CZ's Untold Story: The Rise, Fall, and Redemption of Binance's Founder

(0:00) From China to Canada (6:13) CZ's Early Career: Shockingly Normal (17:39) First Company in Shanghai (23:08) Discovering Bitcoin (30:11) Going All-In on Crypto (41:27) Founding Binance (1:03:57) The FTX Story: SBF Relationship and Collapse (1:09:46) Facing Biden's Anti-Crypto DOJ (1:25:25) Inside Federal Prison (1:40:10) Life After Binance and New Ventures Follow CZ: https://x.com/cz_binance Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Chamath Palihapitiya?

  CZ, welcome to the All In Podcast.

• 0:01Speaker 01

  Well, thanks for having me here.

• 0:03Chamath Palihapitiya?

  It's really, really great to see you.

• 0:04Speaker 01

  It's a pleasure, huh?

• 0:05Chamath Palihapitiya?

  I want to go all the way back to the beginning because I think a lot of people don't really know your background the way that they probably should. The part of the background that I really care about is there's parts of your early journey in Canada, which is very similar to mine. You worked at McDonald's, I worked at Burger King.

• 0:20Speaker 01

  Okay.

• 0:21Chamath Palihapitiya?

  But before that, your parents were able to immigrate from China right around Tiananmen Square, right?

• 0:27Speaker 01

  My father went to Canada to study in 1984. That's five years before Tiananmen Square.

• 0:33Chamath Palihapitiya?

  How did that come about? So your father stayed in Canada once he went there or no?

• 0:37Speaker 01

  He could visit us every, twice a year, basically, but he was, most of the time he was in Canada. And yeah, so.

• 0:44Chamath Palihapitiya?

  And he was a teacher in China?

• 0:45Speaker 01

  He was a teacher professor, he was a professor in China. And then he went to do an exchange program in University of Toronto first. And then a couple of years later, he moved to UBC, University of British Columbia in Vancouver. And then he was there, we were applying. Back then, it's actually very difficult to get a passport. It takes like three or four years to get a passport. We started applying in 1985-ish, it took like two, three years to get a passport. And then after you get a.

• 1:12Chamath Palihapitiya?

  Meaning a Chinese passport?

• 1:13Speaker 01

  A Chinese passport, yeah. So, and then it takes like another few years to get a visa. Like, that's just how long the process takes back then. And then, yeah, so we got it shortly after 1989.

• 1:27Chamath Palihapitiya?

  When you look back, it almost seems fortuitous. Isn't there a version where post Tiananmen, they kind of just shut everything down and say, okay, let's just reset? And then maybe they wouldn't have approved the visa or?

• 1:38Speaker 01

  No, actually, after that, the visa got easier. The passports got harder. So they no longer issued new passports, like the reissue of new passports got harder. But we were lucky. So we got the passports like, you know, like maybe a year before that. And then we're waiting for the visa and then afterwards, the visa got easier. So in some ways, that actually kind of helped us to get. To get a visa.

• 2:00Chamath Palihapitiya?

  Wow.

• 2:00Speaker 01

  Yeah, in some really weird way.

• 2:01Chamath Palihapitiya?

  Did that event shape your perspective in any way, shape or form? Or not really? Were you too young or no? You were what 12?

• 2:08Speaker 01

  I was 12. So I think consciously, no. It didn't change me that much. But subconsciously, I think, you know, there were discussions about democracy versus. So there were some discussions. I was actually living on a university campus back then. The China, the Chinese, the China Science and Technology University is one of the top four universities in China. So there were a lot of discussions among the university students, which were older, like which were probably seven to nine years older than me. So there were some discussions, but I'm, I was 12. So I wasn't really clued into it, but I think subconsciously you may have some kind of subconscious impact. I don't know.

• 2:43Chamath Palihapitiya?

  And what was it like when you, you moved to Vancouver?

• 2:46Speaker 01

  I moved to Vancouver.

• 2:47Chamath Palihapitiya?

  So you land in British Columbia.

• 2:49Speaker 01

  Yeah.

• 2:49Chamath Palihapitiya?

  In Vancouver. It's like a different. It's just different.

• 2:53Speaker 01

  It's very different. It's very different. It's just a completely new country and then.

• 2:57Chamath Palihapitiya?

  Did you know English at all or no?

• 2:58Speaker 01

  I studied English for like a couple of years in, in high, in school, but you know, I was not fluent at all. But yeah, Vancouver is great. Canada is, you know, nice green, nice greenery, open space. Everything's pretty, the living standard is high. Everything's pretty, pretty good. Everything's very clean. The fruits are bigger. So it's, it's just a really nice environment. Yeah.

• 3:22Chamath Palihapitiya?

  Did both your parents work when?

• 3:23Speaker 01

  Oh, yeah.

• 3:23Chamath Palihapitiya?

  The family was reunited. What did they do?

• 3:25Speaker 01

  So my father stayed, was like assistant professor in the, in the, in the university. He gets like a thousand Canadian dollars per month of like, I don't know what you call it.

• 3:34Chamath Palihapitiya?

  Like a stipend?

• 3:35Speaker 01

  Like a stipend.

• 3:35Chamath Palihapitiya?

  Yeah.

• 3:36Speaker 01

  We get some like really low cost housing, but the faculty housing from UBC. So we lived on campus. I think on the third day of our arrival in Canada, my mom went to a factory, sewing factory to work, like sewing clothes. She was a math and history teacher in China, but she doesn't speak that much English. So she couldn't get the same level of jobs and she basically can only work at a minimum wage factory. She did that for like seven, 10 years. And yeah, so she, she just worked there.

• 4:06Chamath Palihapitiya?

  My mom was a nurse in Sri Lanka. And when we emigrated, when we got refugee status. My father was unemployed.

• 4:13Speaker 01

  Yeah.

• 4:13Chamath Palihapitiya?

  And my mom became a housekeeper. And that's what she did. And then she became like a nurse's aide. And then I think when I was like 14 is when I got my first job.

• 4:23Speaker 01

  Yeah, yeah. I got my first job at McDonald's at, I think it's 14 or 15. I think it was 15.

• 4:28Chamath Palihapitiya?

  Yeah. We're the same age, so it probably would have been 14. I don't know what the, do you remember what the minimum wage was in British Columbia at the time?

• 4:35Speaker 01

  I do. The minimum wage was $6, but McDonald's.

• 4:38Chamath Palihapitiya?

  Oh, that's incredible. In Ontario, it was $4.55.

• 4:41Speaker 01

  So, but in McDonald's, they pay $4.50. That's below the normal wage because McDonald's somehow had like a special exemption because they, a lot of young kids work there.

• 4:48Chamath Palihapitiya?

  Yeah.

• 4:49Speaker 01

  So, so I think it was on my 14th birthday that I applied for the job. And then a week later, I was flipping burgers there. And it was the first income I had.

• 4:58Chamath Palihapitiya?

  You're not like this precocious, technical wonder kid who's coding 24/7 and learning computer science? Or were you?

• 5:08Speaker 01

  No, I wouldn't describe me as that. I think I'm, I'm a technical guy. I started computer science. I was learning, I was interested in programming even in high school. But I wasn't a programming wizard. I wasn't like, you know, one of those really genius coders. I think I'm a decent coder. I think I wrote some decent code in my, in my career. And then when I was like 28, 30-ish, I moved away from coding. I was like doing more business development, sales, et cetera. So there was like, maybe I would say eight years of my career.

• 5:41Chamath Palihapitiya?

  So you're a normal immigrant kid, learning to adapt in Canada.

• 5:44Speaker 01

  Yeah, yeah.

• 5:45Chamath Palihapitiya?

  Did you have a lot of friends?

• 5:46Speaker 01

  Yeah, I had a lot of friends. I had a lot, my.

• 5:49Chamath Palihapitiya?

  Only Asian friends or no?

• 5:50Speaker 01

  Both. I actually had like both Asian and non-Asian friends. But I was actually, in our school, most of the Asians hang out with Asians. But I was actually one of the exceptions that I had like Caucasian friends. I had all kind of different friends.

• 6:04Chamath Palihapitiya?

  Yeah.

• 6:04Speaker 01

  My teenager years in Canada was great. It was like some of the best years. Like I think those years are really shaped to me to be a happy person. I'm generally a happy person.

• 6:12Chamath Palihapitiya?

  How did it feel when you weren't able to get into my alma mater, University of Waterloo? And so had to settle for McGill? How did that make you feel? Does it make you feel stupid?

• 6:22Speaker 01

  So actually, I was deciding, my sister went to Waterloo. So I was deciding between Waterloo and McGill and maybe UT. I knew I wasn't gonna go to UBC. I wanted a different city.

• 6:33Chamath Palihapitiya?

  Yeah.

• 6:33Speaker 01

  And actually, UBC gave me the offer, but I just knew I don't wanna go there. At the time, my friend's mother, who I really respect, she said, well, you might wanna become a doctor because doctors have a good living, a good lifestyle. I took her advice. I studied biology and Waterloo is not much of a biology school.

• 6:53Chamath Palihapitiya?

  True.

• 6:54Speaker 01

  So I went to McGill. But then, one semester later, I said, no more biology. I'm gonna move to computer science.

• 7:02Chamath Palihapitiya?

  Was it a typical kind of college experience for you? Did you have great jobs in the summertime? Or were you just like an average, normal university kid? How'd you pay for school, by the way?

• 7:12Speaker 01

  I worked every summer. I worked every summer and I also worked part-time during the school year.

• 7:17Chamath Palihapitiya?

  So no debt. You were like, I must graduate without debt.

• 7:19Speaker 01

  Yeah, I didn't take any student debt. The first year, I actually still took about $6,000 Canadian from my dad. The second year, I was still a bit short. My sister gave me $3,000. And then from that point on, I never took money from, at all. I was self-sustainable.

• 7:35Chamath Palihapitiya?

  Wow.

• 7:35Speaker 01

  Yeah, so no student debt, very lucky. And, but I just worked every summer, every, like, yeah.

• 7:41Chamath Palihapitiya?

  You know, the best thing about Waterloo, which was a savior for me.

• 7:43Speaker 01

  The co-op program.

• 7:44Chamath Palihapitiya?

  It was a co-op program, yeah. And I had these incredible co-op jobs. I still graduated with about $30,000 of debt. But I was also a pretty prolific trader in equities.

• 7:57Speaker 01

  Okay.

• 7:57Chamath Palihapitiya?

  And my boss, this guy Mike Fisher, did this incredible kindness to me where I was working at a bank. And I was a derivatives trader, that was my day job. But I was trading equities. And I'd made him enough money. And he said, he called me Sherman, didn't call me Chamath. He said, Sherman, how much debt do you have? And I said, it's about 30, I said, Fish, it's about 30,000, 32,000. And he said, go downstairs right now to the CIBC and pay your debt and I'll write you a check.

• 8:26Speaker 01

  Wow.

• 8:26Chamath Palihapitiya?

  And he wrote me a $32,000 check.

• 8:29Speaker 01

  Should have said 300,000.

• 8:33Chamath Palihapitiya?

  But Canada is incredible because you can get this education and it doesn't saddle you with this debt that you can't overcome, which is not true in the United States for many people.

• 8:43Speaker 01

  Yeah, even in McGill, there were people from the United States going to McGill pay international students tuition and it was still cheaper than the US. I was like, that's crazy.

• 8:50Chamath Palihapitiya?

  That's crazy.

• 8:51Speaker 01

  Yeah, so yeah, we were lucky that the US, the Canadian tuition was okay.

• 8:56Chamath Palihapitiya?

  So you graduate from McGill in computer science?

• 8:58Speaker 01

  Yeah, in computer. Actually, I didn't graduate from McGill. I went there for four years and on my third year, I got an internship. On my fourth year, I got my, third year, I got an internship job and then extended, extended, extended, and I didn't go, didn't go back to McGill. So I didn't graduate from McGill. And later on, I found out I still need a bachelor's degree to apply for work visas in Japan. So I went to, well, this is like the doc, this is 2000, this is the dot com like height. So I went to an online education program called the American College of Computer Science and got a degree there.

• 9:32Chamath Palihapitiya?

  Oh, my God. Yeah, so you're technically a graduate from that school.

• 9:35Speaker 01

  Technically, yes.

• 9:36Chamath Palihapitiya?

  Okay, so which internship did you get where you started to work there?

• 9:41Speaker 01

  So I got an internship in Tokyo. So I always, from first year of college, I always worked on a programming job. So I worked at a company called Original Sim, writing some simulation software. And then third year, I got into a company in Japan, in Tokyo, called Fusion Systems Japan. And then they were writing order execution systems for brokers of the Tokyo Stock Exchange.

• 10:05Chamath Palihapitiya?

  But sorry, that's a Japanese company with an office in Montreal or an office in Canada or?

• 10:08Speaker 01

  No, no, no. I went to Tokyo.

• 10:10Chamath Palihapitiya?

  You went to Tokyo.

• 10:10Speaker 01

  Yeah, it's actually an American, a bunch of American guys' company that's in Tokyo. So it's like a bunch of guys who are.

• 10:16Chamath Palihapitiya?

  And you're thinking, this is an adventure. I'm gonna go and live in Tokyo for a summer.

• 10:20Speaker 01

  Yeah, yeah. I mean, I was a college student. Living in Tokyo is like, you know, it's fun. It's a dream. Yeah, yeah. And the first time you go there is like, it's, it's.

• 10:29Chamath Palihapitiya?

  It's from the future.

• 10:30Speaker 01

  It's cool. Yeah, yeah.

• 10:31Chamath Palihapitiya?

  And what kind of software did you write?

• 10:33Speaker 01

  Mostly order execution software. So the same software that moves orders.

• 10:37Chamath Palihapitiya?

  What drives Binance today?

• 10:38Speaker 01

  Pretty much, pretty much. So it's the same, same style. Like, actually, all the software I was involved with, no decision making.

• 10:44Chamath Palihapitiya?

  So when you first and were exposed to this. It was not like, oh, wow, I love this. This makes sense. Or was it more, OK, I'm asked to write this code and I understand the concept, so let me just do it. Were you attracted to the subject matter or you just did it because it was your job?

• 11:00Speaker 01

  I first did it because it was my job, right? I was so young, I didn't know what all the different industries are. And actually, when I got to the company, the company was giving me a project on working on digital imaging storage systems, like this basically not iPhone photos app, but for medical imaging for Nikon. But very soon, the company's main product is the order execution system. So I was involved in that and then that became the thing over my career. And I like it because it requires quite a lot of technical expertise. Everything is about efficiency, making it go as fast as possible, process as low latency as possible. That kind of appeals to me. I'm an efficiency driven guy, like subconsciously.

• 11:40Chamath Palihapitiya?

  And just to double click on that, when you look at high frequency trading organization, the SaaS Guanahan is the jumps, they go to such a degree to basically optimize for efficiency and low latency all the way down to it's their own circuit breakers, it's their own physical fiber infrastructure. They're willing to sort of pay the price to just shave off a handful of milliseconds on either end. How does that manifest in the software? So when you're writing that kind of software, how do you actually optimize for those boundary conditions in code?

• 12:11Speaker 01

  Yeah, yeah. So well, there's quite a few levels, right? The first level you do is like basically you write your software to be efficient and fast, like no slowness. You want to remove all the database lookups, so you want to do everything in memory. And then you want to reduce any sort of additional computation. You want to simplify the risk checks, especially pre order, pre trade risk checks. And then the more advanced versions, you move on to like the FPGA, which is a network chip card that's on the network card, on the, what we call the ether card.

• 12:41Chamath Palihapitiya?

  So that you don't have to go all the way up to memory and come all the way back down to the processor.

• 12:45Speaker 01

  So back then, when I was like still writing code, like maybe 10 years ago, that round trip is about 100 microseconds. And then by avoiding that, you'd reduce down to 20 microseconds. And then you move into the physical infrastructure, you want a colocation, right?

• 12:59Chamath Palihapitiya?

  Why haven't? These organizations like in the AI world, for example, with Grok, our big observation even 10 years ago when we were starting the business was this exact idea, which is it's really inefficient for to sit in a GPU, to go all the way up to HBM, to come back down. So let's just take SRAM and just do everything here on chip.

• 13:18Speaker 01

  Yeah, yeah.

• 13:18Chamath Palihapitiya?

  Right? Manage it with C to C and that technical problem made a lot of sense. And very, very fast for the decode phase of inference. Makes a ton of sense. Why, when so much money is on the line for high frequency trading, why did they never try their own custom silicon? I understand FPGAs, but nobody really went to the point of actually saying, here's a specific ASIC, or did they? And we just don't know about it.

• 13:40Speaker 01

  I don't think it exists on very large scale. The, I think the algorithms change too often. So when you go to hardware, like you want to design on chip, it is very efficient, it's highly, it's very fast. But when you want to change it, it takes a long time. Right? So when you want to reprogram it, I think FPGA already offers kind of the best.

• 14:02Chamath Palihapitiya?

  Best of both worlds.

• 14:02Speaker 01

  The both worlds. Even FPGAs, even on a reprogramming, the programming cycle is much, is 10 times longer than software.

• 14:08Chamath Palihapitiya?

  The company you worked at in Japan, was it successful?

• 14:11Speaker 01

  Successful. You got, that company got sold to a NASDAQ listed company just before 2000.

• 14:16Chamath Palihapitiya?

  For a lot of money?

• 14:17Speaker 01

  For like $52 million back then. So that was decent money.

• 14:20Chamath Palihapitiya?

  And so is that when you said, hey, hold on, there's something here? Or no, was it something else that happened?

• 14:26Speaker 01

  No, so at that time I was too young. I was like 20 something.

• 14:30Chamath Palihapitiya?

  So you're working at this place, you're just a coder.

• 14:32Speaker 01

  Yeah.

• 14:32Chamath Palihapitiya?

  You're a salaryman?

• 14:33Speaker 01

  Yeah.

• 14:34Chamath Palihapitiya?

  In Japanese terms.

• 14:35Speaker 01

  Yeah, salaryman, yeah.

• 14:36Chamath Palihapitiya?

  You're a salaryman. So then walk us through what happens afterwards.

• 14:38Speaker 01

  So that company got sold. They acquired, there was a lot of culture clashes between the parent company versus the original company. That's my first experience about, you know, how mergers may not work.

• 14:48Chamath Palihapitiya?

  Yeah.

• 14:48Speaker 01

  The two managements were just clashing. And then the same partners went to do a different company called Building 2. But now this partners, I didn't get any money, but the partners got quite a bit of money now. So they rented a very fancy office. That company only lasted a year. It means that previous success doesn't guarantee future success. In fact. So they spent a lot of money, had a very nice office, but there's zero revenue. So that folded within a year and that's 2001. And so, and early 2001, I was looking for new jobs and then Bloomberg was hiring. And this is right before nine eleven. I kind of got an offer before nine eleven and then nine eleven happened. I still haven't moved. And then I. Where was this, to New York or?

• 15:31Speaker 01

  This was in, well, I was still in Tokyo back then and then Bloomberg is in New York. The offer I was. The offer was in New York. The offer was in New York. So after nine eleven, I called Bloomberg, say, hey, is the job still there? Do you still want me to go? And they said, well, do you still want to come? I said, yeah, okay. So then I went, so I went to New York in November of 2001. Wow. And what was that like? The streets were pretty quiet. And but, you know, I was fine. I was, you know, and New York is, New York was quiet for a few months, but it became lively pretty quickly, I think. So I didn't feel too much issues. So I then went to New York and worked at Bloomberg for four years. Doing again, the same thing. You're kind of a salary guy. You're working at a big company.

• 16:16Speaker 01

  Salary, bonus, maybe some options or some phantom equity or something like that. Yeah, so I joined as a senior developer. I was put into a team called Tradebook Futures. They just formed this team and they had a system that allowed people to trade futures on Bloomberg, but it wasn't, it was like spread out. So they collected that into, into, into one, into one team. And still no inkling of like that entrepreneurial bug. Not really. Back then I was like, nah, I. Like, what were you looking for? Stability, like why, like why Bloomberg being in New York? Like, what was it? I was just a young guy. I was like, I think I was like twenty four, twenty, twenty four, twenty five. Okay. So I was just a young guy trying to get a job and, you know, experience different parts of the world and get, and, and just find my way through.

• 17:00Speaker 01

  I knew I wasn't experienced enough to do entrepreneurship myself, right? So I was, and I was working at a small company in Tokyo. The company only had like 200 people. Bloomberg at the time had about 3,000 people. So to me, that was a big company.

• 17:13Chamath Palihapitiya?

  Yeah.

• 17:13Speaker 01

  And they have fancy offices, fish tanks, free food and everything. So I joined as a senior developer. I got some good bosses. I got promoted three times in two years. And then I was leading a team of 60 initially, and then it kind of grew to about 80 people. And that's when I became sort of a manager. I no longer wrote code and I started.

• 17:32Chamath Palihapitiya?

  The worst transition.

• 17:33Speaker 01

  The worst transition, right? So that's kind of my Bloomberg experience. Yeah, so that, and I, yeah, so I stayed there for four years.

• 17:41Chamath Palihapitiya?

  And then you quit and moved to China?

• 17:43Speaker 01

  Yes.

• 17:44Chamath Palihapitiya?

  How does that happen?

• 17:44Speaker 01

  I think it was around like beginning of 2005. Again, the same friends I had made in Japan, they were talking about starting a new company, a new fintech company. And they were in Asia, right? So they're talking about Tokyo, Shanghai or Hong Kong. And they said Shanghai is most likely the most happening place for the future fintech. We should have picked Hong Kong. Hong Kong had a lot more happening since then. So I went there in 2005. So it was like five foreigners from a Chinese perspective, five Caucasians, four Caucasians plus a Japanese plus me. I'm the only one who speaks Chinese. And my Chinese was kind of rusty back then, too. So the six of us went there to do a new IT startup in Shanghai.

• 18:28Chamath Palihapitiya?

  So all you guys just land there and what was the idea?

• 18:31Speaker 01

  So we thought, you know, we had all this Wall Street experience, Wall Street trading technology experience.

• 18:36Chamath Palihapitiya?

  So your other friends, had they moved to New York or no? They were still in Japan doing their own thing?

• 18:41Speaker 01

  Two of the friends were in New York with me. And then the other three were from Japan. They were, they always, they were, so the six of us came together. And we wanted to do, we want, our idea was let's bring the Wall Street trading technology into China. So we can service the brokers and exchanges in China. But then, so we went, they rented a very fancy office again.

• 19:04Chamath Palihapitiya?

  Wait, okay, so hold on just. So when you guys start this company, so this is now your first entrepreneurial. You're like, okay, let's do this.

• 19:12Speaker 01

  Pretty much.

• 19:13Chamath Palihapitiya?

  Did you know? To even ask the question like, okay, guys, what's our equity split? What's the cap table? Did you know any of these things? Or you're just like, great, let's go do it. I'm just assuming it's one sixth. We're equal. Like, how did it all?

• 19:26Speaker 01

  It wasn't one sixth. It was like the top guy had like, I don't know, 39, 40%. And the rest five of us split equally. So I had about 11% or so.

• 19:34Chamath Palihapitiya?

  Okay.

• 19:35Speaker 01

  And so I knew that, but I didn't know like, you know, all the ins and outs about, you know, shareholder rights, what terms. I didn't know any of that.

• 19:42Chamath Palihapitiya?

  Yeah. Preferred versus common, none of it.

• 19:44Speaker 01

  And then I, yeah.

• 19:45Chamath Palihapitiya?

  You're like, great, I got 11%. I'm moving to Shanghai.

• 19:47Speaker 01

  Yeah, so I just have 11%. I didn't, I have no idea what common stock is or versus preferred. So just went. And then, but so I was a junior partner in this group. And then, uh, once we landed in China, I started, because I speak Chinese, right? So I began talking to potential clients. I went to talk to brokers. I found out we are registered as a wholly foreign owned, what we call Wolfie.

• 20:08Chamath Palihapitiya?

  Wolfie, yeah.

• 20:09Speaker 01

  Uh, wholly, wholly foreign owned enterprise.

• 20:11Chamath Palihapitiya?

  Yeah.

• 20:13Speaker 01

  The Chinese brokers and financial institutions are not allowed to work with a Wolfie.

• 20:16Chamath Palihapitiya?

  That's right.

• 20:17Speaker 01

  So we found out after we started the company, while we were in Shanghai. And so the company pivoted towards doing, um, uh, any, any, any IT system for any, for any company. We can be like-

• 20:28Chamath Palihapitiya?

  Work for hire.

• 20:28Speaker 01

  Work for hire. We can be fixing-

• 20:29Chamath Palihapitiya?

  Deloitte, you became Deloitte.

• 20:31Speaker 01

  Not, not even Deloitte. We can be fixing printers or we can be writing like, you know, SAP implementations for you. We did all of that. So there's a whole spectrum of things. And so we did that for a few years and we actually made a living.

• 20:41Chamath Palihapitiya?

  For a few years?

• 20:42Speaker 01

  Yeah, for, for, for a few years, like, uh, and we made a living out of that. Yeah. We, we started, we had a, quite a number of automotive clients, uh, the Shanghai General Motors, uh, Shanghai Volkswagen, uh, Shanghai First Automotive, uh, First Automotive. They were all clients of ours. And then like, maybe three or four years in, uh, we started having offices in Hong Kong. And then we were dealing with Morgan Stanley, Deutsche Bank, Credit Suisse.

• 21:06Chamath Palihapitiya?

  So it grew, so it was, it was successful.

• 21:08Speaker 01

  The company's still around. The company's still around. So I, I left in 2013 after eight years. But the company is still around.

• 21:14Chamath Palihapitiya?

  So in the eight years you worked at that company, all in Shanghai?

• 21:17Speaker 01

  I was mostly in Shanghai, but then I spent quite a bit of time helping to set up the Hong Kong office. And then I was also doing quite a lot of work for some clients in Tokyo.

• 21:25Chamath Palihapitiya?

  How big did that company get?

• 21:27Speaker 01

  I think it got to about 200 people again, and it's kind of stayed there for as far as I know even till now.

• 21:33Chamath Palihapitiya?

  And so as a junior partner, you just take profits and you share it like?

• 21:37Speaker 01

  Yeah, yeah. So, well, actually, we didn't take that much profits. I actually invested most of my savings back into that company, and I actually didn't cash out a penny. But after a few years, the company was stable enough to pay the partner salaries that all of our kids go to international schools. So we get a six-figure salary.

• 21:57Chamath Palihapitiya?

  At that point, you had gotten married?

• 21:59Speaker 01

  Yes. Yeah, so at that point, yeah, so at that point, I got married when I was in New York. So like, yeah, so and then, yeah, so I had two kids.

• 22:09Chamath Palihapitiya?

  And you had met your ex-wife how?

• 22:11Speaker 01

  Yeah, I met her in Tokyo when I first went to Tokyo. So I met her in 1999-ish, when I was first in Tokyo, like doing the interns.

• 22:20Chamath Palihapitiya?

  Okay.

• 22:20Speaker 01

  And then she visited me in New York, and then, you know, we got married, and then we had kids. Now we are separated, we're divorced. In Shanghai, I had young kids, and you know, it was enough salary to put the kids into international school. And that was, that was good enough for me.

• 22:37Chamath Palihapitiya?

  Wow.

• 22:38Speaker 01

  Yeah.

• 22:38Chamath Palihapitiya?

  So far, again, nothing here tells anybody that you're about to go and start Binance?

• 22:43Speaker 01

  No, no.

• 22:44Chamath Palihapitiya?

  Nothing?

• 22:44Speaker 01

  Nothing, no. I didn't know.

• 22:46Chamath Palihapitiya?

  So then 2013, 2014, how old were you then at that point? You were?

• 22:52Speaker 01

  2013, I would be 36.

• 22:54Chamath Palihapitiya?

  Yeah, mid-30s.

• 22:55Speaker 01

  Yeah, yeah, so.

• 22:56Chamath Palihapitiya?

  So again, salary guy, junior partner at this thing, it's going well, your kids are in private school.

• 23:02Speaker 01

  Yeah, yeah.

• 23:03Chamath Palihapitiya?

  So then what happens?

• 23:04Speaker 01

  So then I came across Bitcoin, right? So, well, my friend tells me, look, Caesar, you gotta look at this thing called Bitcoin. I look into it, I was like, it took me about roughly six months to fully understand it. So that was from like roughly July 2013.

• 23:18Chamath Palihapitiya?

  And that's because you read the white paper and you said, I need to read it again and read it again, or?

• 23:21Speaker 01

  Yeah, yeah, pretty much. And then, because back then, there was the Bitcoin Talk forum.

• 23:26Chamath Palihapitiya?

  Yeah.

• 23:26Speaker 01

  And then that's pretty much it.

• 23:28Chamath Palihapitiya?

  Did you see my Bloomberg article in 2012? Does that have any influence?

• 23:32Speaker 01

  Unfortunately, yeah.

• 23:33Chamath Palihapitiya?

  Don't, I read a bunch of stuff. I actually don't remember what I, I'm just kidding. But I did write this thing and it's funny because I had a kind of a relationship with Mike Bloomberg. He was kind of not even mentor, like he was just too senior, but he knew me, he liked me. He would invite me to certain things.

• 23:49Speaker 01

  With Mike Bloomberg?

• 23:49Chamath Palihapitiya?

  Yeah, with Bloomberg. And, and then I got to know some of Mike's team.

• 23:52Speaker 01

  Yeah, yeah.

• 23:53Chamath Palihapitiya?

  And in 2012 or so, they said, Chamath, would you write an op ed?

• 23:57Speaker 01

  Okay.

• 23:57Chamath Palihapitiya?

  And I was like, yeah. And I wrote it about Bitcoin and I said, everybody should, would put 1% of their net worth into Bitcoin. And I said, it's basically schmuck insurance.

• 24:06Speaker 01

  Yeah.

• 24:06Chamath Palihapitiya?

  And then they published it in the Bloomberg terminal or whatever. And that's when I got red pilled on Bitcoin where I was like, wow. It's the most incredibly interesting technical product that I had read about. And I think the thing that captivated me, I don't know if you felt this way.

• 24:19Speaker 01

  Yeah.

• 24:20Chamath Palihapitiya?

  It was the only white paper that I read end to end where I thought, this is one of the most elegantly written pieces of non-technical prose. Do you know what I'm trying to say? Like it's not something that is like dense in an archive that is just meant for PhDs.

• 24:35Speaker 01

  Yeah.

• 24:36Chamath Palihapitiya?

  You could literally give it to your sister, to your brother, to somebody non-technical and they would understand it.

• 24:42Speaker 01

  Yeah, yeah. And it's only nine pages.

• 24:44Chamath Palihapitiya?

  And exactly, you know what an enormous amount of intellectual skill it takes to do that?

• 24:48Speaker 01

  Oh, yeah. Oh, yeah. It's much harder to write it very short.

• 24:50Chamath Palihapitiya?

  Much harder and elegantly and simply.

• 24:53Speaker 01

  Yeah, yeah. If anybody else tried to rewrite that, I think it'd be 90 pages.

• 24:56Chamath Palihapitiya?

  So the friend that showed it to you, was he a coworker of yours or no, just a random friend in Shanghai?

• 25:01Speaker 01

  It's a friend, it's a, it's a, it's a random, well, not a random, it's a friend. We don't have any working relationships. His name is Ron Tao. He runs, I guess now, Sky Nine Ventures. And back then, he was at Lightspeed Ventures.

• 25:11Chamath Palihapitiya?

  Of course.

• 25:12Speaker 01

  He was a managing director of Lightspeed Ventures in China.

• 25:15Chamath Palihapitiya?

  Okay.

• 25:15Speaker 01

  So we play, we have a poker house game, like, you know, small stakes, a bunch of, a bunch of entrepreneur, struggling entrepreneurs versus like VCs. So the VCs have all the money and all the time.

• 25:27Chamath Palihapitiya?

  David versus Gladys.

• 25:28Speaker 01

  Yeah.

• 25:28Chamath Palihapitiya?

  Yeah.

• 25:29Speaker 01

  So, but you know, it's a fun, it's a fun game. It's not a very serious game. So in one of the poker games, Ron said, see, you should look at this thing called Bitcoin. I was like, okay, Bitcoin. Okay. So, and so we talked about it a little bit. And then Bobby Lee, who was at the time was working for Walmart, was just about to quit Walmart to join BTC China to become their CEO and. As part of that deal, Bobby said he will bring Ron in as an investor, light speed into Into BTCC. Into BTCC. So that's in July 2013. I was like, okay, so they are, these two guys are pretty serious about this. So I had lunch with Bobby the next day and Bobby said, put 10% of your net worth into Bitcoin. He said, there's a small chance you will go to zero, then you lose 10%. There's a much higher chance you will go 10x and you will double

• 26:13Speaker 01

  your net worth. I was like, okay, that sounds pretty serious. So that's when I started learning, reading the white paper more carefully. Took me six months. So it was till the end of 2013, I started like, I'm, I'm convinced now. I'm ready to go. But then Bitcoin went from $70 in mid 2013 to like $1,000 by end of 2013. So you already went more than like 15x. How did that make you feel? I was like, I'm too late. I was like, I wish I got in early. Yeah. Because back then, right? It doesn't matter when you get into Bitcoin, you always feel late. Yeah. Right? Because anyone you talk to has, in the Bitcoin industry, has bought before you. And did you talk to anybody while you were learning about it to say, like, you have a community in Shanghai? There's a community, there's a very small community in Shanghai. And then I

• 26:58Speaker 01

  was basically talking to anybody in the world that's, that's willing to talk with me. And then I had a couple of friends in Taiwan. They used to, they, they worked for TSMC back then because, and then they were trying to do a mining chip for Bitcoin. So two of those guys left TSMC to try to do this startup. Startup never, never really took off, but that was one group of guys I was talking to. There was another couple, they were mostly miners. There was another guy called, his nickname is Fish, Silver Fish in China. He's like a big miner. He runs the F2 pool even today. Oh, sure. So those guys were basically in Hangzhou. You know, I went, they came to Shanghai, I talked to them, etc. So there was a group of guys that you talked to. And then the biggest

• 27:41Speaker 01

  thing was in December 2013, December 13th, 2013-ish, there was a Bitcoin conference in Las Vegas. I flew there to meet, everyone, everyone in the industry was there. There was a 200 people conference. Vitalik was there, Matt Rosek was there, Charlie Lee was there.

• 28:01Speaker 01

  A bunch of guys were there. And the same same guys still today. And then at the time, just before that, it was the Silk Road arrest of Ross Uberich. So the media was like, no, this Bitcoin is only used by drug lords. And when you go to the conference, it was like a bunch of kids, a bunch of geeks. And they're very nice people, right? So you can talk to Vitalik, you know, he's a very nice person.

• 28:24Chamath Palihapitiya?

  Were you still working at that company while you were doing all of this? Moonlighting?

• 28:28Speaker 01

  Yes, so this is what this is kind of the.

• 28:30Chamath Palihapitiya?

  You tell your partners, hey, guys, I'm just gonna go to Vegas for a couple of days. I'll be back.

• 28:34Speaker 01

  Pretty much, yeah, yeah. And then, and then when I got back, I told the partners, we should do a Bitcoin payment system. Because Bitpay was kind of the big player back then. Bitpay just raised four million US dollars in 2013. So they was kind of the large player.

• 28:49Chamath Palihapitiya?

  Can I tell you a very funny? I have two Bitpay stories.

• 28:52Speaker 01

  Sure.

• 28:53Chamath Palihapitiya?

  I was very focused on trying to prove the transactional capability of Bitcoin. I went to my local car dealership and I bought a car with Bitcoin using Bitpay in 2012 or 13. That Range Rover is probably 90 million dollars. And then, even more stupidly, there was a real estate development in Lake Tahoe.

• 29:20Speaker 01

  Yeah.

• 29:21Chamath Palihapitiya?

  Called Martis Camp. Beautiful. And I had owned a couple of lots. And I said, you know, it would be great if I actually could prove that you could buy real estate with Bitcoin. And I called the guys at Bitpay and they were like, yeah, we can facilitate this transaction, no problem. I bought a piece of land. And then again, I thought, this is an interesting story and the Wall Street Journal wrote about it. Now that piece of land is a billion dollars.

• 29:42Speaker 01

  But you cannot calculate this way, right?

• 29:44Chamath Palihapitiya?

  So. CZ, I calculated this way every day.

• 29:46Speaker 01

  You can't calculate it that way because.

• 29:48Chamath Palihapitiya?

  Stupidest purchase ever.

• 29:49Speaker 01

  No, no, no, no, no. That's the bucket of money mentality, right?

• 29:53Chamath Palihapitiya?

  No, no, no, it's true.

• 29:54Speaker 01

  Right? So even if you didn't use Bitcoin, you would have used some money.

• 29:57Chamath Palihapitiya?

  Exactly.

• 29:58Speaker 01

  Buy the land, you could have used that money to buy Bitcoin.

• 29:59Chamath Palihapitiya?

  Yeah.

• 30:00Speaker 01

  Right? So, yeah.

• 30:02Chamath Palihapitiya?

  So you're like, hey, we should do a version of Bitbit.

• 30:04Speaker 01

  Yeah, yeah.

• 30:05Chamath Palihapitiya?

  And your partners are like, what are you talking about?

• 30:06Speaker 01

  Exactly.

• 30:07Chamath Palihapitiya?

  And now, at this point, you still hadn't bought any Bitcoin.

• 30:10Speaker 01

  No, at this point, like, I had like maybe one Bitcoin.

• 30:13Chamath Palihapitiya?

  Yeah.

• 30:13Speaker 01

  Yeah, and one Bitcoin was like only a thousand bucks back then. So, yeah.

• 30:16Chamath Palihapitiya?

  So then what happens?

• 30:18Speaker 01

  And then, so but, and then so I tell my partner, look, I think this is, this is the biggest thing, this is the biggest thing in my life. Right, so when, I think there's three fundamental, back then, I realized there was like two fundamental technologies in my life. There's the internet, I was too young to do too much with it, and there was this Bitcoin thing. And I was, I was thirty-five, thirty-six, I wasn't gonna miss it. The next thing that's gonna come along is gonna be fifteen years later.

• 30:39Chamath Palihapitiya?

  Did you feel old when you go to Vegas and you see all these young twenty-two-year-old kids and you're like, I missed it? Did you think that at any point, or?

• 30:46Speaker 01

  No, thirty-five, thirty-six is still okay.

• 30:48Chamath Palihapitiya?

  Okay.

• 30:49Speaker 01

  So it's still like doable, you know, you don't feel super old. Today, I feel that. But I thought, look, the next thing that will come will be ten, fifteen years later, and that's AI, right? So today, I feel like there's three fundamental technologies in my life. But back then, like, that's the, that's the, that's the thing.

• 31:04Chamath Palihapitiya?

  Right.

• 31:05Speaker 01

  So for me, it was very clear, I gotta, I gotta do something in this industry.

• 31:08Chamath Palihapitiya?

  Right.

• 31:08Speaker 01

  So, and so I told my partners, look, I'm gonna, I'm gonna, I'm gonna quit. And I'm gonna do, work in the Bitcoin industry, that's what it's called back then. And then, and then I was, I also need to buy Bitcoin. And I don't have many money, so I don't have, so I just, I said, look, I'm gonna sell my apartment in Shanghai and then buy Bitcoin. But selling the apartment takes time, so it took me like a solid few months to sell it. And it was it, it was only.

• 31:36Chamath Palihapitiya?

  You sold it, where did, you just got a rental apartment?

• 31:38Speaker 01

  I sold it, at the time, actually, my family also moved to Tokyo. So my family moved to Tokyo, we lived in a rental apartment.

• 31:47Chamath Palihapitiya?

  In Tokyo?

• 31:48Speaker 01

  In Tokyo. And then I was traveling in Shanghai, so that's kind of the time I started moving, started separating from, from the, from, from the family as well. So I was spending a lot of time traveling.

• 31:59Chamath Palihapitiya?

  Right.

• 32:00Speaker 01

  And so I sold the apartment and for roughly nine hundred thousand dollars, like just under a million bucks. And then started buying and I got paid in trenches because you know you get a first down payment, you gotta pay in trenches and every trench I get, I just buy. The first trench at eight hundred dollars and then Bitcoin's dropping six hundred dollars, four hundred dollars, kind of averaged to about six hundred dollars.

• 32:21Chamath Palihapitiya?

  Incredible.

• 32:22Speaker 01

  Yeah.

• 32:22Chamath Palihapitiya?

  Incredible. So now you have your Bitcoin position, but you still don't have a job.

• 32:26Speaker 01

  Yeah, well, I was looking for a job at the same time.

• 32:28Chamath Palihapitiya?

  But you were looking for a job in the Bitcoin industry or you were just looking for any job?

• 32:31Speaker 01

  In the Bitcoin industry. That was very specific. It didn't take me that long to get a job. Like the gap was probably from the time I said I'm gonna quit until I finalized the job was probably only about two to three weeks.

• 32:42Chamath Palihapitiya?

  Oh, wow.

• 32:42Speaker 01

  Yeah.

• 32:43Chamath Palihapitiya?

  And so who hired you?

• 32:44Speaker 01

  I first discussed with BTCC Bobby, he wanted to hire me and then, but then Blockchain Info came along. I bought me the Roger Veer. So and then at the time Blockchain, Blockchain Info was, I was the third person to join Blockchain Info team. There was Ben Reeves, who's the founder, and there's Nicholas Carey, who was just the CEO, hired the CEO. And I was like the third guy in, so I was like VP of Engineering because Ben, we want to reserve the CTO title for Ben. So, so yeah, I joined, I joined Blockchain Info and flew to York in London, like three hours north of New London.

• 33:21Speaker 01

  I spent some time there, you know, figuring out what to do, yeah.

• 33:24Chamath Palihapitiya?

  And how did that go?

• 33:25Speaker 01

  That didn't go very well. We expanded the team to eighteen people and then Peter Smith joined as a CFO wanting to raise money for Blockchain Info. Coinbase just finished raising it, raising around thirty, raising thirty million dollars. And that was a big one in the industry back then.

• 33:43Speaker 01

  Peter Smith somehow maneuvered himself into the CEO position, pushing like Nicholas Carey to the product manager kind of role. The culture kind of changed a little bit, so I left. A bunch of the developers I hired left and then.

• 33:58Speaker 01

  Ben Reeves sold quite a lot of his position and also left a few months later. So that was that was my so that was only like a few. I think I was only there for like six, seven months. So that didn't work out too well, but I learned a lot from that experience.

• 34:13Chamath Palihapitiya?

  Yeah, you learn what not to do.

• 34:14Speaker 01

  No, they're no like blockchain info. When I joined the Ben Reeves said, look, we have no company. We have no office. Everyone works remotely. We just pay everybody in Bitcoin. And so that's something I learned from that company. And I still look, that's still very heavily used in finance today. So I learned a lot. I also learned that, you know, that company, the whole marketing, they at the time blockchain info was the largest user platform in the industry. Right? So they had about two million wallets, more than Coinbase at the time. And the entire marketing was one thread on Bitcoin talk.org. And one thread, the thread is 150 pages. Ben Reeves just replies to that thread. And that's how you grew to a 2 million user platform.

• 34:57Speaker 01

  I was like, okay, so you can do some, you can do quite a lot of guerrilla marketing to be successful.

• 35:02Chamath Palihapitiya?

  Wow.

• 35:02Speaker 01

  So I learned a lot, but the culture changed a little bit. It wasn't with fit for for me. And then I left and then that was when He Yi hired me into OK Coin. Yeah. So I He Yi said, look, why are you working for this wallet company? Your experience is dealing with order execution exchanges. So so He Yi hired me there.

• 35:24Chamath Palihapitiya?

  As a developer?

• 35:26Speaker 01

  As a CTO.

• 35:27Chamath Palihapitiya?

  As a CTO.

• 35:28Speaker 01

  Yeah. So, yeah, so in the process, I think BTC China helped me again. So, you know, I was kind of looking for a job again, right? So I left and then He Yi was talking to me and Bobby Lee found out and Bobby Lee meant so OK X, OK Coin back then will offer me 5% equity. And then for, sorry, BTC China came along and offered me 10% equity. And then OKCOIN matched it within three hours. And then I was debating between Shanghai and Beijing. And I decided to go to Beijing to join OKCOIN back then. He Yi at that time had 1% equity. So she hired me to be like the bigger sort of partner in the business. Wow.

• 36:10Speaker 01

  So that's how I went to OKCOIN for about eight months or so. That didn't last long either. Because? I think there were also culture differences at OKCOIN.

• 36:23Speaker 01

  There were some stuff that I didn't agree with, both in terms of like, you know, simple examples like how they run promotions, how they do fee discounts, where you have to ask for it, like they advertise a fee discount, but you have to ask for it to get it. It doesn't apply to everybody, even though they advertise as such. So small things like that. And then, so yeah, so that was in early 2015. I said, no, I'm gonna leave. So that lasted for a few months in 2015, 2014 mostly. Yeah. So how do we get from there to Binance? So 2015, I, with a couple of my old colleagues,

• 37:06Speaker 01

  said, we're gonna do a Bitcoin exchange in Tokyo, in Japan. Because this is a year after- After Mt. Gox and all that, yeah. Yeah, so there's a vacuum in Japan. So we got two developers that came to me on the same day I decided to leave OKCOIN. They came to me and said, look, somehow they also quit their respective jobs. I said, okay, well, why don't the three of us do something? And so I, we said, okay, so I will be the CEO and then I'll be the big guy with more equity and then I'll be responsible for fundraising.

• 37:37Speaker 01

  And I was paying them a salary out of my own savings and I wasn't taking anything. So the two developer person, we whipped up a demo very quickly. We downloaded an open source software for an exchange. And then we tweaked the UI to be a little bit sexier. And then we hooked up.

• 37:53Chamath Palihapitiya?

  You just forked an open source project, like this is our product, this is Binance?

• 37:57Speaker 01

  No, we didn't say it was Binance.

• 37:58Chamath Palihapitiya?

  Yeah.

• 37:58Speaker 01

  This is before, this is before Binance.

• 38:00Chamath Palihapitiya?

  Yeah.

• 38:01Speaker 01

  We didn't say, I was very transparent. I was like, we whipped up this demo up in two days, or in a few days. And this is a demo that we can show you, but this is not our.

• 38:09Chamath Palihapitiya?

  The ultimate product.

• 38:10Speaker 01

  This is not.

• 38:10Chamath Palihapitiya?

  It's just, it's just a proof of concept. Just, yeah.

• 38:13Speaker 01

  So it's like, yeah, so, and then, but, and then we had a script that took Biffinex market data. Biffinex was like the large exchange back then. We just kind of copied their order book and the order book was flashing those trades going on. So you have a very lively demo. And when the investors saw that, it was like, wow, this is good technology.

• 38:33Speaker 01

  But it's not just a demo. It's, it's, it's, when they ask me questions, I can answer in very deep ways. Right? When they ask me like, how do, how do you structure this to be a fast exchange? We, I can talk about, you know, in-memory matching.

• 38:47Chamath Palihapitiya?

  Optimizing database, all, all of that. All the stuff you've learned.

• 38:50Speaker 01

  Yeah. So I can go really deep when they ask questions, right? So my, my, my knowledge is there.

• 38:54Chamath Palihapitiya?

  Right.

• 38:55Speaker 01

  So they were like, they were like, okay, this technology is cool, but you, you won't, you won't be successful running a crypto Bitcoin exchange in Japan. You don't speak Japanese, right? I was like, okay, they have a point. So they said, why don't you sell this technology to other exchanges? Because most of the Japanese exchanges don't have very good technology. I was like, okay. So then I went to talk to a few of the exchanges, like literally two weeks later, we signed a contract with one of the, with one of the exchanges. And then they paid thirty, three hundred sixty thousand dollars for the, for the system. So they made a down payment of a hundred, a hundred eighty thousand dollars. That was enough for me not to pay salaries anymore. So I was happy with that. So we pivoted from a wanting to run a own Bitcoin exchange to exchange systems for provider.

• 39:36Chamath Palihapitiya?

  Yeah, you're selling software.

• 39:38Speaker 01

  We, we're selling software. And then in July 2015, a bunch of Chinese companies came to us saying they want systems for.

• 39:47Chamath Palihapitiya?

  Can I just say, by the way, sorry to interrupt you, but it's really incredible because there are so many founder stories. When somebody says, I've started a company and then somebody says, well, how much is it worth or how successful is it? And, you know, let's just say Binance is a two hundred billion dollar company.

• 40:02Speaker 01

  Probably less than that, but.

• 40:04Chamath Palihapitiya?

  It's in the neighborhood. A lot of people think that there is some incredible origin story that is like lightning in a bottle, but so often than not, the story is more yours, which is this it's kind of like moving along, meandering, learning things, trying some other things. This non-obvious iteration and then all of a sudden, things kind of catalyze, but even then, you still don't get the right form because you're licensing it really and people just misunderstand that this is actually more what entrepreneurship is. It's the resilience and the grit to just keep grinding.

• 40:39Speaker 01

  For sure, for sure. I think most, most people idealize like, you know, entrepreneurship, that they just hate it and they go from there.

• 40:46Chamath Palihapitiya?

  It's like the Facebook story. You hack it together in college and oh, it's now a million users.

• 40:50Speaker 01

  Facebook is, is Microsoft.

• 40:52Chamath Palihapitiya?

  Exactly.

• 40:53Speaker 01

  And also Google. These three are like, you know, college, grad, and they just.

• 40:57Chamath Palihapitiya?

  Exactly.

• 40:58Speaker 01

  Even then.

• 40:58Chamath Palihapitiya?

  But the reality, Binance or Tesla, it's like a grind.

• 41:01Speaker 01

  It's, it's a grind and it's.

• 41:02Chamath Palihapitiya?

  It's a grind.

• 41:03Speaker 01

  You have to like go so many different ways.

• 41:05Chamath Palihapitiya?

  Yeah.

• 41:05Speaker 01

  And it wasn't obvious from the beginning.

• 41:07Chamath Palihapitiya?

  Yeah.

• 41:07Speaker 01

  So I think those three are the exceptions that kind of just hit it from day one.

• 41:11Chamath Palihapitiya?

  Exactly.

• 41:12Speaker 01

  But then that kind of shaped the people's perception, but 99%, 99.9% of other successful businesses are not like that.

• 41:19Chamath Palihapitiya?

  Right.

• 41:19Speaker 01

  Right? So if you look at now, any other successful company, yeah, so the same, same here.

• 41:24Chamath Palihapitiya?

  So get us to the founding moment.

• 41:25Speaker 01

  Yeah, so we did.

• 41:26Chamath Palihapitiya?

  So you're licensing the software.

• 41:27Speaker 01

  We're licensing the software. We, that business went pretty well. So we've had like 30 different exchange clients.

• 41:32Chamath Palihapitiya?

  Wait, no way.

• 41:33Speaker 01

  Like over, over like.

• 41:34Chamath Palihapitiya?

  Over multiple years?

• 41:35Speaker 01

  Over two years. In two years, we signed up.

• 41:37Chamath Palihapitiya?

  Yeah, so this is a multimillion dollar.

• 41:39Speaker 01

  Oh, yeah, yeah.

• 41:39Chamath Palihapitiya?

  Licensing business.

• 41:40Speaker 01

  Yeah, so and it's a SaaS business, right? What we call exchange as a service business. So we charge a month, fixed monthly fee every month. And this is platform, business is paying us. It's a very steady business. Every new client, so every new client increases the, the revenue. So every new client is like a step up.

• 41:57Chamath Palihapitiya?

  Exactly.

• 41:57Speaker 01

  So it's a very, actually a very, very good business model. But then in March 2017, the Chinese government shut down most of our clients. And then, and then by May, we were like, okay.

• 42:08Chamath Palihapitiya?

  Right, and they don't touch you because you're the software vendor.

• 42:10Speaker 01

  We're the software vendor.

• 42:11Chamath Palihapitiya?

  Exactly.

• 42:11Speaker 01

  We don't run any business. So with a software vendor. So, but then our businesses, we don't, we have no clients, right? So we lost our clients. And so by May, we were like, okay, we need to pivot. But April, May, we were like, figure out how to pivot. By end of May, we was like, okay. Actually, three guys who worked for me said they want to do a Polonex copycat. Polonex was the biggest exchange back then. And then I said, let me invest. We have some extra cash. Three days later, they want to do some on-chain chat trading software. I was like, no, we're not going to invest in that anymore. And then I said, why don't we do that? We have the exchange system already. We still need to customize it to do a crypto-to-crypto-only trading.

• 42:50Chamath Palihapitiya?

  My gosh.

• 42:51Speaker 01

  So in May, we said, okay, we're going to do a crypto. We're going to do an exchange again. The teams are fine. Sure.

• 42:59Chamath Palihapitiya?

  How big is the team at this point?

• 43:01Speaker 01

  Twenty people. So and we had tech people. We don't have marketing because we're a to-be-business, right? We have two sales guys, two sales guys plus me.

• 43:11Speaker 01

  And then we said, well, now we can run our own. Let's do our own crypto-to-crypto exchange. So and then, so that was the end of May. And then June 1st to June 10th, there was a guy who was a BTC co-founder, Ling Ke. He ran an ICO in China. He raised 15 million US dollars in 10 days.

• 43:32Speaker 01

  And then I looked at him, I was like, I was like, he only had one document and one website. No product, nothing. He raised 15 million US dollars. If he can do that, I might be able to do that, too.

• 43:43Chamath Palihapitiya?

  You need adventure funding. You're like, if I get the 15 million dollars, I can build out a team. I can invest in some marketing. I can be in the J-curve and not feel the pressure.

• 43:51Speaker 01

  Exactly, yeah. So originally, we were going to go to the VC funding route, right? But then when I saw that, I was like, wow. And everyone talking about ICOs back then. I went to like, I went to a conference mid-June 2017, and everyone's talking about ICO. Everyone's like, CZ, you're going to do an ICO. You're going to do an ICO. So by mid-June, June 14th was the date. And then I said, okay, call the team, say that we're going to do an ICO. Write a white paper and then buy.

• 44:17Chamath Palihapitiya?

  And so did you have a name at that point, like in the Bitcoin community or in the crypto community, either in China or in Japan or somewhere?

• 44:23Speaker 01

  I had a little bit of a name, even working at Blockchain Info, quite a lot of people know me. Blockchain Info was the most popular platform back then.

• 44:30Chamath Palihapitiya?

  Right.

• 44:30Speaker 01

  And OK Coin was also like I was a CTO, I was quite, I was quite active on social media. I was also kind of managing their international markets, non-English speaking or non-Chinese speaking markets, because nobody else, I was the best English speaker on that team, even though my English is not that great. But so I had a little bit of a name. People know, people know me in the community.

• 44:52Chamath Palihapitiya?

  Because you needed a bit of a name or some kind of pedigree to actually do an ICO at the time.

• 44:56Speaker 01

  Yeah, yeah. So but this is a advantage of when you get involved early in the industry, like you go to a few conferences, like there's 200 people and you go to like, by the second time you go there, people know you.

• 45:05Chamath Palihapitiya?

  Right.

• 45:05Speaker 01

  But the third time, some people are like, oh, you know.

• 45:07Chamath Palihapitiya?

  You're the expert.

• 45:08Speaker 01

  Yeah, you're OG already. Right. So, so I had, I had, I had a bit of a reputation. So I thought that, well, Lin K is quite, the guy who did the ICO in China, he's quite well-known in China, but he's not known internationally. I have a little bit of both. I said, well, I can probably do an ICO and raise the same amount. So we did. And.

• 45:28Chamath Palihapitiya?

  So who were the buyers of the Binance ICO?

• 45:30Speaker 01

  To be honest, even to this day, I don't know.

• 45:32Chamath Palihapitiya?

  Even to this day, you don't know?

• 45:33Speaker 01

  Right. It's like, I think.

• 45:34Chamath Palihapitiya?

  But are they Chinese? Are they Japanese? Are they people from all around the world that kind of knew you? Was it that your white paper was really good?

• 45:42Speaker 01

  Okay. So I think in terms of demographics, probably like 80, the ICO purchasers were probably 80, 80 to 90% Chinese. And there were some like international guys who bought it. And I think the data shows that there was about 20,000 people who bought in the ICO.

• 45:56Chamath Palihapitiya?

  20,000 people?

• 45:57Speaker 01

  20,000 people. So, and this is like a brand new brand. Some people know me in the industry and that was it.

• 46:03Chamath Palihapitiya?

  So even though the exchanges were. Put out a business in China.

• 46:07Speaker 01

  Yeah.

• 46:07Chamath Palihapitiya?

  The ICO was allowed.

• 46:08Speaker 01

  No, the ICO wasn't banned back then.

• 46:10Chamath Palihapitiya?

  Wasn't banned?

• 46:11Speaker 01

  Yeah.

• 46:12Chamath Palihapitiya?

  It was not not allowed?

• 46:13Speaker 01

  It was not not allowed, yeah.

• 46:14Chamath Palihapitiya?

  Exactly.

• 46:15Speaker 01

  So let me, let me, let me just make one clarification. The exchange clients that we were serving were mostly stamp cultures exchanges, not crypto exchanges.

• 46:24Chamath Palihapitiya?

  Okay.

• 46:25Speaker 01

  Crypto exchange was not banned in March. Crypto exchange was banned after we started.

• 46:28Chamath Palihapitiya?

  I see.

• 46:29Speaker 01

  So that was in September. We're talking about like June, July, time frame in 2017.

• 46:33Chamath Palihapitiya?

  Wow, you're really threading a needle.

• 46:35Speaker 01

  Yeah, yeah, yeah. So we didn't know that that ban was coming. We just saw like, you know, those.

• 46:39Chamath Palihapitiya?

  How much of the company did you sell?

• 46:41Speaker 01

  No, we didn't have, we, we.

• 46:42Chamath Palihapitiya?

  It was just the coins.

• 46:43Speaker 01

  We launched a token.

• 46:43Chamath Palihapitiya?

  You had to do no equity participation.

• 46:45Speaker 01

  There's no, there's no equity, there's no equity involved. It was just, we launched a new token, BNB.

• 46:50Chamath Palihapitiya?

  Yeah.

• 46:50Speaker 01

  It's still there today.

• 46:51Chamath Palihapitiya?

  Yeah.

• 46:51Speaker 01

  And then we said, look, we're gonna sell, we're gonna sell 60% of it for $15 million, roughly. Right, so because we're talking Bitcoins.

• 46:59Chamath Palihapitiya?

  And what were the original tokenomics that you designed for the BNB token?

• 47:02Speaker 01

  Well, we said a bunch of things, but the main one that was gonna be live very quickly was gonna be, if you hold BNB, you receive 50% fee discounts when you trade on Binance, eventually the platform that gets launched. That was the main thing. But we also said, look, it's gonna be a, it's gonna have, eventually it's gonna have its own chain, its own decentralized ecosystem. That's like three or four things.

• 47:20Chamath Palihapitiya?

  So then you guys must have been ecstatic. You're like, wow, we raised 15 million bucks. We're now gonna launch this exchange. But then September comes around and then exchanges themselves were. So then what do you do?

• 47:31Speaker 01

  Yeah, September comes around, September 4th, like seven different departments of Chinese government issued a memo together saying that number one, crypto exchanges are no longer allowed in China. ICOs are no longer allowed, mining is not allowed, crypto mining. We said, well, we're gonna move, well, we said, we have to move. By then, it was clear that even while at the time China was one of the largest user base, they had like 30 something percent user base from China, but we still have like 70% from the rest of the world. We said, look, if we cut off that 30%, we can still survive. We can, we can, we actually survive pretty well.

• 48:05Chamath Palihapitiya?

  Yeah.

• 48:07Speaker 01

  So we said, well, I just said, look, let's move, let's move, let's move to Tokyo.

• 48:11Chamath Palihapitiya?

  Back to Tokyo.

• 48:12Speaker 01

  Back to Tokyo.

• 48:12Chamath Palihapitiya?

  You love Tokyo.

• 48:13Speaker 01

  I, I, I've been, I've been back in and out of Tokyo. I know it.

• 48:17Chamath Palihapitiya?

  And by the way, at that point, you speak Japanese as well?

• 48:19Speaker 01

  I speak very little Japanese. What would I call taxi Japanese?

• 48:22Chamath Palihapitiya?

  Taxi Japanese.

• 48:23Speaker 01

  I can say like, no, thank you, go left, go right. In a restaurant, when I order, I say, is this, this, this? Not the, not the full menu names.

• 48:30Chamath Palihapitiya?

  Yeah.

• 48:30Speaker 01

  Sushi, I can name most of them.

• 48:33Chamath Palihapitiya?

  Okay.

• 48:33Speaker 01

  Yeah, so that's my Japanese level. But you know, I know Japan, I know Tokyo. It wasn't, it's not like a new country for me, right? So I said like, let's move to Tokyo. And we had like thirty people then, right?

• 48:43Chamath Palihapitiya?

  And everybody moved?

• 48:44Speaker 01

  Everybody moved.

• 48:46Chamath Palihapitiya?

  Wow.

• 48:46Speaker 01

  Back then, eight years ago, I think very, like maybe one or two of the people were married and nobody had kids. So it was like a very easy move for the team.

• 48:56Chamath Palihapitiya?

  Yeah.

• 48:57Speaker 01

  So everybody just packed up and moved. I remember one girl cried, one product manager. She cried because her boyfriend is in, is in China. So she cried, but she moved with us. And she's not married to her boyfriend, so anyway.

• 49:10Chamath Palihapitiya?

  Incredible.

• 49:11Speaker 01

  So, yeah, so we moved to Tokyo like when China did that. And our platform continued to grow, yeah.

• 49:18Chamath Palihapitiya?

  So when you first launched Binance, was it an instant hit? Or did it take energy to find that product market fit? That first few zealous users that would tell everybody else? Like, how did the virality start? How did the liquidity really get built?

• 49:31Speaker 01

  So Binance, I would say the product was growing pretty well, but the token price went down from ICO price. It went down thirty, forty percent. It took about three weeks to recover. So when we launched the product, because at that time crypto is still pretty hot, I think the product market fit was there. It wasn't a new idea. It's just a crypto to crypto exchange.

• 49:52Chamath Palihapitiya?

  So then the ICO was critical then, right? Because these people say, well, I own this token. Now I can trade at a fee discount.

• 49:58Speaker 01

  Yeah.

• 49:58Chamath Palihapitiya?

  So that's why I'm going to choose Binance.

• 50:01Speaker 01

  Yeah.

• 50:01Chamath Palihapitiya?

  But was it also architected better? Was it materially faster or more reliable?

• 50:06Speaker 01

  Yeah, for sure.

• 50:07Chamath Palihapitiya?

  It was?

• 50:07Speaker 01

  It was. So back then, when we launched, even using your eyeballs, you can see that placing an order on Binance is so much faster than on a competing platform. And so the performance of the exchange system was.

• 50:19Chamath Palihapitiya?

  And back then, twenty seventeen, who were the big platforms that you were competing with?

• 50:22Speaker 01

  Those Polonex, Bitrex were the biggest ones. And then there's a few Chinese ones, those Hobi, OKX, OK Coin back then. And then in the Western world Coinbase was there.

• 50:33Speaker 01

  Gemini wasn't there back then. Gemini was later. So Bitstamp was there. Bitfinex was there. Now they're kind of really, really small.

• 50:42Chamath Palihapitiya?

  So you're now in your late thirties.

• 50:44Speaker 01

  Yeah, yeah.

• 50:44Chamath Palihapitiya?

  And this thing is working.

• 50:46Speaker 01

  Forties now.

• 50:47Chamath Palihapitiya?

  Forties, sorry, forties. How did you internalize the success? You're like.

• 50:53Speaker 01

  What is this? Like, what's happening? Like, are you saying that to yourself? Yeah, there were some really surreal moments where you were like, is this real? Yeah. In a good way. So like, how, like, what's our revenue? She, I forgot the number, but she said like a couple, a couple hundred Bitcoins. It's like, that's crazy. We can't be making them. Like, are you sure? She's like, yeah, we're sure. Like, this number can be correct. We must be off by like a magnitude. And we double-checked, double-checked, triple-checked, like, it's correct. It was like, that's crazy. And then there was also a period where, three weeks in, when the BNB price was recovering. So, BNB ICOed at like about 10 cents. It dropped to like 0.0, uh, dropped to 6 cents. And then, uh, He Yi joined, we announced He Yi joining.

• 51:36Speaker 01

  And then for the next two, three weeks, um, every time I, you know, you go to sleep, you wake up, the token is up 20%. You go to a meeting, come up, the token is up 20%. You go to the bathroom, come back, the token is up 20%. I mean, it must have been very quick where you're like, wait a minute, I'm rich. That came a little bit later. That came in early 2018, about six, seven, seven, eight months in. Forbes put me on the cover. That's when, like, well, I said, well... How did they even know to find you at that time to put you on the cover? I actually don't know, but Forbes was doing a crypto addition. I see. So with all the crypto guys. And then they already had a picture of Vitalik doing a fancy hand gesture, which is really cool picture.

• 52:17Speaker 01

  So, um, yeah, so, uh, yeah, so they, they invited us, they, they contacted our PR department, which maintains contact with them. Which was really He Yi's team back then, um, like, team of four or five girls. And He Yi says, like, well, Forbes want to do a special feature with you and take some photos. I think you should go. I was like, I don't want to go, but they said, we're a new brand. Forbes can still help us, you know, uh, increase the brand. With awareness, yeah. Yeah, yeah. So I said, okay, fine, I'll go. So I went to do the photo shoot. That was like my first photo, like, to put makeup on me. And then the first time, put it makeup. CZ, what is, what is money?

• 52:53Chamath Palihapitiya?

  Well, is it important? I mean, don't take this wrong way, but you got rich old.

• 52:58Speaker 01

  Yeah, yeah.

• 52:59Chamath Palihapitiya?

  So did it matter at that point? What is money when you're in your 40s and you make it?

• 53:02Speaker 01

  It still matter, but money is not everything. I think I was old enough that there's a couple of things that happened to me. Number one is I was older, so I'm 40 something. So I'm not like a young 20 year old that just, you know, Lambos, big parties. Too old for that. So I have also my personality is quite stable. So I don't get too excited on things. Also, the other thing, not to brag, but I went from like a barely financially free to like, you know, cover Forbes. And I was like, wait a second, like, how rich am I? I don't even know. I don't like, when I look at my wallet, nothing changed. The Forbes cover, nothing changed for me. But then people say, look, now you might be a billionaire. I was like, am I really a billionaire? Like, it doesn't feel that way.

• 53:42Speaker 01

  I was like, even like a month ago, like, not a month, like, at that time, when, when we fled, well, when we left China to go to Japan, I booked the economy classes for a red eye flight. And He was like, no, maybe we should upgrade to a business class so we can lay down and sleep. Okay, that makes sense. That's, you know. So like, I have those kind of habits. So when you make money successively, like, you know, you from one, from the one million, you become 10 million. You might want to buy some fancy cars from to 100 million. You might want to buy, you know, some yacht or something to a billion. Then you have, I didn't go through that stepwise process. I just went from like a relatively okay kind of thing to like, you're on the cover of Forbes. So, and so I didn't develop quite a lot of those habits.

• 54:25Chamath Palihapitiya?

  What does it mean now? Now, I mean, depending on the day, you're a Deca billionaire or a Centi billionaire. What does it all mean?

• 54:34Speaker 01

  It doesn't mean very much to me. I think money is two things. Number one, you have to take care of yourself. You have to have food, shelter, you know.

• 54:41Chamath Palihapitiya?

  Which is very minimal amount of money.

• 54:43Speaker 01

  Which is very minimal, like, you don't need that much for that.

• 54:45Chamath Palihapitiya?

  People can confuse themselves and create all kinds of complexity, but it doesn't take much.

• 54:48Speaker 01

  It doesn't take much. So that I for sure have. So I have, I have a very, I don't have a luxury life, but I have a very comfortable life, I think. And then the other-

• 54:58Chamath Palihapitiya?

  So what does that mean?

• 54:59Speaker 01

  If you look at my house, my house, like the living room water leaks every month or so because the the house is too so old. But that's the house that has that's the right size for me at right now. No, it's not a we'll just fix it whenever it leaks. So that has that still happens like that happened a month ago. So like people think I live in a very fancy house, you know, this other crazes. I live in a decent sized house, but you know, it fits all my family members. But it's not a it's an old house that I bought third or fourth hand. But it's it's it's in the right location. It works for me. It's in the right location. It's functional. Things break once in a while. It's fine.

• 55:34Chamath Palihapitiya?

  Would you say it's because you're practical? Or is it just because you're just not moved by?

• 55:41Speaker 01

  I'm function driven.

• 55:42Chamath Palihapitiya?

  You're function driven.

• 55:42Speaker 01

  If it functions, I'm OK. I don't care about the fanciness. I don't care about style. I don't care about colors. I don't care about gliding gold and it's a functional. I'm OK.

• 55:51Chamath Palihapitiya?

  Right.

• 55:52Speaker 01

  So if it if it solves the problem, I'm good.

• 55:54Chamath Palihapitiya?

  Do you ever have bouts of insecurity?

• 55:59Speaker 01

  Not really. I'm I know my weaknesses, so I'm and I learned to deal with it. So I'm not I hope I'm not super arrogant. So I don't think I'm arrogant.

• 56:10Chamath Palihapitiya?

  I've only gotten to know you in the last couple of years.

• 56:12Speaker 01

  Yeah.

• 56:13Chamath Palihapitiya?

  I saw videos of you, I think it was in the late teens, early 2000s. And my immediate reaction, because that's always been my struggle, is sort of these bouts of insecurity or ego. I thought, man, this guy is really calm.

• 56:27Speaker 01

  Yeah, I'm calm.

• 56:29Chamath Palihapitiya?

  Yeah.

• 56:29Speaker 01

  So I describe this with-

• 56:31Chamath Palihapitiya?

  You're very well regulated, very self aware, it seems.

• 56:34Speaker 01

  Yeah, other people's emotions may go like this, like happy, sad, had. I'll feel happy, sad, happy, sad, but my amplitude-

• 56:40Chamath Palihapitiya?

  Your amplitude is very moderated.

• 56:42Speaker 01

  Is narrow. Yeah.

• 56:43Chamath Palihapitiya?

  Right.

• 56:44Speaker 01

  Yeah, so that's-

• 56:44Chamath Palihapitiya?

  So it just allows you to manage in many ways. I mean, success is somewhat illusory. If you're like working on a problem, nobody knows the toil.

• 56:52Speaker 01

  Yeah, yeah, yeah.

• 56:53Chamath Palihapitiya?

  And nobody really wants to hear about the toil. They want to have a very simple way of pointing to something and say, oh, wow, look at what you have. But if you're working and you have no time to enjoy it, nobody understands that.

• 57:03Speaker 01

  Yeah, yeah, yeah, yeah.

• 57:04Chamath Palihapitiya?

  OK, so you launched this thing. It's going bananas. But there were some hiccups.

• 57:09Speaker 01

  Yep.

• 57:09Chamath Palihapitiya?

  Do you think that you-

• 57:13Chamath Palihapitiya?

  Got too addicted to the growth at any point?

• 57:16Speaker 01

  I wouldn't say I was addicted to the growth, but I was addicted to the work. The work was actually very satisfying, very rewarding.

• 57:23Chamath Palihapitiya?

  And what was the average day for you? What were you trying to do?

• 57:26Speaker 01

  I was basically doing like 20 plus meetings a day, like scheduled calls or meetings, and then plus other random stuff, and then having to respond to people on Twitter and stuff. So, but it was very rewarding because it's, there's a sense of fulfillment that is very hard to describe. It's not the money, it's not the growth.

• 57:44Chamath Palihapitiya?

  Yeah.

• 57:45Speaker 01

  It's, you know.

• 57:46Chamath Palihapitiya?

  Yeah, what was it? When you were running Binance, I don't know if you do this, but some, sometimes people fixate on the leading indicator. Like revenue is a lagging indicator, right? Revenue and profits are just, they're here. That's from six months ago, a year ago.

• 58:01Speaker 01

  Yeah.

• 58:02Chamath Palihapitiya?

  Manifest today. What was your leading indicators? What were the north stars that you really cared about that said, this is the health of the system?

• 58:09Speaker 01

  Yeah, yeah. I think it's really daily active users. It's not trading volume, it's not revenue.

• 58:13Chamath Palihapitiya?

  Why Dow versus those other things?

• 58:15Speaker 01

  I think as long as you keep helping, serving more users, then you're giving them value. So I believe a product is valuable when people want to use it. So the more people who wants to use it, even if your revenue is zero, you have, you have value. So any product that people use, the more people use it, the higher value, right? So that's kind of always my philosophy. Whereas you can optimize for revenue, you can optimize for profit in short term, and you can lose the long-term growth. But I believe long-term, if you have a large number of people using your platform, that's where you create value, not just for yourself, you also create value for your users. People choose to use you because there's a value in using you, right? So that's kind of my, my north star.

• 58:56Speaker 01

  And also knowing that, related to that was knowing that hundreds of millions of people are using us, we help them, right? So the way I view is if they pay like, you know, a commission fee, then they're willing to pay because we must have given them some higher value.

• 59:10Chamath Palihapitiya?

  One of the double-edged sword of the Dow is that some of those Dow are...

• 59:18Chamath Palihapitiya?

  Bad actors.

• 59:19Speaker 01

  Yep.

• 59:20Chamath Palihapitiya?

  When was the first inkling that you had that that may be a problem and that you have to take that seriously?

• 59:27Speaker 01

  It was like, I think.

• 59:28Chamath Palihapitiya?

  What did that first meeting look like where they're like, CZ have good news and bad news?

• 59:32Speaker 01

  Yeah, yeah, yeah. I, there's actually a very clear point. I think it was like Christmas Day, January 1st, or like New Year Day, January 1st, 2018. So this is like six, five months after, you know, we were kind of large, or five months after we started and we're kind of, we were number one exchange already. On that New Year's Eve, December 31 ish, 2017, a US Homeland Security guy reached out to me. His name, I think, is Joseph. I always remember his name was Patrick or Joseph. I'm not sure which one.

• 1:00:00Chamath Palihapitiya?

  Okay.

• 1:00:02Speaker 01

  He wrote an email and then I got the email and said like, well, he wants to, he wants our help to help track some hackers who may have moved funds of the Ether Delta hack. Ether Delta was a decentralized exchange back in 2017. They got hacked, that went down. So this guy who works for the US government emailed us and I didn't know how to deal with it. Nobody on our team knows how to deal with law enforcement. So I got a couple of guys to huddle together, say, well, how do we help this guy? And then we gave the information that he requested. We verified, first of all, we had to verify who he was. And then, and then afterwards, he thanked us. And then I said, hey, Joseph, can you recommend somebody that we could hire that can interface with law enforcement in the future?

• 1:00:45Speaker 01

  He recommended someone, but the guy was based in the US and we don't have a US entity. We couldn't hire anybody in the US back then, so we kind of had to let that go. But that was the point. It was like New Year's Day.

• 1:00:56Chamath Palihapitiya?

  Where you're like, this is gonna happen more.

• 1:00:59Speaker 01

  Obviously.

• 1:01:00Chamath Palihapitiya?

  Invariably. Law of large numbers.

• 1:01:01Speaker 01

  Yeah, yeah, yeah. So that's the day when I realized, look, we need to, we need, we need to have somebody who has experience working with law enforcement.

• 1:01:07Chamath Palihapitiya?

  And so what did you do?

• 1:01:09Speaker 01

  So we eventually hired, we hired more guys.

• 1:01:11Chamath Palihapitiya?

  Okay.

• 1:01:12Speaker 01

  Yeah.

• 1:01:12Chamath Palihapitiya?

  Obviously, like, you're not looking at the transactions, so you wouldn't know. But if we fast forward a little bit, the claims that then the US government under President Biden made at you.

• 1:01:25Chamath Palihapitiya?

  Was essentially that people like Hamas or people like other organizations were using Binance and you didn't do enough.

• 1:01:33Speaker 01

  Yeah, so on this point, I may have some legal restrictions on what I can say and cannot say about the plea, the etc. So I'm not a lawyer, but I try to stay very clear from that. But overall, though, I would just say the Biden administration overall is quite hostile to crypto. I mean, they openly announced war on crypto.

• 1:01:51Chamath Palihapitiya?

  Yeah.

• 1:01:51Speaker 01

  Right, so it's good to see this new administration change 180 degrees. I think this is good for America.

• 1:01:57Chamath Palihapitiya?

  Yeah.

• 1:01:57Speaker 01

  This is good for the world.

• 1:01:58Chamath Palihapitiya?

  Yeah.

• 1:01:59Speaker 01

  So I think it was, I wouldn't blame the previous administration, but I think they just didn't understand.

• 1:02:04Chamath Palihapitiya?

  Why do you think that they were so hostile to it?

• 1:02:06Speaker 01

  It's fear of the new. It's as simple as that. I think they, probably in their heads, there's some degree of, let's not disrupt the current financial system, the banks, whoever else. There's probably a lot of lobbying from those industries as well to them so that kind of brainwash or affect the thinking, however you call it.

• 1:02:25Chamath Palihapitiya?

  Yeah.

• 1:02:26Speaker 01

  So that's human nature. I mean, if you think about it, it's understandable. It's not ideal, but it's understandable.

• 1:02:32Chamath Palihapitiya?

  So you're running the exchange. Things are going well from 2018, 2019, 2020. It's kind of like you're really coming into your own.

• 1:02:41Speaker 01

  Yeah, yeah, yeah.

• 1:02:42Chamath Palihapitiya?

  You eventually opened a US entity.

• 1:02:44Speaker 01

  Yeah, in 2019, yeah.

• 1:02:46Chamath Palihapitiya?

  And why did you feel the need to do that?

• 1:02:47Speaker 01

  So 2019, there was some news about US governments, basically, in my layman words, chasing Big Macs. There was some Big Macs in the news. There were some also Bitfinex stuff in the news. I think the US government frozen, froze, or at least the Poland government froze like 600 to 800 million dollars of their assets when their market cap was only like 4 billion. That's like a large chunk. And then they got sued later on by the US government saying that they don't have enough reserves.

• 1:03:12Chamath Palihapitiya?

  Yeah.

• 1:03:13Speaker 01

  So we saw those news and we're like, okay, well, the US government is looking at this industry and we better register. And, you know, again, I asked my friends, many of them have legal backgrounds, and then they sort of general consensus was, okay, we should operate in a registered fashion in the US. So this is 2019. So we registered Binance US and it's a separate entities. It's a separate deployment. It's a separate matching engine, separate liquidity. So and Binance US has been regulated from day one.

• 1:03:45Chamath Palihapitiya?

  Yeah. 2019, 2020, 2021. Things are just generally working.

• 1:03:50Speaker 01

  Generally, generally, yeah, yeah.

• 1:03:52Chamath Palihapitiya?

  Then you start to see. Some of these other folks start to pick up steam. SBF and FTX start to really... Tell me about that.

• 1:04:03Chamath Palihapitiya?

  How did you meet him? Because you ended up owning a lot of the equity.

• 1:04:06Speaker 01

  Yeah, yeah. So, well, we invested in them only 20% equity at some point. And then we exited a year later.

• 1:04:13Chamath Palihapitiya?

  Yeah.

• 1:04:13Speaker 01

  We didn't stay there for very long. I think I first met him in January 2019. He involved the Singapore conferences Binance organized. I think at the time, FTX did not exist. Sam Bankman-Fried, SBF, was running Alameda. And they hosted an after-party in the Singapore Aquarium on Santos. And they had divers in the fish tank, you know, holding a sign, etc. So they were like a VIP client, they were like a large trader on Binance. So we were friendly to them.

• 1:04:45Chamath Palihapitiya?

  Yeah, right.

• 1:04:46Speaker 01

  Yeah, that was in January 2019. And then a couple of months later, they came to us saying like they want to start a futures platform. They proposed a futures platform, some kind of a JV. I can't remember exactly, but I think they proposed 60/40 in our favor. We want, I thought about countering, like we had all the users. They don't have anything back then. I thought about counter proposing like 95/5, but I don't think that was very polite. They're still like a trader, they're still like a VIP client.

• 1:05:12Chamath Palihapitiya?

  Yeah.

• 1:05:13Speaker 01

  So we declined that. We said no.

• 1:05:15Chamath Palihapitiya?

  Because they were a crucial part of the liquidity pool.

• 1:05:18Speaker 01

  Not a crucial part, they're a large trader, but you know, Binance, they were new too. It wasn't like they were there for like many years.

• 1:05:25Chamath Palihapitiya?

  Okay.

• 1:05:25Speaker 01

  They were only there for like, you know, probably six months or a year. I don't know the exact dates. And then a little bit later, they came back with a better offer and said, look, we all... Like in summer, they came back with a better offer. We still said no. And then in November, they came back, said, okay, look, we're going to offer you this really, really attractive offer. But then FTX was launched. At some volume, they said, look, we're going to basically give you 20% at this price. And there was a swap of tokens, BNB versus FTT tokens. So that's, we got some initial FTT tokens. At the time, BNB tokens are much more liquid and FTT tokens are less liquid. So we done that deal. And then almost as soon as we did that deal, I keep hearing from my friends, like, you know,

• 1:06:10Speaker 01

  SBF badmouthing us in the Washington circles in the US, etc. I was like, come on. And then they also did some other stuff, which is kind of annoying. They they pay five times salary of to our VIP account managers that had access to our VIP database. And then so that girl goes goes working for we if we match that girl, then we have to do five X everybody. So it was like, OK, you go work for them. And then the day after the girl works for them, our VIP client gets called saying, look, they're going to get a better rate on FTX, etc. I'm like, so I called Sam and said, like, can you stop doing this? We're like, we're your shareholder. At the same time, he's like, look, see the like, can we do a one to one panel on a crypto event, right?

• 1:06:54Speaker 01

  So I'm fine. And we're an investor. We want to help promote. I actually want multiple exchanges to be successful in the industry because then we won't be the ones that get targeted all the time.

• 1:07:05Chamath Palihapitiya?

  Yeah.

• 1:07:06Speaker 01

  But there was always like, no, I always keep hearing there was some bad mouthing, some other this and that. So a year later, I think it was mid early 2021, we said, and they were they were claiming to be like raising money at, you know, 32 billion evaluations. We're like, wow, why don't we exit? Actually, so in our investment clause, we had veto rights on any future rounds, right? So if we want to block them, we could. I didn't want to use that to block them.

• 1:07:34Chamath Palihapitiya?

  Oh, wow.

• 1:07:35Speaker 01

  So I was like, no, even if why don't we just exit and we can compete, right? So and then we thought we talked about exit and then we exited. I think if I remember correctly, it was in July, the deal was finalized and the transfer was done in July 2021. And this is like a full a full year and a half before they had issues at the time. We didn't know.

• 1:07:56Chamath Palihapitiya?

  Right, because there was some rumors that a lot of their issues started after you sold and they were somehow conjoined. I'm sure you've heard of that, but you can put all of that to bed.

• 1:08:07Speaker 01

  Yeah, so that's categorically not true. And also because of the competitive nature in the businesses, even though we're a shareholder, I never really I never asked them for financial statements.

• 1:08:16Chamath Palihapitiya?

  Oh, wow.

• 1:08:16Speaker 01

  So I just, no, I just didn't ask for it. I'm a very passive investor, so when I invest, I don't get involved in their business.

• 1:08:23Chamath Palihapitiya?

  Yeah.

• 1:08:23Speaker 01

  And they also they're slightly competitive. We had a futures platform. They have a futures platform. So I try to stay, no, let them do their thing.

• 1:08:31Chamath Palihapitiya?

  So post this, the thing with the FTX thing that most people talk about are a couple of things. One was The way in which the restitution happened was suboptimal to some of the holders of FTX, people who had cash money there. The other thing that people talk about is the value of some of these investments post. What do you think in the aftermath of all of this? It says anything at all about the industry or crypto in general?

• 1:09:02Speaker 01

  Yeah, I don't understand the whole bankruptcy process, whether that's fair or not. I read a lot of different things online. Also, just to be transparent, there's an ongoing lawsuit between the state and us. They want to try to claw back some of the money that we got like a year and a half before.

• 1:09:18Chamath Palihapitiya?

  Right.

• 1:09:18Speaker 01

  So there's probably limited stuff I can comment on that. Yeah, but again, I'm not an expert there, but I did hear some complaints about, you know, some Chinese users are not eligible, et cetera, et cetera. But now, from what I read is the, because of the appreciation of crypto, now in US dollar terms, they have enough. Even though if people helped crypto back then, they probably have gotten more. I don't know what the deal is.

• 1:09:42Chamath Palihapitiya?

  When did things at Binance start to get complicated for you?

• 1:09:48Speaker 01

  You mean with the US governments, right?

• 1:09:50Chamath Palihapitiya?

  Yeah.

• 1:09:50Speaker 01

  For me, like, they started asking for information, the information request, which we always comply, right? So that was like 2021, 2022-ish. And it was like, late 2022, it was getting more hostile. And then I think in early 2023, it was more clear that they were making, they were, we had to reach a deal of some kind, or they're going to indict us, or stuff like that. There was like, it became negotiations.

• 1:10:17Chamath Palihapitiya?

  How do you deal with that as a person? Do you think, I can't believe this is happening? Like, when you're in this meeting and your lawyers or whoever it is are telling you, hey CZ, I think there's going to be an indictment. I don't, how does that meeting go?

• 1:10:30Speaker 01

  Number one, I'm not a legal background, so I had to rely on a lot of other people's advice. That's generally the harder part for me because I don't have experience there. Like, no one has experience going through this. You go through this once, you never want to touch it again. Right? So no one really, on the receiving end, have any experience. You have a bunch of lawyers and the lawyers are... The lawyers, I think, are good, but how you organize lawyers actually is quite tricky. If you hire a bunch of expensive lawyers, they all have different specialties and they all have different opinions.

• 1:10:58Chamath Palihapitiya?

  And they all want to seem like the smartest person that's driving the decision.

• 1:11:01Speaker 01

  And also, they all want to take a lot of time to analyze. They get paid by more time they spend. I'm not saying that they're unethical, they want to do a really good job. But then they go in all kind of different tangents. So you get dragged in a lot of different places. That was the most troublesome part for me. If somebody told me like, look, this are the three things you got to focus on, this is, you know, you got to... This strategy. We also didn't have a strong legal team. Our team is young. We're... Our legal team didn't have this type of experience dealing with this type of issues. So that was always tricky. But I kind of look at... When I come...

• 1:11:36Chamath Palihapitiya?

  By the way, where was the entire team at this point? Still?

• 1:11:39Speaker 01

  This... We're all spread out.

• 1:11:40Chamath Palihapitiya?

  Now you're everywhere.

• 1:11:41Speaker 01

  Now we're everywhere, we're spread out. And I think 2023, I was in Dubai. I was in Abu Dhabi, Dubai, splitting time. So, yeah, it was very stressful. But the way I deal with stress is I just look at the best and worst case scenarios. Right? So I asked the team, what's the best case scenario? Okay, you pay a fine, you get a, you know, you get a DPA or then this thing's over, then... Okay, so that's the best case. And then the worst case is, okay, so they were going to ask you to... They're going to try to put you in jail. Stuff like that.

• 1:12:12Chamath Palihapitiya?

  Was that the worst case, though? Because at the time, it seemed like the fact pattern was folks would get some sort of probation or...

• 1:12:19Speaker 01

  That would be the worst, worst case. But also, yeah, so for me, nobody got put in jail. But they could ask for it.

• 1:12:25Chamath Palihapitiya?

  Yeah, right, right, right.

• 1:12:26Speaker 01

  There's actually another worst case, which is you fight it. And then you're, if you can't agree on a term, you fight it and you stay in the UAE, which is a non-extradition country. And you know, and now you have citizenship. And so they, there's almost zero chance you'll get extradited. But then your travel is going to be limited. Anytime if you cross to a different country, even if that country is a non-extradition country, it can still be a chance that there's a deal being made, right? It's kind of leaving fear.

• 1:12:53Chamath Palihapitiya?

  Plus, it also creates complexity just at government to government level if folks are allies and it just, it just creates a lot of noise.

• 1:13:00Speaker 01

  It creates a lot of noise. It also creates a lot of pressure for the UAE government potentially. I don't want to trouble people who gave me a citizenship. I don't want to be the trouble causer.

• 1:13:09Chamath Palihapitiya?

  Right.

• 1:13:09Speaker 01

  Right? So, and so, but you know, there are, the worst case scenario is like, you know, you don't go there, they indict you and they put you on the red notice list, stuff like that, right? So that, those, no, those are potential possibilities.

• 1:13:23Chamath Palihapitiya?

  Yeah. So how did you resolve it?

• 1:13:25Speaker 01

  It took like the negotiations, like was basically daily call with like 12, 20 lawyers on call for like more than a year.

• 1:13:33Chamath Palihapitiya?

  More than a year?

• 1:13:34Speaker 01

  More than a year.

• 1:13:35Chamath Palihapitiya?

  A back and forth with the President Biden DOJ?

• 1:13:37Speaker 01

  The President Biden DOJ. And, and the most common thing I hear from my lawyers is we have never seen them this hostile on a case like this, right? We have never seen this before. And this is this, like, that's the most common phrase I've heard.

• 1:13:49Chamath Palihapitiya?

  At some point, you just become desensitized to it? Or do you keep internalizing it, personalizing it? You think, why is this happening to me? No resentment or just more? How did you deal with it? I'm just.

• 1:13:59Speaker 01

  It takes, it takes successive steps. And there were a couple of steps which are really hard to take. The step where you say, look, in the negotiations, right? They come to a few points where you say, look, we're just going to have to say no. And it's like, look, we just can't agree to that deal. They wouldn't back off and I couldn't agree to that deal, just have to say no. And then there was a couple of weeks that elapsed. You don't know what's going to happen.

• 1:14:22Chamath Palihapitiya?

  Purgatory.

• 1:14:23Speaker 01

  So you could get indicted. They can indict you any moment, right? So that's their choice. You already said no to that. There were like a couple periods like that. And then in those, in those couple of weeks, you're like, you're mentally thinking, okay, I can't travel anywhere. So I might have to get used to this life of just living in one country and be very careful, et cetera. There might be some sealed indictment that's not public at any border that you cross. And interestingly, they come back after two weeks and they say, okay, we can negotiate again.

• 1:14:54Chamath Palihapitiya?

  And then you're like, what do you think is happening over there?

• 1:14:57Speaker 01

  Well, no, I think that's a now, looking back, that's a very, that's a very useful negotiation tactic. For me, or for anybody in my situation.

• 1:15:05Chamath Palihapitiya?

  The silence.

• 1:15:06Speaker 01

  Yeah, the silence. For anybody who's going through this on the receiving end, you only go through this once. You're not experienced. This is your life. I mean, there could be a red sealed red notice against you. And this is the life they have to deal with going forever. And they don't like this thing. These things can stay there for like decades. For them, they do this every day. This is like, this is their daily job. Right? So, and but they, I think they're smart enough that they know two weeks is about the optimum time. Because longer than that, you really get used to it. And when they come back to negotiate, you're gonna say no. Right? It's like, look, I'm already used to this. Ah, so if you leave the guy in the situation for too long. So they're very skilled in this type of mental work.

• 1:15:46Chamath Palihapitiya?

  Right.

• 1:15:47Speaker 01

  Whereas, yeah, so there were some really tough periods. And for this type of stuff, you don't get used to it. You, it's mentally challenging.

• 1:15:54Chamath Palihapitiya?

  How did you get yourself to a place to agree to the final terms?

• 1:16:00Speaker 01

  After a lot of negotiations, we're like, okay, basically said, okay, I validated the single, single charge of a banking secrecy violation, which is a registration failure, which is a federal crime. It's serious. But no one went to jail for this in history. And there's no, there's no.

• 1:16:16Chamath Palihapitiya?

  Sorry, that charge, that's more technical. How does that relate to the perception of what was in the media, at least in America, which is money laundering and aiding and abetting folks and not doing KYC and not doing AML versus the actual charge? Are those two things connected and they're equal? Or these are sort of disjointed? The perception versus the actual specifics?

• 1:16:38Speaker 01

  Sure. I can try to explain my understanding. I'm not a lawyer, so I want to make a small disclaimer here. This is my layman understanding, could be wrong. There's a first, my understanding is there's a first level is like Banking Secrecy Act violation, which is a failure to register. Basically, you serviced, we serviced US users without registering as a financial services company in the US.

• 1:16:56Chamath Palihapitiya?

  So that's a you thing. That has nothing to do with the user themselves doing anything nefarious or bad.

• 1:17:00Speaker 01

  No.

• 1:17:00Chamath Palihapitiya?

  You did not register with the proper authorities to say, I'm going to take on US customers.

• 1:17:05Speaker 01

  And so that's number one, right? So that's the, that's the kind of base layer.

• 1:17:08Chamath Palihapitiya?

  Okay.

• 1:17:09Speaker 01

  On top of that, you can say, look, you didn't have adequate KYC AML procedures. So your, all your procedures are not strong enough. So, so that's another, that's another level, which even, even if you're not registered, you're also supposed to have KYC, et cetera, AML procedures. And those things are not, and those things, people think that's a black and white thing. In reality, it's not. It's how well you do it. Which systems do you use? What, how do you do?

• 1:17:35Chamath Palihapitiya?

  How many people do you have? What's your standard operating procedures? Yeah.

• 1:17:39Speaker 01

  Yeah, so there's actually a lot of details. And then, like, quite a bit above that, in my understanding, is if you have somehow known and facilitated bad transactions. So you can have a weak AML program and that didn't catch all the bad players, but you don't know that.

• 1:17:55Chamath Palihapitiya?

  Right.

• 1:17:55Speaker 01

  So it's not like you intentionally facilitating.

• 1:17:57Chamath Palihapitiya?

  It's not robust.

• 1:17:58Speaker 01

  It's not robust.

• 1:17:59Chamath Palihapitiya?

  It's relatively naive.

• 1:18:00Speaker 01

  Yeah.

• 1:18:00Chamath Palihapitiya?

  But it's there.

• 1:18:01Speaker 01

  Yeah.

• 1:18:02Chamath Palihapitiya?

  Versus this is, I know this to be bad and I'm enabling it to happen regardless.

• 1:18:07Speaker 01

  Yeah.

• 1:18:07Chamath Palihapitiya?

  Right.

• 1:18:08Speaker 01

  And then the next level, which you personally handling the transactions.

• 1:18:10Chamath Palihapitiya?

  Right.

• 1:18:11Speaker 01

  Right, so which is, you know, Charlie, Charlie Stram handled transactions for Silk Road, for Ross, right? So that's how, no. So there's different levels. I don't handle any transactions at all myself. That's just not my thing. I just don't do it. And so they said, okay, business, number one, we didn't register, KYC AML is weak. So that, those are things we can, fine, we can agree on that.

• 1:18:33Chamath Palihapitiya?

  Layer one, layer two.

• 1:18:34Speaker 01

  Yeah, so we can agree on that. For those single charges, without any other additional stuff, no one ever went to jail in US history, even till today. Right, so, and then the government, we couldn't agree on the two addition, the government wanted to add two additional charges, they call enhancements.

• 1:18:49Chamath Palihapitiya?

  The three and four.

• 1:18:50Speaker 01

  The three and four. They said somehow I personally facilitated, but they couldn't provide any evidence. They were trying to lean on the company, somehow something happened in the company, you know, et cetera. They were trying to use.

• 1:18:59Chamath Palihapitiya?

  Were they able to point to a transaction or some?

• 1:19:01Speaker 01

  No, they wasn't. So these two enhancements, the court outright rejected, but we decided to, we, before I went to the US, we said, we agreed that we will argue that in court. Right. And also based on, I don't want to get into the sort of privileged conversations, but like the understanding I went before I went was no one went to jail. The worst guy who got punished was Arthur Hayes of BitMax. He got six months of home confinement for BitMax. And when I look at that case, he had much more direct interactions with clients. Whereas I had much less direction. Basically, I don't deal with clients at Binance. I deal with users on Twitter, but not like, you know, Binance backend kind of thing. So I felt pretty confident that, you know, we should be in a fairly strong position, and that's the best thing forward.

• 1:19:46Chamath Palihapitiya?

  Right. So you're like, we agree with this. We agree with this. We're going to really debate this in court. Layers three and four. I'm going to come to the US.

• 1:19:54Speaker 01

  Yeah.

• 1:19:54Chamath Palihapitiya?

  And we're going to hash it out in court.

• 1:19:56Speaker 01

  Yeah.

• 1:19:56Chamath Palihapitiya?

  So you land in America.

• 1:19:58Speaker 01

  Yeah.

• 1:19:58Chamath Palihapitiya?

  You go into the courtroom.

• 1:19:59Speaker 01

  Yeah.

• 1:20:00Chamath Palihapitiya?

  You start this process. What happens?

• 1:20:02Speaker 01

  So, yeah, there was quite a lot of details there. First of all, the first, like, the first day, you go and plea, right? So the plea, the agreement is already like debated.

• 1:20:11Chamath Palihapitiya?

  By the way, sorry. And where, you're staying in a hotel?

• 1:20:14Speaker 01

  I was staying in a hotel, yeah. I was staying in a hotel in downtown Seattle.

• 1:20:18Chamath Palihapitiya?

  Is your family with you or no?

• 1:20:20Speaker 01

  My family went to join, well, not my, not my, not my, not my kids. My sister and my mom went to join me. I didn't want my kids to go to school. And then my partner has a business to run. I was already like, no longer running the business.

• 1:20:35Chamath Palihapitiya?

  Yeah.

• 1:20:35Speaker 01

  So I didn't want to drag her away from that. So, yeah, so my sister, my, my, my mom and my older kids were with me. And then, yeah, so that's, and then I'll stay in a hotel. And then the next morning, go into court. Going to court, the first part of the process is the plea, right? The judge asks you, do you understand this paragraph, this paragraph, this paragraph? Just say yes, yes, yes. The paragraphs are already negotiated out of the wazoo by the multiple Sony lawyers.

• 1:21:05Chamath Palihapitiya?

  Overlawyered.

• 1:21:06Speaker 01

  Overlawyered and you the so so you know and then you then the lawyers debate about you know the the they did the first case when I after the plea they didn't debate about the charge. They debate about my bail, my bail condition, right? So I got a post bail. My lawyers argued I should be allowed to go back to UAE waiting for the sentence three months later. The government argued that I may not come back, so they want me to stay in the US. And they said they will not restrict me in my movement in the US because I don't I don't I don't I don't possess any harm to the community. They argue about that the magistrate judge, the first judge approved me leaving the US

• 1:21:49Speaker 01

  to go back to the UAE for three months, which would which would have been great. And then the the government appealed that. My lawyer says like in his forty years, he never seen a appeal on a bail condition. And then he said, well, this guy is a tone death because this will piss off the courts, which will actually be my favor. And guess what? Two weeks later, the court ruled in the government's favor and I was kept in the US. So I was kept away from home for three months. When three months came.

• 1:22:16Chamath Palihapitiya?

  In that hotel?

• 1:22:16Speaker 01

  I was free to travel in the US. I was like, well, I'm stuck in the US, so might as well travel. I have a sister, my sister have a place in the US, so I was staying with my sister for a bit of the time and then I was traveling just cool, just to try to keep myself cool, chill, all right? And then three months later, the government requests for another three months extension. So now I have to stay in the US for another three months longer waiting for.

• 1:22:38Chamath Palihapitiya?

  Now, were your kids at this point coming to see you at least so that they could come see you?

• 1:22:41Speaker 01

  No, I didn't ask them to come and see me.

• 1:22:44Chamath Palihapitiya?

  So you didn't see them for six months?

• 1:22:45Speaker 01

  Yeah, and well, actually, I didn't.

• 1:22:47Chamath Palihapitiya?

  And then, yeah.

• 1:22:48Speaker 01

  Yeah, so and then so that government asked for another three months extension, then on April thirtieth, twenty twenty four, that's my court date. And then a week before that is when both sides submit their requests. The government requests for 36 months, which is twice the maximum sentencing guideline for the worst case scenario for me. Right, so the court said like then this court had never seen a government asking the court to ignore the sentencing guideline.

• 1:23:15Chamath Palihapitiya?

  Did you find that out for the first time, sitting there in the court?

• 1:23:19Speaker 01

  No, just a week before the court, because the government had to make the submission. There's a written submission before.

• 1:23:24Chamath Palihapitiya?

  How did you react to that?

• 1:23:25Speaker 01

  Well, not good, right? So, and then my lawyers also, my lawyer tone changed. Before they said, oh, you can probably get home. They said, look, the judge most likely is going to split the baby. So if the government is asking for 36 months, you're asking for probation, the government most likely picks up number in between. Right, so I was like, okay, that's not good.

• 1:23:45Chamath Palihapitiya?

  Wow.

• 1:23:46Speaker 01

  Yeah. And also five days before my sentencing, on April 25th, Senator Elizabeth Warren went on TV to say, to declare war on crypto again. So this is like five days before my sentencing. And he wrote an open letter, she wrote an open letter to the DOJ, saying all this stuff, which is actually, most of it is not correct. So, yeah, so then that's, and April 30th, I got sentenced. And then the judge, the judge said a bunch of good, really good things about me. I have all the excerpts in the book. And then at some point, the judge says, but, and then you, you're like, okay, that's not good. Yeah. And then I got four months.

• 1:24:26Chamath Palihapitiya?

  That's how they start the sentencing. They're like, he's telling you all the good things, and then he gets to the but, and you're like, oh, my God.

• 1:24:33Speaker 01

  Pretty much, pretty much, yeah.

• 1:24:34Chamath Palihapitiya?

  Wow.

• 1:24:35Speaker 01

  Yeah, so the lawyers do debate, and the sentencing on the April 30th, the lawyers debating court about, no, this, that's when the two hesmes got rejected by the court. Like, my lawyers argue like, no, this and that, this, I never touched any of the transactions, I'm not aware, this thing's just.

• 1:24:51Chamath Palihapitiya?

  Layers three and four of the accusations got thrown out.

• 1:24:54Speaker 01

  Yeah, so, and then they argue about, you know, what's, what should, what should, what the recommended sentencing should be. My lawyers, of course, argued for either probation or home confinement at the worst case. Right, and then the government argued like, this guy's a really bad guy, you know, this case is really big, and we should punish him really, really hard with double the punishment of any legally recommended punishment, 36 months. So the judge landed at four.

• 1:25:24Chamath Palihapitiya?

  How did you deal with that?

• 1:25:26Speaker 01

  It was difficult at the beginning, right? It wasn't a four month, it was, am I gonna be safe? Alright, so if, if, if, like, if you tell me, like, I'm gonna go to this place for four months, I'm guaranteed to be safe, I'll be okay. I'll be like, okay, fine, I'll just deal with it. But the uncertain part is, like, also, right after the sentencing, a bunch of the big media wrote that I'm gonna be the richest person to ever go to US prison. And then my lawyers plus prison consultants, they say, well, given all this coverage. What is a prison consultant? That's a whole industry of, some guy who devise you what prison is like and give you advice and stuff like that. How to live, how to?

• 1:26:10Speaker 01

  Yeah, so that's a whole big industry that's growing because of the prison population is growing in the US. So anyway, so the prison consultants, like, given the high-profile coverage, you're probably the biggest target for potential extortion in prison. So your safety is gonna be an issue. So that's the thing I was worried about then. I was like, so how do I deal, like, you know, you go in and they, you don't have anything, right? How do you, how do I make sure that I stay safe? That's like the top consideration, right? So you're really thinking about. How do you do that? So, well, you know, you talk to a lot of people who, prison consultants are usually like ex-guards, ex-wardens.

• 1:26:54Speaker 01

  There's another group of guys who, people who have been to, but those guys are in prison, but they are working there. They're not, they're not inmates. There's another group of guys who've been into prison, prison, like, they were there for, like, as an inmate. So you talk to a lot of those guys, and then you figure out what prison is like. Do you make friends? Do you not make friends? You get advice on like, you know, if somebody comes up to you on the first day and they're really, really friendly, don't take anything from them because, no, they will ask for 10 times more favor back later on. If you don't, then they stab you and stuff like that. So I got a lot of different advice, but at the end of the day, you just gotta go and face it, right? So I learned, what I learned is actually, the US prison system is so vast. 2 million people stay in US prison.

• 1:27:36Speaker 01

  The US government spends per annum more on prison than on education or schools. Right, so that's how much, how big the US prison population is. And there's fifty states and everyone, every state has a different system. There's state prisons, there's federal prisons, and each one is like a mini city. Like the prison I went in has twenty-two hundred inmates. It's like a small city. And they each have their own rules, etc. So I got some advice, but many of those advice are not really useful. But when you go in, you just gotta deal with it.

• 1:28:10Chamath Palihapitiya?

  So you get sentenced on April thirtieth, you said?

• 1:28:12Speaker 01

  Yep.

• 1:28:13Chamath Palihapitiya?

  And when do you start?

• 1:28:14Speaker 01

  So when you get sentenced, you don't know where, we don't know which prison you're going to. The court makes two recommendations. And then usually you will receive a letter.

• 1:28:24Chamath Palihapitiya?

  But you can be in the hotel or doing whatever, and then you have to check in, basically. On some date, like you have to go?

• 1:28:30Speaker 01

  So in my case, the judge ruled that I don't need supervision, which is very unique. Then I don't have to check in. So I just had to sit, I just had to wait for a letter that comes to my sister's place, which is the address I registered with the court. In fact, the government, the DOJ, in their request, they asked me to be premended, meaning that I'll be taken away in handcuffs. I think they really wanted that photo for PR reasons. But the judge said, look, he's not a risk. He's not a flight risk, he's not a risk to society. I'm not gonna do, I'm not gonna do that. In fact, the judge added one sentence that he doesn't, he does not need supervision, which is actually a very interesting legal clause I'll learn later. This is why, when I finish my sentence, I don't have probation. There's no parole, I don't, I don't need supervision.

• 1:29:15Speaker 01

  So, so there's something really interesting stuff, well, interesting stuff that you learned.

• 1:29:19Chamath Palihapitiya?

  How was that period for you? Did anything bad happen, or was it?

• 1:29:24Speaker 01

  Luckily, nothing too bad happened. It's not, it's a really bad experience overall, but nothing like, no physical harm. There's no fights, there's no, there's no real extortion. What I found, like, so my prison consultants tell me, like, no, when you go in, don't join any gangs, stay to yourself. Just, you know, just, just stay to yourself, be quiet, stay out of sight, just move. The minute I walked into the prison gate, the guard says, oh, you're gonna need some protection here. I hear the Pacific Islanders are hiring, so you might wanna join them. Like that's like this is literally like the minute I walked through the gate, one guard was saying this to me. Wow. I was like, what does that mean? Right?

• 1:30:06Speaker 01

  And then, you know, after the whole day, the first day was like, the first day is pretty like, they take you through so many processes, strip search. I talked on CNBC, like, you know, they they strip search you. And then you move to your unit, which is like, you know, two hundred inmates there. It's like three rows of cells, twenty cells each facing each other, three floors. And there's a common area in the in the bottom. And there's like two hundred macho guys looking at you and, you know, you walk into a cell and then. But what I actually found out is they organize prisons by race, so by ethnicity. They group, so if you are a Chinese dude, they group you with a Chinese dudes.

• 1:30:45Speaker 01

  And if you're like a white guy, they group you with white guys, black dudes, Mexican, Spanish guys, you know, they they put them in one group. And this actually does avoid a lot of conflicts. You are more likely to get along with people of your own ethnicity in terms of culture, customs. Like, you know, there was one or two Arab guys that, you know, they they pray, they have a different schedule. So they put you in groups by ethnicity and the guards actually, the prison encourages it because it reduces fighting. Oh, wow. And then, once you're in a group, if you have a problem with somebody else in somebody, some other group, there's a group rep. And the rep will talk about it and, you know, this is like a hierarchy. And so. Union reps? Kind of like a union reps.

• 1:31:31Speaker 01

  And then they come together and they hash out. Yeah, they say, look, stand down, we walked, we walked through it. So so there's a system to it, but I I didn't know any of this, right? So I walk in and then this half Asian looking dude comes to me, say, look, my name's Chino. Welcome to our group. He says car, welcome to our car. I was like, what? Should I shake his hand? Should I not? Like, am I joining this gang? This like, it's, yeah.

• 1:31:58Chamath Palihapitiya?

  It's crazy.

• 1:31:59Speaker 01

  Yeah, and this guy is a Filipino-German mix. There's not enough Asians, so they kind of group anything that's kind of Asian. And they also group the Native Americans plus Pacific Islanders, like the Hawaiians, into the same group. So our group only has six people out of this 200 people. And I was sent to a low-security prison. I should be eligible for a minimum-security prison, which is well-level lower, where most of the white-collar crimes go. But because I'm not a US citizen, they put me into a low, which is where all the drug laws are.

• 1:32:31Chamath Palihapitiya?

  Wow.

• 1:32:32Speaker 01

  Yeah, so it's a crazy experience. I have quite a lot of details about this part in my upcoming book.

• 1:32:39Chamath Palihapitiya?

  What was the first thing you did when you got out?

• 1:32:41Speaker 01

  A good shower, a good meal. When you first get, so the shower is like, literally like, you know, a box this big. This is like a cowboy barred door, like that covers the middle part. They can see your legs and see your head. But it's hard to take a shower without touching the wall. So when you get out of prison the first time, it's like taking a shower. You no longer need to touch the shower wall. That's like a luxury. That's a luxury. And also, there's very limited fruits, very limited protein, like proper protein. And there's a lot of carbs, a lot of like, you know, bread, flowers, fried stuff. Very little veggies, very little protein, very little fruits.

• 1:33:25Speaker 01

  I haven't seen a whole fruit for like, a month. When I saw, when I got out and saw like, a plate of fruit, I was like, wow, that's a luxury I haven't seen for a few months.

• 1:33:34Chamath Palihapitiya?

  Wow.

• 1:33:35Speaker 01

  Yeah.

• 1:33:36Chamath Palihapitiya?

  Did you immediately just go back to the UAE?

• 1:33:37Speaker 01

  Yeah, yeah. When I left prison, it took me about 26 minutes from leaving the prison door to getting on the airplane and flying out.

• 1:33:47Chamath Palihapitiya?

  What were you thinking? Were you saying to yourself, I understand where they were coming from? And I was at least vindicated on the parts that I felt were overreach. I can see where they were coming from with these first two things. Did you say that to yourself? Or did you say?

• 1:34:06Chamath Palihapitiya?

  This was a total railroad and this is completely unfair. And how did this happen to me? Why did this happen to me? What were you saying to yourself?

• 1:34:14Speaker 01

  I have some restrictions on what I can say about the agreement, the plea, et cetera. So I-

• 1:34:20Chamath Palihapitiya?

  I'm just talking emotionally.

• 1:34:21Speaker 01

  Emotionally, I just want to be, I would just want it to be over with. And remember that when I first got out, this is still the Biden administration. The election has not happened. And it wasn't clear who's gonna win. It wasn't clear, the US policy is still the same.

• 1:34:37Chamath Palihapitiya?

  You went in when?

• 1:34:38Speaker 01

  I went in on May 30th, 2024.

• 1:34:41Chamath Palihapitiya?

  And you got out four months later?

• 1:34:43Speaker 01

  September 27th is the day I fully got out. The election was in November, right?

• 1:34:49Chamath Palihapitiya?

  And by the way, sorry, at that point, you had been in America for a year.

• 1:34:52Speaker 01

  For-

• 1:34:52Chamath Palihapitiya?

  You hadn't seen your kids in a year.

• 1:34:53Speaker 01

  Yeah, yeah. So at that point, like, I just want this whole thing to be over with. And I thought they will continue, well, I thought if the policies continue, then you will still be anti-crypto policies. Or just, whatever, we'll just survive however we survive. So, yeah, so that was, that was kind of the mentality.

• 1:35:12Chamath Palihapitiya?

  So when you get back, had you come to terms as well with the fact that you couldn't run Binance, per se? And that that was part of the plea and?

• 1:35:21Speaker 01

  Yeah, so I'm actually okay with that. Stepping down was really, really hard. I actually cried out of it. And the only other time I really cried was like, you know, when my father passed away a few years ago. But after a few, after coming back, you know, I was actually quite happy not to run Binance. I have a lot more free time. And then if I stepped down myself, people will say, hey, this guy ran out of stamina. And like, now I can't run Binance, so, so it's not my fault.

• 1:35:49Chamath Palihapitiya?

  It's not your problem.

• 1:35:50Speaker 01

  It's not, it's not my choice.

• 1:35:51Chamath Palihapitiya?

  Right.

• 1:35:52Speaker 01

  But after, after a while, I was like, no, there are other, there are other very useful, meaningful things I can do with my life. I, I think overall, I'm in a very fortunate position, right? I have resources, I have enough money to do whatever I want to do in terms of enabling projects and businesses, et cetera. Including like, you know, Google Academy, free education, stuff like that.

• 1:36:13Chamath Palihapitiya?

  Yeah, I want to talk about that and AI.

• 1:36:15Speaker 01

  Yeah, yeah.

• 1:36:15Chamath Palihapitiya?

  But before I do that, let's just do a little bit of the final coda here. Tell me about the process to start getting a pardon and getting it and- What you had to do and.

• 1:36:26Speaker 01

  Yeah, so the so on the pardon, I don't think anybody knows what the pardon process is.

• 1:36:31Chamath Palihapitiya?

  Doesn't seem like there's a process.

• 1:36:33Speaker 01

  Like, I don't even know what the process is. So what the process is, you find a lawyer who writes your petition, who put all the arguments, why you were, you should be pardoned, why, you know, you were overly prosecuted, et cetera, et cetera, right? And why are you a good person?

• 1:36:46Chamath Palihapitiya?

  And a pardon, what is it for? Is it effectively to recognize over prosecution?

• 1:36:51Speaker 01

  No, pardon should pardon should you raise everything you had you had before. So you're now a normal person.

• 1:36:56Chamath Palihapitiya?

  But the reason to be considered for it can be anything.

• 1:36:59Speaker 01

  It can be anything.

• 1:37:00Chamath Palihapitiya?

  It's really just the discretion of the president reading the petition.

• 1:37:03Speaker 01

  I think so. Well, based on my understanding, based on my understanding is the Constitution grants the US government, the US president to get pardoned. And that's about, that's about as much detail as it says, I think.

• 1:37:17Chamath Palihapitiya?

  Right, okay.

• 1:37:18Speaker 01

  And then how he does it.

• 1:37:19Chamath Palihapitiya?

  So it's really about the social norms in that moment, and then how he interprets.

• 1:37:23Speaker 01

  I think so.

• 1:37:23Chamath Palihapitiya?

  Those social norms.

• 1:37:24Speaker 01

  And then, you know, historically, most presidents pardon on the last day, right?

• 1:37:29Chamath Palihapitiya?

  Exactly.

• 1:37:29Speaker 01

  And then Biden, I think, started pardoning in between.

• 1:37:34Chamath Palihapitiya?

  And he also did prepardons.

• 1:37:36Speaker 01

  Which is, which is, which is a bit new, which is new and also crazy.

• 1:37:39Chamath Palihapitiya?

  Well, it was very new, yeah.

• 1:37:40Speaker 01

  Which is.

• 1:37:41Chamath Palihapitiya?

  It was largely around COVID for that, but yeah, that really caught a lot of people.

• 1:37:45Speaker 01

  He also prepardoned his son for some, for some, for some period.

• 1:37:49Chamath Palihapitiya?

  That's right.

• 1:37:49Speaker 01

  Biden pardoned.

• 1:37:50Chamath Palihapitiya?

  It wasn't just the COVID stuff.

• 1:37:51Speaker 01

  It wasn't just a COVID study. It was like a period where nobody, where there were a period of time where nobody even talked about.

• 1:37:57Chamath Palihapitiya?

  That's right.

• 1:37:57Speaker 01

  It was like, why do we need it?

• 1:37:58Chamath Palihapitiya?

  That's right.

• 1:37:59Speaker 01

  But anyway, so the process, I believe, is there's no process. The president can do whatever they want. And then, so you submit a petition, then you wait, and then there is a pardon czar in the White House. I think her name is Alice Johnson. She also went to prison for many years. She wrote, she wrote a really nice book, which I read. But your lawyers, you know, pink her, say, you need a status update, you need a status update. There's no, no, no. And then suddenly it happened. So that's kind of my, the.

• 1:38:32Speaker 01

  The extent I know about the pardon process, I don't think anybody knows, I don't think that's a fixed process. I don't think anybody knows what that is.

• 1:38:37Chamath Palihapitiya?

  The question that some people can kind of jump to is they think, what must CZ have done to try to get it? Do you want to put that to bed?

• 1:38:44Speaker 01

  Well, I didn't do much. I didn't do anything. And then, but I think, look, without a pardon, it's quite hard for Binance to enter the US in a proper way. I think if you-

• 1:38:53Chamath Palihapitiya?

  Because you're the UBO.

• 1:38:55Speaker 01

  I'm the UBO, yeah. So, and Binance, I'm the UBO of Binance and Binance US, right? Without a pardon, Binance is severely limited to do stuff in the US. If US wants to become the capital of crypto in the world, you cannot have, you cannot not have the largest player. You cannot, you cannot have US people not be able to access the largest liquidity pool in crypto. And also, we're also one of the largest crypto ecosystems. And so I think, my guess would be that, look, the president is a pro crypto president. You obviously know-

• 1:39:30Chamath Palihapitiya?

  He's had his own issues, like the de-banking-

• 1:39:32Speaker 01

  Exactly.

• 1:39:32Chamath Palihapitiya?

  Where he's felt what it feels like to be targeted.

• 1:39:35Speaker 01

  Not only de-banking, he got 34 criminal charges.

• 1:39:38Chamath Palihapitiya?

  Yeah.

• 1:39:39Speaker 01

  Right?

• 1:39:39Chamath Palihapitiya?

  That as well.

• 1:39:40Speaker 01

  And he got, like, one of the, I don't know all the other charges, but-

• 1:39:42Chamath Palihapitiya?

  That as well.

• 1:39:43Speaker 01

  When I was in prison, I saw on the prison TV that he got 34 criminal charges, something like that. And one of the charges was he brought some document to his bathroom to read.

• 1:39:50Chamath Palihapitiya?

  That's-

• 1:39:51Speaker 01

  I'm like, that's crazy. Right? So, I think the fact that he went through that the Biden DOJ would probably help me a lot to get the pardon, because he was sympathized. He knows how aggressive that DOJ was, right? So, that probably helped me in some way.

• 1:40:06Chamath Palihapitiya?

  So, how do you spend your time now?

• 1:40:07Speaker 01

  I'm still getting pretty busy now. So, I do Google Academy, you know, this free education platform. I consult with many governments on, to help them to put in, so sound crypto regulatory policies. I get involved on the investment side. We invest in blockchain AI biotech, the very active team doing investments. And then-

• 1:40:29Chamath Palihapitiya?

  This is within Binance or outside of Binance?

• 1:40:31Speaker 01

  This is outside of Binance. This is a part of Easy Labs. And then I also help, like, mentor, coach a few guys in the, a few founders in the BNB chain ecosystem, etc. So, being in all of those things, I'm actually pretty busy.

• 1:40:42Chamath Palihapitiya?

  Tell me about Google Academy.

• 1:40:43Speaker 01

  So, I thought, no, it's possible to develop, fully digitize all education content.

• 1:40:50Chamath Palihapitiya?

  Why is that important?

• 1:40:51Speaker 01

  There's some numbers. I think seven, seven hundred to eight hundred million adults do not are illiterate. Two, two third of them are women. And on top of that, there's about five hundred million kids who are not in school. If you add all of that up, that's like one point two billion people who are not educated.

• 1:41:08Chamath Palihapitiya?

  Twelve, twelve, thirteen percent of the world population.

• 1:41:10Speaker 01

  Yeah. And these are all in really poor areas. There's just no schools around or they just couldn't afford to go to school. And the schools are not very good today either. The schools are like, you know, they, the schools average you out.

• 1:41:26Speaker 01

  You have a classroom.

• 1:41:26Chamath Palihapitiya?

  How is the software designed?

• 1:41:28Speaker 01

  So it's just an app on a phone or, or, or phone or tablet. It's just an app. I believe that we have enough technology with, you know, gaming, understanding of human psychology with AI. A single app can deliver all the education content you need and we can do that for free.

• 1:41:43Chamath Palihapitiya?

  Have you looked at versions of this like Alpha School and do you have any opinions on that?

• 1:41:47Speaker 01

  Yes, yes. I think Alpha School is great. Alpha School is really, really good.

• 1:41:52Speaker 01

  But, you know, it's high cost.

• 1:41:53Chamath Palihapitiya?

  High cost.

• 1:41:54Speaker 01

  Right. So it's more, I think.

• 1:41:58Chamath Palihapitiya?

  I think Joe's software is called Time Back. I think that's what it's called. Have you had a chance to see?

• 1:42:03Speaker 01

  I have not played with a lot. I did meet some of the founders there and some of the key executives there.

• 1:42:10Speaker 01

  They target a, they solve a very hard problem of making, making the existing education better. Where I solve the other end of the problem, making the education accessible, hopefully better later.

• 1:42:20Chamath Palihapitiya?

  And so your goal would be that this is widely proliferated. Are there schools in your view of how Giggle works or?

• 1:42:28Speaker 01

  No, I actually don't want to do schools. I, I, I want everyone to learn from one app.

• 1:42:33Chamath Palihapitiya?

  The software is very reward oriented.

• 1:42:36Speaker 01

  Yeah.

• 1:42:36Chamath Palihapitiya?

  Badges.

• 1:42:37Speaker 01

  Yeah, yeah.

• 1:42:38Chamath Palihapitiya?

  I mean, just can ask the obvious question. When I looked at it, I was like, well. Badges is like a trail of breadcrumbs to like

• 1:42:45Speaker 01

  Tokenize.

• 1:42:46Chamath Palihapitiya?

  Tokenize and earn and payments. Am I just making this up or?

• 1:42:50Speaker 01

  No, so I thought really hard about this, but I will for a very long time resist issue a token on Gigo Academy. This is pros and cons. When you issue a token, you can do the rewards, you can learn to earn.

• 1:43:02Chamath Palihapitiya?

  Learn to earn, exactly.

• 1:43:03Speaker 01

  You can do a bunch of stuff, you can incentivize teachers, you can create content.

• 1:43:08Chamath Palihapitiya?

  Yeah.

• 1:43:09Speaker 01

  That's good, but for me, I want to avoid the token because of me, right?

• 1:43:15Chamath Palihapitiya?

  I see.

• 1:43:16Speaker 01

  Because if I do a token, everyone wants to buy the token and everyone on the platform.

• 1:43:19Chamath Palihapitiya?

  People want to speculate on the token.

• 1:43:20Speaker 01

  People want to speculate on the token, then I won't be able to tell if people, are they real kids learning? Or they're just farmers that are trying to fund the token?

• 1:43:28Chamath Palihapitiya?

  Yeah.

• 1:43:28Speaker 01

  I want to, if I issue a token, if Gigo issue a token, everyone's gonna.

• 1:43:32Chamath Palihapitiya?

  I have to be honest, I think Gigo sounds really incredible, but that was where my reptilian brain went was the.

• 1:43:38Speaker 01

  Everyone thinks about that, it's a very obvious thing, right?

• 1:43:41Chamath Palihapitiya?

  Yeah, exactly.

• 1:43:41Speaker 01

  But I want Gigo, I want Gigo to be a real free education platform instead of a token platform, instead of some crypto thing, right? So if there's a token, then people is gonna focus on the token.

• 1:43:52Chamath Palihapitiya?

  So your goal is that you'll just deficit finance this and just continue to kind of proliferate this?

• 1:43:56Speaker 01

  Yeah, yeah, yeah. So that was my goal, but what happened is there's a community project that donated like $12 billion.

• 1:44:04Chamath Palihapitiya?

  $12 million?

• 1:44:05Speaker 01

  $12 million US dollars based on meme coin. And this is not some like, and I've only spent like maybe three, four million dollars on the entire project so far.

• 1:44:14Chamath Palihapitiya?

  Yeah.

• 1:44:14Speaker 01

  So now, you know, it's actually net, like, you know, it's hard to give money away.

• 1:44:18Chamath Palihapitiya?

  Yeah.

• 1:44:19Speaker 01

  So it's hard to give money away with a positive impact.

• 1:44:22Chamath Palihapitiya?

  With positive impact, it's very, very difficult, very difficult.

• 1:44:25Speaker 01

  So, yeah, so my plan is I will fund it for as long as it needs to reach that goal of a fully, fully digitized delivery. Of education in a gamified sticky way.

• 1:44:37Chamath Palihapitiya?

  Let me ask an AI question for a second.

• 1:44:39Speaker 01

  Yeah.

• 1:44:39Chamath Palihapitiya?

  You said that AI is this third pillar of your life that you see, these big waves, right?

• 1:44:44Speaker 01

  Yep.

• 1:44:45Chamath Palihapitiya?

  One of the most interesting things about AI is that when you basically get one level below the English and you start to look at the embeddings and that and the layer of embeddings.

• 1:44:53Speaker 01

  Yeah.

• 1:44:54Chamath Palihapitiya?

  What you start to see is that it's this machine readable language. It's not English.

• 1:44:58Speaker 01

  Yeah.

• 1:44:58Chamath Palihapitiya?

  And there's a richness of information there. It's perfect for agents.

• 1:45:01Speaker 01

  Yeah.

• 1:45:02Chamath Palihapitiya?

  It can traverse it, you can cipher query it, you can do all this stuff that allows you to make really incredible leaps in productivity and otherwise.

• 1:45:09Speaker 01

  Yeah.

• 1:45:10Chamath Palihapitiya?

  It stands to reason that agents are also participants of commerce and need payments and, you know, and I think you've said this, is like probably the largest user of crypto at some point in the near future. Describe that vision for us.

• 1:45:23Speaker 01

  Yeah, I think it's fairly straightforward. I think, as you said, right? I think it's very clear soon, we're gonna, each of us is gonna have like now hundreds or thousands or millions of agents working for us in the background. And they will be transacting, they will be, they will be moving money around, right? So in theory, if I wanna listen to this podcast, you know, your people should pay a few cents to listen to it, whatever economic model that you want.

• 1:45:46Chamath Palihapitiya?

  More than that, Cece.

• 1:45:48Speaker 01

  Sure, of course. Sure. But there was some economic model, right?

• 1:45:52Chamath Palihapitiya?

  Right.

• 1:45:52Speaker 01

  Right now, you know, even last year, we talked about agents buying tickets for us. It's not quite there yet, but you will get there, right? They will book restaurants, they will pay, they will pay for hotels for us. And then the agents can transact a million times more than us.

• 1:46:06Chamath Palihapitiya?

  Yeah.

• 1:46:06Speaker 01

  And they're not gonna use banks. Banks just won't be able to support.

• 1:46:10Chamath Palihapitiya?

  Well, banks won't onboard and AML KYC an agent. Doesn't even make sense.

• 1:46:14Speaker 01

  You can't do a KYC, they can't swipe a card.

• 1:46:17Chamath Palihapitiya?

  It doesn't make any sense.

• 1:46:17Speaker 01

  Right, so.

• 1:46:19Chamath Palihapitiya?

  But also what agents will do is they'll transact at a transaction volume and at a rate.

• 1:46:23Speaker 01

  Yeah.

• 1:46:23Chamath Palihapitiya?

  It'll make the traditional networks headspin.

• 1:46:26Speaker 01

  Exactly. They're just not gonna be able to support it.

• 1:46:28Chamath Palihapitiya?

  Yeah.

• 1:46:28Speaker 01

  Right? And also even stuff like investments or trading, right? So today, you know, you open the Binance app, you look at a chart, you have to like, you know, click on a price level and you have to type in the price on a green or red button. That shouldn't be the interface. The interface should be like, hey, look, convert 10% of my stablecoin into BNB. And then you'll figure out, okay, if you have a large position, you'll do it slowly over time. If you have a small position, which would be one market order. All of that stuff should be just happening in the background. All right? So the agent can do this for us. Soon you will be able to.

• 1:46:58Chamath Palihapitiya?

  What is the most viable payment system today that agents could rely on?

• 1:47:03Speaker 01

  I'm actually not too sure. I don't think there is anyone that's super.

• 1:47:07Chamath Palihapitiya?

  What crypto project today do you think comes?

• 1:47:09Speaker 01

  Oh, you mean crypto?

• 1:47:10Chamath Palihapitiya?

  Yeah. That agents could use theoretically.

• 1:47:12Speaker 01

  Again, it's early days. I don't want to speculate. I don't want to name any specific projects. It will cause some token price fluctuations. But quite a number of people are working on it. So especially recently with a more like AI agent, social network thing. So it's getting more and more hype.

• 1:47:28Chamath Palihapitiya?

  Yeah.

• 1:47:29Speaker 01

  And yeah, so I think you'll get there.

• 1:47:31Chamath Palihapitiya?

  Let me ask you about crypto in general for a second. What is the role when you see?

• 1:47:37Chamath Palihapitiya?

  A lot of stuff around free speech. What is the role of privacy in crypto? One of the things that I struggle with. If you ask me, am I a Bitcoin maximalist? I would say no. Even though I was early, I think my biggest issue with it is that there's a lack of fungibility, which I think is problematic to get to mega scale. And then there's a lack of privacy.

• 1:47:55Speaker 01

  I agree.

• 1:47:56Chamath Palihapitiya?

  It's probably the biggest thing that will hold Bitcoin back from being ubiquitous. Where does privacy play as the world evolves as you see it?

• 1:48:03Speaker 01

  I think privacy plays a very fundamental role in our society. But right now, as you said, I also think that Bitcoin and most cryptocurrencies do not have enough privacy features. I think when Bitcoin was designed, it was going to be pseudo anonymous. But the fact is, every transaction on the blockchain can trace. Especially now you have a centralized exchange with KYC.

• 1:48:23Chamath Palihapitiya?

  Exactly.

• 1:48:24Speaker 01

  And, you know, if you have like. It's actually very easy.

• 1:48:28Chamath Palihapitiya?

  And by the way, we go always back to the same argument, which is it always goes back to the corner case of while somebody is using this for something illicit. And I say. There are those use cases, but the overwhelming majority is you buy a pack of gum. But tomorrow you may buy, you know, you may want to buy a certain movie or a video game. You may want to buy a cigarette. And it's not for me to judge.

• 1:48:49Speaker 01

  Yeah.

• 1:48:49Chamath Palihapitiya?

  And. Dollars are fungible in that sense. There's complete anonymity. We have no idea about what it was used before that I got my hands on it.

• 1:48:59Speaker 01

  Well, there are actually real applications where privacy is extremely important. If you book a certain hotel and people know that hotel address, like blockchain hotel address, the receiving address. They will know that you will be in that hotel.

• 1:49:10Chamath Palihapitiya?

  That's right.

• 1:49:10Speaker 01

  That's a fiscal security for you.

• 1:49:12Chamath Palihapitiya?

  That's right.

• 1:49:13Speaker 01

  Right? So there are real use cases where privacy is very important. This is why people don't publicize their home addresses online.

• 1:49:19Chamath Palihapitiya?

  That's right.

• 1:49:19Speaker 01

  In many countries, if you, if you review somebody, in Japan, if you review somebody's home address, that's illegal. Right, so there are real use cases for privacy, at which Bitcoin, most cryptocurrencies currently do not provide.

• 1:49:34Chamath Palihapitiya?

  Yeah.

• 1:49:34Speaker 01

  There's a counter argument, okay, law enforcement wanted to track down bad guys. That can be done, even with, no, that can be done. I'm supportive of that, but there's fundamental privacy issues. So I do think that in the future, as an industry, we need to figure out how to evolve the privacy features, which no one's really focusing on right now. There's a few privacy-focused coins, I shouldn't say no one, but they are, they don't have much market cap. They don't have much size.

• 1:50:04Chamath Palihapitiya?

  Right.

• 1:50:04Speaker 01

  Yeah.

• 1:50:05Chamath Palihapitiya?

  Tell me about the book.

• 1:50:06Speaker 01

  It's coming along. It's always a longer project than I anticipate, right?

• 1:50:11Chamath Palihapitiya?

  What was the point of it? Was it like catharsis? Or is it to make a point? Is it to tell a story? All of those things?

• 1:50:19Speaker 01

  A bit of everything. It started because I was bored. Because I was, I started drafting when I was in prison. It was just to keep me busy. Because I don't want to deal with, you know, I don't want to be chatting with, it just keep me busy in prison. So I was trying to drafting it and typing on a very dumb terminal and sending it to my assistant. And then, once I got out, I was like, well, I have enough that if I spend a bit more time on it, I can have a book. And then, but editing a book takes so long. Every pass takes like two, three weeks, if you want to edit a book. Because like, no, right now it's like 95,000 words, so it's like 300 pages. And then, I'm also editing the English and Chinese version. So it just takes longer.

• 1:51:03Speaker 01

  But the point of the book right now, I think, is just to get the story out. I think there's many misconceptions about who I am, what I went through.

• 1:51:10Chamath Palihapitiya?

  What are those misconceptions, do you think?

• 1:51:12Speaker 01

  Well, there's a lot of negative media about crypto. There's a lot of negative media about CZ, Binance, the entire industry. And to some extent, I think there's a lot of negative media about Trump, the part, etc. That part is not too heavy in my book. I just know, this is as simple as we talked about on this podcast. But just for people to understand, like, you know, who I am, who, to some extent, by extension, who Binance kind of is from my perspective.

• 1:51:38Chamath Palihapitiya?

  Is it important story for your children?

• 1:51:42Speaker 01

  I think so, yes, yeah.

• 1:51:44Chamath Palihapitiya?

  Why?

• 1:51:44Speaker 01

  Uh, I think it's important for them to under- like, no, they see, they of course are more on my side. They know all this media is not the right stuff. Uh, but they haven't, I didn't have time to explain the story to them in this level of detail. And I think it's important for them to read this and they will understand a lot more detail than what I, what I'm able to tell them verbally or in person, et cetera. Uh, even though the book doesn't contain everything, but it's as much as I can put in.

• 1:52:08Chamath Palihapitiya?

  What do you want for your kids?

• 1:52:10Speaker 01

  I want them to live a healthy and happy life, however they define it. Uh, if they're happy just being a normal person, then that's good for me. Uh, if they want to do startups and, you know, build companies and that's great. Um, if they want to be artistic, et cetera, that's great. If they want to do humanitarian efforts, charity, that's also great. Um, whatever they figure out what they want to do, I just want to be there to support them. Um, uh, yeah, that's the.

• 1:52:36Chamath Palihapitiya?

  How similar or different is that from what you got from your parents?

• 1:52:39Speaker 01

  Pretty similar. My, my parents didn't have pressure to on me. Uh, my pressure, my parents didn't pressure me to be this and that. Like, they didn't, they're not even like normal Chinese parents where they want you to be a doctor or engineer.

• 1:52:51Chamath Palihapitiya?

  Lawyer engineer.

• 1:52:51Speaker 01

  Lawyer.

• 1:52:52Chamath Palihapitiya?

  That was my, that was my parents, yeah, okay.

• 1:52:54Speaker 01

  My parents didn't do that with me. My parents like, you can do whatever you want. Uh, just, my parents said to me like.

• 1:52:59Chamath Palihapitiya?

  Very un-Chinese.

• 1:53:00Speaker 01

  Very un-Chinese. Uh, my parents said, don't hurt yourself, don't hurt other people. Right, so don't do drugs, uh, don't get into like, you know, don't, don't get into crime. Um, and then don't hurt other people. Uh, so that's, that's some of us, like, as I got from my parents. And, uh, yeah.

• 1:53:16Chamath Palihapitiya?

  I think there's a lot of people that probably hear this and they'll probably think that, and I think this is a real compliment, by the way, so don't take this wrong when I say this this way. That could have been me too.

• 1:53:30Speaker 01

  Yeah.

• 1:53:30Chamath Palihapitiya?

  I think that we glorify success in a way that makes it seem like it's impregnable. It's like this very quixotic thing that happens. And it's not that.

• 1:53:41Speaker 01

  No.

• 1:53:42Chamath Palihapitiya?

  Yeah. And. The reason why I can say that is that when I spend time with you, and I'm sure now with the people rounding two hours with you, they'll think, man, this guy is really normal.

• 1:53:54Speaker 01

  I'm a normal dude.

• 1:53:56Chamath Palihapitiya?

  Exactly. A lot of people say that, like, you know, to me as well in this weird way, it's like you're just a normal guy. And it's like, there's something really valuable about working on things that you like, because then the time just passes. And you kind of just put your head up and you're like, wow, okay, there's something new to try. Let's go try that. Let's go learn something. I want to give you a chance to speak to all these people who are probably thinking to themselves, wow, that could be me.

• 1:54:18Speaker 01

  Absolutely. I think, number one, I'm a normal dude. I know I'm not super smart, but you don't need to be super smart to be successful. You can't be too dumb, but you don't need to be super smart. There's a lot of other things like principles, values, emotional quotient. A lot of those things come into play. I think there's a lot of luck as well. But I think for most people, you are in a situation where you are. You usually cannot change the situation. So what you can only do is change yourself, right? So if you just push yourself a little bit every day, you don't have to push yourself too hard. If you push yourself too hard, you're going to burn out. And you're not going to last long. But you want to push yourself to like 120%, 110%, 130%, somewhere in that range, where however you can last long.

• 1:55:03Speaker 01

  And if you do that for like 30 years and you get lucky, you will most likely be relatively successful. You might not be a billionaire, but you'll have a very comfortable life.

• 1:55:14Chamath Palihapitiya?

  Do you think that it's important to

• 1:55:19Chamath Palihapitiya?

  maybe dispel the myth that being a billionaire is not everything it's cracked up to be?

• 1:55:23Speaker 01

  Oh, yeah, absolutely. Money is money. So in our life, there's a few, I kind of picture a spider web graph, right? Money is only one tangent, right? So once you have enough.

• 1:55:34Chamath Palihapitiya?

  It's one thread.

• 1:55:35Speaker 01

  It's one thread. Having more doesn't help you. In fact, there's health, there's family, there's other things that can keep you happy, like your values, contribution, positive impact. Like that's intrinsic, internal rewards that you feel very happy about. A lot of those things are extremely important. So, once you have enough money on this graph, you don't, more doesn't make you happy. Sometimes you have more, sometimes you have less. Then, how's your health? Also, there's another, I mean, time. How much time do you have? Can you use your time the way you want? Can you, are you working on the stuff you want? Are you spending with the people that you want to spend with?

• 1:56:08Chamath Palihapitiya?

  Yeah.

• 1:56:09Speaker 01

  And are your family healthy? You'll be, you are very lucky if your family is all healthy. Like, that's, that's already a huge gift. So, and then your mental health is also important. How do you deal with pressure, etc. I somehow am very lucky to have a very sort of stable mind. So, I think all of those things are extremely important. And all of those things you can improve on, instead of just money. A lot of people only chase money, but they sacrifice everything else. They work really, really hard. They don't have free time. They're not spending time with their family. Their health deteriorates after 10, 20 years.

• 1:56:41Chamath Palihapitiya?

  They don't enjoy the time that they're spending on these things.

• 1:56:43Speaker 01

  Yeah.

• 1:56:44Chamath Palihapitiya?

  Even to get the thing that they have so much of that they don't need.

• 1:56:46Speaker 01

  Yeah, yeah. So, this is also, this is also a part, like, I'm actually very grateful that I don't have to run finance anymore and I have more time.

• 1:56:52Chamath Palihapitiya?

  Yeah.

• 1:56:53Speaker 01

  Whereas before, like, even though that was very enjoyable, but on my other questions, I was not doing well.

• 1:56:58Chamath Palihapitiya?

  Yeah.

• 1:56:59Speaker 01

  Yeah, so, yeah.

• 1:56:59Chamath Palihapitiya?

  CZ, thanks for joining the All In Podcast.

• 1:57:01Speaker 01

  Thank you, thank you for having me.