Sam Bankman-Fried and Binance’s Changpeng Zhao spoke out on dedicating their life’s work to crypto in an interview. Here are their best quotes.

Screenshot 2021 06 04 at 12.57.45
Sam Bankman-Fried, founder and CEO of crypto exchange FTX.

  • The CEOs of two of the world’s top were both recently interviewed by the New York Times on everything from their personal histories to risk and regulation.
  • FTX’s Sam Bankman-Fried spoke on excessive leverage, his company moving out of Hong Kong, and why FTX has a US-only branch.
  • Binance’s Changpeng Zhao discussed overactive crypto markets, risk, and his “abundance mindset.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Sam Bankman-Fried and Changpeng Zhao have had a whirlwind few years. The two crypto exchange founders – running FTX and Binance, respectively – have come up during a once-in-a-generation investment surge into crypto. And their exchanges have been right in the center of it all.

Bankman-Fried and Zhao were both recently interviewed by the New York Times on everything from their personal histories to risk and regulation.

Here are the eight best quotes from the interviews, lightly edited and condensed for clarity:

Sam Bankman-Fried on…

    1. How crypto exchanges differ from traditional ones: “In crypto, exchanges handle basically the entire infrastructure. It’s every single part of a trade put together except for the buyer and seller, whereas in traditional finance, it’s all handled by like 12 different firms.”
    2. How to deal with excessive leverage: “It’s a bit of a double-edged sword. So there are some exceptions to this, but with most of the exchanges, a general consensus is maybe we should just get rid of 100 and 50 and anything above 10X. We would get consumer outcry if we got rid of it, and we’d get very bad press. But it might be the right thing to do.”
    3. Whether FTX is considering moving out of Hong Kong: “We’ve looked into it. The Monetary Authority of Singapore has been one of the most on-the-ball regulators in terms of trying to actually build out a regulatory and licensing framework. That being said, like almost every jurisdiction, Singapore has not ruled out a comprehensive regulatory framework for crypto yet.”
    4. Why FTX has a separate branch just for Americans: “As we started expanding into more and more demographics, one of those is retail traders, and there are huge amounts of retail influence occurring in the United States. And the other piece is the institution. A lot of US institutions, historically, they’ve not traded any crypto, but that’s starting to change. They all now have mandates for trading crypto somehow sometime.”

Changpeng Zhao on…

    1. How he took the dive into crypto: “In December 2013, I went to a conference in Las Vegas and bumped into Vitalik Buterin, one of the founders of Ethereum. … There was one other guy that was quite influential. I was learning Ripple. He came over with a laptop to show me how it works, and in the process, he transferred [$500 of Ripple’s token] XRP to me and said, ‘You can use that to teach the next guy.’

      “So I was like: ‘Well, this is a pretty generous group of people. They’re really not after the money. They’re really just wanting to teach.’ Shortly after that, I quit my job, sold my house.”

    2. Whether he worries about overactive crypto markets: “We have an open democratic market, and the market will self-correct. Too many people are rushing in. The prices will go too high. And then some guys will want to cash out, to take profit. But nobody really knows. So maybe the price is still too low now. So the market takes care of that.”
    3. How he thinks about risk: “The word risk means different things to different people. Some people say risk. Some people say opportunity.”
    4. How he views his competitors: “I never view anyone as competition. If I’ve got that mindset, everyone’s the enemy to me, even very different businesses. But I have an abundance mentality. I think most things in this world are not limited resources. Money is not. Business opportunities are not. And the crypto industry is not.”
Read the original article on Business Insider

Crypto exchange Binance plans to double the size of its global compliance team as regulators turn up the heat

CZ 5 (2)
Binance CEO, Changpeng Zhao.

  • Binance plans to give its global compliance team a two-fold boost by the end of 2021.
  • “We plan to double our team size by the end of the year,” CEO Changpeng Zhao said on Tuesday.
  • Legal pressure has begun mounting on Binance, making it unable to operate smoothly in some regions around the world.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Binance plans to double the size of its global compliance team by the end of 2021 as the industry faces “a lot of uncertainty,” CEO Changpeng Zhao said in an open letter on Tuesday.

Zhao said the company’s international compliance team and advisory board has already grown by 500% since last year.

Former Financial Action Task Force executive secretary Rick McDonell, former head of the Canadian delegation to the FATF Josée Nadeau, and former US Ambassador to China Max Baucus are among the high-profile appointments on the team.

“We plan to double our team size by the end of the year, with qualified and experienced advisors to support,” Zhao said in his letter.

Binance has been under fire over a series of regulatory threats. Pressure first began mounting from Ontario, Canada, where a regulator alleged that the company failed to comply with securities laws.

Then the UK’s Financial Conduct Authority banned Binance’s local subsidiary, ordering it to stop all regulated activity in the country. The Cayman Islands too, where Binance was incorporated in 2017, said the exchange isn’t authorized to operate crypto trading in the nation. Officials in Thailand also filed a criminal complaint against the exchange last week for operating without a license.

Soon after, UK bank Barclays blocked customers from making card payments to Binance, saying this was done to help keep customers’ money safe.

In an email to users on Tuesday, Binance said it would suspend euro bank deposits from a key European payment network (the Single Euro Payments Area) due to “events beyond our control.” It described the suspension as temporary, according to the Financial Times.

In his letter, CEO Zhao compared crypto adoption to the invention of the car industry to explain that laws and guidelines for road traffic took a while to develop.

“Crypto is similar in the sense that it can be accessible for everyone, but frameworks are required to prevent misuse and bad actors,” he said.

“Binance has grown very quickly and we haven’t always got everything exactly right, but we are learning and improving every day.”

A fresh wave of regulatory clampdowns has set off panic investor behavior and willingness to sell at a loss, bringing cryptocurrency prices down from their peaks earlier this year. Bitcoin was last trading at $34,824 on Wednesday, down around 0.2% on the day. It’s still up 21% so far this year, but has lost 45% since hitting a record in April. Ripple’s XRP fell 1% to 67 cents on Wednesday, while litecoin fell 0.4% to $141.60.

Read More: Goldman Sachs names 30 stocks to buy for double-digit revenue growth in 2022 – and 4 sectors expected to beat the S&P 500’s sales growth

Read the original article on Business Insider

Elon Musk wants to be funny with his tweets, but he should realize his power to move markets and hurt investors, Binance CEO says

Tesla CEO Elon Musk and Binance CEO Changpeng Zhao
Tesla CEO Elon Musk and Binance founder Changpeng Zhao.

Elon Musk should be more careful about his tweets on cryptocurrencies, even though individuals are free to voice their opinions openly, Binance CEO Changpeng Zhao said in a Bloomberg interview on Wednesday.

“In a few countries in the world, there’s freedom of speech and Elon lives in one of those countries, so he is, to a large extent free, to say what he wants to say,” he said.

“I think Elon Musk wants to be a humorous guy… but he has to realize that his tweets do have the power to move markets,” Zhao said, adding investors could get hurt by some of the wild swings in cryptocurrency prices.

The Tesla boss has managed to create quite a stir within the crypto market, as substantial price movements post his tweets continue to show just how nascent the asset class is. Tesla’s $1.5 billion bitcoin bet and acceptance of it as payment boosted the digital asset by 16% back in February. Bitcoin ultimately hit a record above $63,000 in April.

But Musk’s decision to suspend bitcoin payments led to a broad crypto-sell off last month as concerns around its mining process kicked off a debate on its environmental impact. The volatility hasn’t been limited to bitcoin.

Dogecoin, one of the least stable cryptos on the market, has also been impacted by Musk’s positive tweets about the meme-based token. Since many people associate dogecoin with Musk, new retail investors tend to base their decisions on his tweets. Galaxy Digital has published a chart that shows how dogecoin has reacted to Musk’s tweets.

Because bitcoin is the dominant token in terms of the size of the market, the other cryptocurrencies tend to follow whatever it does.

Zhao said the crypto community must learn to properly respond to the tweets, and suggested Musk should be a bit more careful. “But it’s his freedom. It’s not me against him,” he said. “I wouldn’t recommend doing that but, you know, it’s his freedom.”

Billionaire Mike Novogratz also recently said Musk’s often-eclectic tweets aren’t good or helpful for cryptocurrencies.

Read More: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down the red-hot crypto corner of yield farming – and shares 4 of his favorite DeFi tokens

Read the original article on Business Insider