic volatility—HFT strategies change too quickly. Hardware is efficient, but redesigning it is painfully slow. FPGAs represent a middle ground—even they take 10x longer to reprogram than software.
Chamath: Was the Japanese company you worked for successful?
CZ:
Very successful—it was acquired by a Nasdaq-listed company for $52 million before 2000. After acquisition, cultural clashes emerged between parent and subsidiary. It was my first exposure to M&A failures. Later, the founders launched a new firm—but it lasted only a year, burning cash with no revenue.
After that shutdown, I searched for new work. Bloomberg was hiring—I got an offer and relocated to New York. Post-9/11 NYC was quiet, but quickly regained energy. I worked at Bloomberg for four years doing similar work.
Founding My First Company in Shanghai
Chamath: Later, you quit and moved to China. How did that happen?
CZ:
In early 2005, friends I’d met in Japan discussed launching a new fintech startup. They were based across Asia and debated locations—Tokyo, Shanghai, Hong Kong—and concluded Shanghai might become Asia’s fintech hub. Looking back, we should’ve chosen Hong Kong—their fintech sector accelerated faster afterward. So in 2005, I moved to Shanghai with five others to launch an IT startup leveraging deep Wall Street trading tech expertise. Our idea was to import Wall Street-grade trading technology to serve Chinese brokerages and exchanges.
Upon arriving in Shanghai, they leased a lavish office—but I knew nothing about shareholder rights, preferred vs. common stock, etc.
I literally didn’t know the difference between preferred and common stock. I just thought, “Let’s go for it.” I was a junior partner. Once in China, since I spoke Mandarin, I handled client outreach. I approached brokerages—only to discover our company was registered as a Wholly Foreign-Owned Enterprise (WFOE), and Chinese brokerages couldn’t legally partner with WFOEs.
We learned this after incorporation—so we pivoted to offering generic IT system services—essentially outsourcing. We fixed printers, implemented SAP systems—anything to stay afloat.
We survived. Our clients included auto giants—SAIC-GM, SAIC-Volkswagen, FAW. After ~3–4 years, we opened offices in Hong Kong and partnered with Morgan Stanley, Deutsche Bank, and Credit Suisse. The company grew successfully—and still operates today. I left in 2013 after eight years—but the company remains active.
Chamath: How big did the company grow?
CZ:
At peak, ~200 employees—and as far as I know, it maintains that size today.
Chamath: As a junior partner, did you earn income via profit distributions?
CZ:
Yes—but we didn’t distribute much profit. I reinvested most savings back into the company—never withdrew a cent. After several years, the company stabilized enough to pay partners solid salaries—enough to send kids to international schools—annual compensation in the six-figure range.
Chamath: Were you married by then? How did you meet your ex-wife?
CZ:
I met her during my first Tokyo internship in 1999. She visited me there, and we married in New York—later having children. We’re now separated.
First Encounter with Bitcoin
Chamath: So what happened in 2013–2014?
CZ:
I encountered Bitcoin. A friend told me, “CZ, you need to check out this thing called Bitcoin.” I said, “What’s Bitcoin?” We chatted briefly.
I started engaging with it in July 2013. There was a forum called Bitcoin Talk—I gathered most info there. Bobby told me: “Invest 10% of your net worth in Bitcoin. Worst case, it goes to zero—you lose 10%. Best case, it 10x—you double your net worth.” That made sense—I dug deeper into Bitcoin, spending six months meticulously studying the whitepaper.
By end-2013, I was fully convinced and ready to act—but Bitcoin had surged from $70 mid-year to $1,000 by year-end. I felt I’d missed the boat—I wished I’d entered earlier. Truth is, no matter when you enter Bitcoin, you’ll always feel late—because everyone you meet bought earlier.
Chamath: Did you discuss Bitcoin with others while learning? Was there a Shanghai community?
CZ:
The Shanghai Bitcoin community was tiny. I talked to anyone willing—plus a few friends in Taiwan working at TSMC, attempting to design Bitcoin mining chips. They later left TSMC to launch a startup in this space—though it failed, I exchanged extensively with them.
Then the pivotal moment came in December 2013. There was a Bitcoin conference in Las Vegas—I flew there. A ~200-person gathering—but packed with industry pioneers: Vitalik, Matt Roszak, Charlie Lee, and many more—most still active today. Right before the event, Silk Road founder Ross Ulbricht had been arrested—media painted Bitcoin as drug lords’ tool. But at the conference, I found a room full of young geeks—friendly, welcoming. Vitalik, for example, was incredibly kind.
Chamath: Were you still working at your company then—studying Bitcoin on the side?
CZ:
Yes. Then I returned and told my partners, “We should build a Bitcoin payment system.” BitPay was the leader then—having just raised $4 million in 2013, a massive player.
Chamath: So you proposed, “Let’s build a BitPay clone”—and your partners replied, “What are you talking about?” And you hadn’t even bought Bitcoin yet, right?
CZ:
Correct—I probably owned just one Bitcoin. I told my partners: “Listen, this is the most important thing in my life.” I realized two foundational technologies mattered: the internet—but I was too young to capitalize then—and Bitcoin. At 35–36, I refused to miss it again—I sensed the next such breakthrough might take 15 years.
Chamath: Seeing those 22-year-olds in Vegas—did you feel you’d missed your chance?
CZ:
35–36 wasn’t too old—I didn’t feel ancient. But I believed the next comparable tech wave might take 10–15 years—possibly AI. Today, I’d say three foundational technologies define my life—but back then, Bitcoin was my sole obsession. So it was crystal clear: I had to act in this space.
I told my partners: “I’m quitting—I’m diving into Bitcoin.” We called it the “Bitcoin industry” then. I needed to buy Bitcoin—but had little cash, so I decided to sell my Shanghai apartment to fund it.
Going All-In on Crypto
Chamath: Where did you live after selling your apartment? Rented?
CZ:
Yes. I sold the apartment—my family moved to Tokyo, renting there—while I kept shuttling between Shanghai and elsewhere. That period also marked growing distance from my family due to frequent travel.
I sold the apartment for ~$900,000—nearly $1 million. I used that to buy Bitcoin. Since proceeds arrived in installments, I bought Bitcoin immediately upon each deposit. First purchase: $800/BTC—then prices fell to $600, $400. My average entry was ~$600.
While buying Bitcoin, I job-hunted—exclusively in Bitcoin roles, very targeted. Landing one didn’t take long—just 2–3 weeks from resignation to offer.
Chamath: Who ultimately hired you?
CZ:
I first spoke with BTCC’s Bobby—he wanted to hire me. Then Blockchain.info emerged. I met Roger Ver. Blockchain.info had just launched—founded by Ben Reeves, who’d recently hired Nicholas Cary as CEO. I was the third team member—VP of Engineering—since we reserved CTO for Ben.
But things soured. We scaled to 18 people—then Peter Smith joined as CFO, pushing for fundraising. Coinbase had just raised $30 million—a huge industry headline. Company culture shifted—I felt alienated and left. Some developers I’d recruited followed suit. I stayed ~6–7 months—no major wins, but learned immensely.
When I joined, Ben Reeves told me: “We have no physical company, no office—everyone works remotely, and we pay salaries in Bitcoin.” That was revolutionary to me—and a key lesson I carried into Binance, where it’s still widely practiced. I also learned marketing—Blockchain.info was the industry’s largest user platform, and their entire marketing strategy was one post on Bitcointalk.org—Ben Reeves grew it to 2 million users by relentlessly replying to that single thread.
I realized guerrilla marketing could succeed. So yes—I learned much. But cultural shifts made it untenable—I left. Then He Yi recruited me to OKCoin. She said: “Why work for a wallet company? Your expertise is order execution and exchanges.” So she made me CTO.
OKCoin offered 5% equity—BTC China offered 10%. OKCoin matched in three hours. He Yi owned 1% at OKCoin—she invited me to become a larger partner.
So I joined OKCoin—stayed ~8 months. But culture clashed again—I disliked their promotion tactics. E.g., they advertised fee discounts, but users had to manually apply—discounts weren’t automatic. Small details like that felt off. So in early 2015, I left.
Chamath: How did Binance begin after that?
CZ:
In 2015, several former colleagues and I decided to launch a Bitcoin exchange in Tokyo—Mt. Gox had collapsed a year prior, leaving a vacuum. On the day I resigned from OKCoin, two developers approached me—we founded a company, I became CEO with larger equity and fundraising responsibility. I paid their salaries from my savings—I took no salary myself.
We quickly built a demo exchange—downloading open-source software and lightly optimizing the UI for appeal. I was transparent: “We built this in two days—a proof-of-concept prototype, not final product.”
We scripted market data pulls from Bitfinex—simply copying their order book to appear active. The demo looked vivid. Investors said, “Wow, great tech!” But it wasn’t just smoke and mirrors—when asked technical questions, I gave deep answers: memory matching, database optimization, etc.
They suggested: “Why not sell this tech to other exchanges? Most Japanese exchanges have terrible tech.” Made sense—I reached out. Within ~2 weeks, we signed a contract with one exchange—they paid $360,000 for our system, with $180,000 upfront—enough to cover payroll. I was thrilled. So we pivoted from operating our own exchange to becoming an exchange-system provider.
Most romanticize startups—imagining Facebook-like dorm-room projects exploding to millions of users overnight. But companies like Binance or Tesla succeeded through grueling, incremental effort—not obvious brilliance from Day One. Facebook, Microsoft, Google are rare exceptions—successful immediately. Their outlier stories warp startup perceptions. Truth is, 99.9% of successful companies aren’t like that—if you examine any thriving company today, it’s built on relentless iteration.
The Birth of Binance
Chamath: Take us back to Binance’s founding moment.
CZ:
We were licensing exchange software—business was solid. We served ~30 exchange clients for years—running a SaaS model: “Exchange-as-a-Service”—charging fixed monthly fees. Stable, predictable revenue.
Each new client lifted revenue a notch—great model. But in March 2017, Chinese regulators shuttered most of our clients. We were just software vendors—didn’t operate exchanges directly—but our clients vanished, so our business evaporated. April–May, we debated pivots. By end-May, three team members proposed mimicking Poloniex—one of the top exchanges. Three days later, they suggested a blockchain-based chat-trading app. I countered: “Why not launch our own exchange? We already have the trading system—just tweak it for crypto-to-crypto only.” So in May, we decided to relaunch our own exchange—team agreed.
But we had 20 people—mostly engineers, no dedicated marketing team. So we decided to self-operate a crypto-to-crypto exchange. Initially planned VC funding—but after Link’s ICO succeeded, I changed course. Everyone was buzzing about ICOs—I attended a conference mid-June 2017—“CZ, you must do an ICO!” On June 14, I told the team: “We’re doing an ICO—write a whitepaper ASAP.”
At Blockchain.info, many knew me—then the most popular platform. At OKCoin, I was CTO—active on social media. I handled international markets—no one else spoke English better—so I had community visibility.
To launch an ICO, you need credibility—especially early in the industry. Attend a few conferences—first with 200 people, second they recognize you, third they view you as an expert. So I had community reputation.
Chamath: Who bought Binance’s ICO tokens?
CZ:
Honestly, even today, I’m not fully sure. Demographically, ~80–90% were Chinese—remainder international investors. Data shows ~20,000 participants—Binance was brand-new—only a few knew me via industry ties.
Chamath: Even with Chinese exchanges banned, ICOs were still permitted?
CZ:
ICO rules weren’t explicit—neither clearly allowed nor banned. Clarification: Our clients were mainly fiat exchanges—not crypto exchanges. Crypto exchanges weren’t banned in March 2017—they were outlawed in September, after we launched Binance.
Chamath: What % of the company did you sell?
CZ:
We sold no equity—we issued tokens only. We launched BNB—still circulating. We sold 60% of tokens targeting ~$15 million—denominated in Bitcoin.
BNB’s initial economic model prioritized: 50% fee discount for BNB holders on Binance trades—planned for launch. Also mentioned: BNB’s own blockchain, decentralized ecosystem, plus 3–4 other features.
Chamath: You must’ve been thrilled—$15 million raised, time to launch! But in September, regulators banned exchanges. What next?
CZ:
Yes—on September 4, seven Chinese government agencies jointly announced: (1) crypto exchanges banned, (2) ICOs banned, (3) mining banned. We decided to relocate—China was ~30% of our users, but 70% were global—so losing 30% felt survivable—“Let’s move—to Tokyo.”
Chamath: When Binance launched—was it an instant hit? Or did you grind to find product-market fit and attract early evangelists? How did virality start? How did liquidity build?
CZ:
Binance’s product grew decently initially—but token price dropped post-ICO—fell 30–40%, took ~3 weeks to recover. With crypto markets hot, product-market fit existed—it wasn’t novel—just a crypto-to-crypto focused exchange.
Chamath:
So the ICO was pivotal—users thought, “I hold this token, get fee discounts”—that drove adoption. But was Binance’s architecture also superior—faster, more stable?
CZ:
Absolutely. Post-launch, users noticed instantly—orders executed far faster on Binance than competitors. System performance was visibly superior.
Largest platforms then: Poloniex, Bittrex, Chinese exchanges like Huobi and OKX. Western: Coinbase, Bitstamp.
Chamath: How did you process this success? Did you think, “Is this real? Is this happening?”
CZ:
Some moments felt surreal—but in a good way. Once, I asked our finance lead: “How much revenue?” She said: “Hundreds of Bitcoin.” I replied: “That’s insane—we can’t possibly earn that… are you sure?” She confirmed—truly unbelievable.
Another fun moment: Three weeks post-launch, BNB price recovered. ICO price: $0.10—dropped to $0.06. Then He Yi joined Binance—we announced it. Next 2–3 weeks—every time I woke up, token price rose 20%. Returned from meetings—+20%. Came back from bathroom—+20%.
Chamath: You must’ve quickly realized, “Wait—I’m rich.”
CZ:
Realization came slightly later—early 2018, ~6–7 months post-launch. Forbes put me on the cover—then it truly hit.
Chamath: CZ, what is money to you? Does it matter? Don’t misunderstand—I mean, you became wealthy in your 40s. At that age, does money still matter?
CZ:
Money matters—but it’s not everything. I was mature enough to view it differently. First, I’m in my 40s—not 20s—I won’t buy Lamborghinis or throw lavish parties. I’m past that phase. My temperament is steady—I don’t get overly excited. Also, I wasn’t seeking attention—I went from newly financially free to Forbes cover overnight.
I checked my wallet—nothing changed. Even on the Forbes cover, my life was unchanged. Later, people told me: “You’re likely a billionaire now.” I thought: “Really? Am I? Doesn’t feel like it.”
Like moving from China to Japan—I booked an economy red-eye flight. He Yi suggested: “Maybe upgrade to business class—more rest.” Seemed wise—we upgraded—and kept that habit.
When you gradually earn more—e.g., $1M → $10M, maybe buy a luxury car; $10M → $100M, maybe a yacht. But jumping straight to Forbes cover skips gradual accumulation—so no ingrained spending habits.
Chamath: Now—given market swings—you’re likely a billion- or even ten-billion-dollar net worth. What does it all mean?
CZ:
Not much. Money serves two purposes: (1) covering basic needs—food, shelter—requiring little. I don’t live lavishly—but comfortably. E.g., my house leaks monthly in the living room—old, but fits perfectly—meets my needs. Many assume I live in a mansion—but it’s a modest, functional home—three- or four-hand, well-located, practical.
I prioritize function—if it works, I’m satisfied. I don’t care about flashiness, style, color, or gold plating. If it solves the problem, it’s fine.
Chamath: CZ, do you ever feel uneasy? Insecure?
CZ:
Rarely—I know my weaknesses and how to manage them. So I hope I’m not arrogant—I don’t think I am. I’m calm—others’ emotions swing wildly; mine fluctuate mildly—more stable.
No one wants to hear how hard you work—they want simple judgments: “Wow, look at all you own.” But if you’re constantly busy, you never enjoy it—others can’t grasp your effort.
Chamath: Did you ever get addicted to growth?
CZ:
I wouldn’t call it growth addiction—but I am addicted to work itself—it’s deeply satisfying and fulfilling.
Typically 20+ meetings daily—scheduled calls, face-to-face, ad-hocs. Plus Twitter replies, etc.
Work satisfaction is hard to articulate—it’s not money or growth. Most important is Daily Active Users (DAU)—not volume, not revenue. As long as I serve more users daily, I create value. A product’s value lies in whether people choose to use it. If demand grows—even with zero revenue—it’s valuable.
This remains my philosophy. Yes, optimize short-term revenue/profit—but that may sacrifice long-term growth. I believe long-term value emerges if millions use your platform—you create value for users and yourself. People choose your platform because it delivers value—that’s my core goal.
Relatedly, knowing hundreds of millions use our platform feels meaningful—I’m helping them. My view: If users pay fees, we must deliver greater value.
Chamath: DAU is vital—but a double-edged sword, given potential bad actors. When did you first realize this was a serious issue requiring action? Was there a meeting where someone said, “CZ, I have good and bad news”? What was that like?
CZ:
Yes—I remember clearly. Around New Year’s 2018—Binance was ~5–6 months old but already the world’s largest exchange. On New Year’s Eve 2017—Dec 31—a U.S. Homeland Security official contacted me. Email requested help tracking hacker funds—likely stolen in EtherDelta’s 2017 hack. EtherDelta was a decentralized exchange later shut down.
Receiving that email, I had no idea how to respond—our team lacked law enforcement experience. I convened a small group to discuss assisting. First, verified his identity—confirmed he was legit. Then shared requested data—he thanked us.
I asked: “Can you recommend someone experienced with law enforcement?” He did—but that person was U.S.-based—we had no U.S. entity, couldn’t hire him—case stalled. But that day was a turning point—I realized we needed someone with law enforcement collaboration experience. We eventually hired more such experts.
I’m legally constrained discussing plea details—I’m not a lawyer, so I’ll avoid those topics. Broadly, I’d say the Biden administration was openly hostile to crypto—even declared war on it.
Seeing the new administration pivot 180 degrees feels positive—for the U.S. and globally. I won’t blame the prior administration—but perhaps they lacked crypto understanding.
Chamath: Why such hostility?
CZ:
Mainly fear of the new. Likely, they envisioned preserving existing finance—and industry lobbying influenced their mindset, fostering bias—human nature.
The FTX Story: Relationship with SBF and Collapse
Chamath: Later, you saw others rise—SBF and FTX exploded. Tell me—how did you meet him? You held significant equity.
CZ:
Yes—we invested in FTX—20% equity—for one year before exiting. First met SBF in Jan 2019 at a Binance Singapore conference—I recall FTX wasn’t launched yet—SBF ran Alameda. They threw a party at Sentosa’s aquarium—with divers holding “Alameda” signs. They were Binance VIPs and large traders—so we treated them warmly.
That was my first encounter. Months later, they approached us proposing a futures platform partnership—like a JV—60/40 split favoring us. I considered countering—we had all users, they had none—so we declined.
Chamath: Were they a key part of your liquidity pool?
CZ:
Not especially. Large traders—but Binance was nascent. They traded on us briefly—6–12 months.
Later, summer—they returned with better terms—we declined again. By November, they offered an attractive deal—FTX launched, gaining volume. They offered 20% equity at favorable terms—token swap: BNB for FTT—we received initial FTT tokens. BNB was more liquid; FTT less so—we closed the deal.
Almost immediately post-deal, friends told me SBF was slandering us in D.C. circles. I felt helpless. They also did distasteful things—e.g., luring away our VIP account managers with 5x salaries—those managers held our VIP database. Within days of joining them, our VIPs got calls: “Better rates at FTX.” I called SBF: “Please stop—we’re shareholders.” He agreed—then invited me to co-host a crypto event interview. I accepted—as an investor, I wanted to promote FTX. I hoped multiple successful exchanges would dilute scrutiny on Binance—but kept hearing backbiting and unfriendly acts.
~1 year later—early 2021—they claimed raising funds at $32B valuation. Per our investment terms, we held veto rights on follow-on rounds. We could’ve blocked them—but chose not to hinder their growth. So we exited—fair competition. Deal finalized—July 2021, if memory serves.
Chamath: That was a full 18 months before their collapse—rumors claim problems began post-exit, linked to our departure.
CZ:
False. Due to competitive dynamics—even as shareholders, I never requested FTX’s financial statements. I’m a passive investor—don’t interfere in operations. We also competed—e.g., both had futures platforms—so I kept distance, let them operate independently.
Chamath: On FTX’s collapse—two points dominate discussion: (1) Compensation methods disappointed some users—especially those holding deposits. (2) Some investments became worthless post-collapse. Your thoughts? Lessons for the industry?
CZ:
I’ve seen varied claims online. For transparency: We’re currently in litigation with FTX’s estate. They seek to claw back funds from our 18-month-ago exit—so I’ll tread carefully. But I’ve heard complaints—e.g., some Chinese users ineligible for compensation. Per my reading, crypto price surges mean dollar-denominated funds are sufficient today—though users holding crypto then might’ve fared better.
Facing Biden Administration’s Anti-Crypto Policy & DOJ Investigation
Chamath: When did Binance’s situation start feeling complex?
CZ:
Complexity began when they requested information—we complied fully. ~2021–2022. By end-2022, tone turned adversarial. Early 2023, stance hardened: “Either settle—or we sue.” Negotiations commenced.
Chamath: How did you respond? Did you think, “I can’t believe this is real”? E.g., lawyers saying, “CZ, prosecution seems likely”—what were those meetings like?
CZ:
First, I lack legal training—I rely on advisors. This was toughest—I had zero experience. No one does—those who’ve endured it don’t want repeats. As the investigated party, virtually no one has experience.
We hired top lawyers—but coordinating them was complex. Lawyers came from diverse specialties—each had strong opinions. All wanted to appear smartest/most vital. More time spent = higher fees. Not claiming unprofessionalism—just that they aimed for excellence. Problem: Conflicting directions dragged us into convoluted debates.
This was most troublesome. Direct guidance—“Focus here”—would’ve simplified things. But our legal team was young—lacked experience handling such complexity—making it worse.
Our team was globally dispersed—I was mostly in Dubai/Abu Dhabi in 2023—immense pressure. My stress-management method: Analyze best/worst cases. Asked team: “Best case?” E.g., “Pay fine, sign DPA, done.” Worst case: “Prison.”
Chamath: But was prison truly worst? Seemed like probation might be worst-case.
CZ:
True. No precedent for prison for such cases—but they could demand it. Worse: If no settlement, fight it. I might stay in UAE—no extradition treaty. Now a UAE citizen—near-impossible extradition—but travel severely restricted. Even in non-extradition countries, risks exist—countries may negotiate ad hoc deals—life full of uncertainty/fear.
This creates trouble—and immense pressure on UAE government—I didn’t want to burden those granting me citizenship. I didn’t want to be a troublemaker. Worst-case: Prosecution + Interpol Red Notice—possible.
Chamath: How was it resolved?
CZ:
Negotiations dragged—daily calls with 12–20 lawyers for over a year. Back-and-forth with Biden DOJ for over a year. Lawyers’ most repeated line: “We’ve never seen them this hostile on a case.” Nearly became a mantra.
Chamath: Did you grow numb? Or dwell on “Why me?”—feel resentment—or cope differently?
CZ:
Gradual process—some phases brutal. Key negotiation moments—had to say “no”—e.g., unacceptable terms, no flexibility.
Then weeks passed—no clue what came next—pure hell. Prosecution hung on their whim—after refusing terms. During those weeks, I mentally prepared: “I may be confined to one country—live cautiously. Maybe an unannounced arrest warrant awaits at a border checkpoint.”
Interestingly, after two weeks, they resumed talks. Looking back, this was sophisticated negotiation strategy. For me—or anyone in this position—silence/delay is psychological warfare.
For the investigated, this happens once—no experience. For them, it’s routine. It’s your life—sealed Red Notices could last decades.
They’re experts—know exactly how to pressure psychologically. I believe they knew two weeks is optimal—if longer, you’d adapt. So they don’t let you linger. Expert-level mastery.
Chamath: What finally led you to agree to the settlement?
CZ:
After multiple rounds, we settled on admitting violation of one Banking Secrecy Act provision—failure to register as required. A federal crime—serious—but historically, no one jailed for this violation alone.
Chamath: Sorry—this sounds technical. How does it relate to media narratives—money laundering, aiding crime, missing KYC/AML? Is media perception aligned—or vastly off?
CZ:
I’ll try explaining—but disclaim: I’m not a lawyer—this is personal interpretation—may contain inaccuracies.
Core charge: Violation of Banking Secrecy Act—specifically, failure to register. Simply put—we served U.S. users without registering as a financial services firm in the U.S. This was our oversight—but unrelated to users’ illegal activity. Core issue: We didn’t register with U.S. authorities to prove eligibility serving U.S. customers.
Additionally, charges regarding KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures. They deemed our KYC/AML inadequate. Many think KYC/AML is binary—but it’s nuanced—depth depends on systems, processes, staffing, etc.
More severe: Allegations we “knowingly facilitated illicit transactions.” E.g., weak AML missed bad actors—but distinct from knowingly enabling illegal trades. Highest-tier: Personal involvement in illegal trades—e.g., Charlie Shrem aiding Silk Road’s Ross. I never personally executed trades—never my role—never would.
Ultimately, charges against Binance focused on two points: (1) Failure to register; (2) Inadequate KYC/AML. Typically resolvable via fines. Historically, no U.S. jail time for these standalone charges.
Yet government added two “enhancement” charges—#3 and #4—alleging personal facilitation of illicit activity. No concrete evidence—attempted to indirectly implicate me via company actions.
Chamath: Could they cite specific transactions or anything?
CZ:
No—no specific evidence—so enhancements were dismissed outright by court. Pre-U.S. arrival, we agreed to defend these in court. Per my research, no precedent for jail time on similar charges.
Most severe prior penalty: BitMEX co-founder Arthur Hayes—six months home confinement for compliance issues. Studying his case, he interacted more directly with customers—whereas at Binance, I had minimal direct customer contact. Mostly Twitter engagement—not backend operations. So our position seemed stronger—I believed our solution was optimal.
Chamath: So you accepted charges—and planned to contest enhancements #3/#4 in court. Then came to U.S., entered court process. What next?
CZ:
Yes—complex procedural details. First day: Guilty plea in court—plea agreement revised repeatedly by lawyers. Second morning: Formal proceedings began.
First step: Guilty plea. Judge asked line-by-line: “Do you understand this clause? This one? This one?” I answered “yes, yes, yes.” Content had been vetted exhaustively—over-legalized. Dispute wasn’t charges—but bail conditions.
My lawyers argued I should return to UAE pending sentencing in 3 months. Government feared I’d skip—wanted me detained in U.S. Yet conceded I posed no societal threat—no movement restrictions in U.S. Intense debate ensued.
Initially, magistrate judge ruled I could leave U.S. for UAE—ideal outcome. Government appealed. My lawyer said: “In 40 years, I’ve never seen bail appeals—they’ll anger the court—might help you.”
Two weeks later, court sided with government—I had to stay in U.S., couldn’t return to UAE.
So I left family—stayed in U.S. 3 months. Free to move—but felt trapped, unable to go home. Luckily, my sister owned a U.S. home—I stayed there. Later traveled to calm down.
Three months later, government requested extension—another 3 months.
Chamath: Did your kids visit?
CZ:
No—I didn’t invite them. Didn’t see them all year. Government requested another 3-month extension. Final court date set for April 30, 2024—final filings due one week prior.
Shocking: Government’s filing requested 36-month sentence—double sentencing guidelines’ upper limit. Court stated they’d never seen government ask court to ignore guidelines. Unexpected.
I learned this a week pre-sentencing—filings submitted in advance. Hearing it crushed me. Worse: My lawyers’ tone shifted. Previously, they’d said I’d likely go home—now: “Judge may pick middle ground between gov’s 36 months and our probation request.”
Even more shocking: Five days pre-sentencing—April 25—Senator Elizabeth Warren publicly declared war on crypto on TV. Her sentencing-day timing intensified tension. She sent DOJ an open letter citing me—much inaccurate. Heightened anxiety.
Finally, April 30—sentencing day. Judge praised me extensively—quotes later in my book. As I relaxed—judge said: “But…”—heart sank—bad omen.
That day, lawyers debated sentencing. Fortunately, court dismissed enhancements #3/#4. My lawyers argued I never handled trades or knew details—court rejected #3/#4 outright.
Final sentence: Four months.
Life in Federal Prison
Chamath: How did you cope?
CZ:
Initially brutal—not just four months—but “Will I be safe?” If told: “Stay four months—guaranteed safety”—I’d accept. Most unsettling: the unknown and uncertainty.
Especially post-sentencing—mainstream media loudly reported I might be the richest person ever jailed in the U.S. My lawyers/prison consultants panicked—warned I’d likely be an extortion target in prison. They stressed safety risks. I kept asking: “What do I do? Enter with nothing—how protect myself?”
To prepare, I consulted professionals—prison consultants: former guards, wardens, or ex-inmates. They advise newcomers—how to interact, protect themselves, avoid conflict.
They warned: High-profile cases attract extortion targets. Advice: Don’t make friends in prison—especially Day One. If someone’s overly friendly, don’t accept anything—they’ll demand 10x repayment. Refuse or can’t pay—and they may assault you.
Advice helped prepare—but ultimately, you face it head-on. I learned in U.S. prisons: ~2 million incarcerated. Gov’t spends more annually on prisons than education—shows scale.
Also, 50 states—each with own prison systems—state/federal prisons. Each prison is a small city. Mine housed 2,200 inmates—truly a city—with unique rules. Pre-prison advice often proved irrelevant.
Chamath: You were sentenced April 30—when did incarceration begin?
CZ:
Sentencing doesn’t mean immediate imprisonment—you learn your facility later. Court recommends two options—then you receive a letter with reporting date. In my case, judge ruled no supervision needed—rare—so no handcuffs, no detention. Just wait for letter at my sister’s address—registered in court.
DOJ actually demanded immediate handcuffing. I suspect they wanted a “capture photo” for PR. Judge refused: “He’s not dangerous or a flight risk—I won’t do it.” Judge added explicitly: no supervision needed. Later learned this was a rare legal provision—why post-incarceration, no probation/parole/supervision required.
Chamath: How was this period? Anything awful happen?
CZ:
Luckily, nothing particularly awful occurred—but the experience itself was awful. No physical harm, no fights, no extortion.
Pre-prison, consultants advised: Avoid gangs, stay independent, low profile. Yet, walking in—a guard said: “You might need protection. Heard Pacific Islanders recruiting—you might join them.” First words—terrifying.
Day One: Busy intake—strip searches. Mentioned on CNBC—they thoroughly searched me—assigned to unit. Unit housed ~200 inmates—20 cells/row × 3 rows—public area on ground floor.
First cell entry—everyone stared—many muscular—very tense. Prisons organize by race—assigning based on ethnicity. Chinese? Grouped with Chinese. White? With whites. Black? With blacks. Mexicans/Spanish? Together. This reduces conflict—easier to relate culturally. Staff even encourage racial grouping—lowers fighting probability.
Once grouped—if issues with other groups, reps mediate. Each group has a rep—like union reps—meet to resolve issues. Prisons have their own rule systems—I knew none of this.
Day One—someone looking mixed-Asian approached: “Welcome to our group.” I thought: “Shake hands? Don’t? Did I join a gang?” Later learned he was Filipino-German. Few Asians in prison—so all Asian-looking people grouped together—including Indigenous/Pacific Islanders like Hawaiians. In our 200-person prison—our group totaled six.
I should’ve gone to Minimum-Security Prison—economic offenders. But as non-U.S. citizen, they placed me in Low-Security Prison—mostly drug offenders—unique experience.
Chamath: What was your first act post-release?
CZ:
First—shower, then delicious meal. Prison showers were tiny—box-like—doors like saloon doors—head/legs exposed—extremely cramped.
So, first post-prison shower in a spacious stall—no wall bumps—felt luxuriously indulgent.
Food: Fruit scarce—quality protein nonexistent. Post-release, seeing a fruit-laden table—thought: “Heaven—haven’t seen this in months.”
Chamath: Did you fly straight back to UAE?
CZ:
Yes, from prison gate to plane departure—26 minutes.
Chamath:
What ran through your mind? Did you think, “I get their perspective—at least some charges make sense.” Or feel unjustly persecuted?
CZ:
Legal constraints limit discussion of plea details—but emotionally—I just wanted it over.
Remember—I’d just left prison—Biden still in office—election uncertain—policy direction unclear. My thought: If policy continued, U.S. would remain anti-crypto. We’d adapt and survive.
Chamath: Back in UAE—did you accept you couldn’t manage Binance? That was part of the plea, right?
CZ:
I accepted—resigning from Binance management was agonizing—I cried. Complex feelings: Deep love for Binance—my creation, poured heart into it—but knew it was unavoidable.
If I’d resigned voluntarily, people might say: “He cracked.” But legal restriction—not choice—removed blame. So I reconciled: Many other meaningful pursuits await.
Chamath: What’s the pardon process? What did you do? What does pardon mean?
CZ:
Pardon lacks clear process—few truly understand mechanics. From what I learned: Hire a lawyer to draft petition—detail why you deserve
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