Inside Binance: CEO Richard Teng on Nigeria, regulation, global plans in 2024

[00:00:10] Gareth Jenkinson: Welcome back to another episode of Decentralize with Cointelegraph. I’m your host and managing editor, Gareth Jenkinson. This episode is an exclusive interview with Binance CEO Richard Teng recorded during Token2049 in Singapore. We discussed Teng’s tenure as CEO, the ongoing efforts to secure the release of Tigran Gambaryan from detention in Nigeria, as well as Changpeng Zhao, well known as CZ, who is set to be released from prison at the end of September.

Richard, it’s great to catch up with you again. The last time we spoke was in December last year, I believe, when you first took over as Binance CEO. Ten, nine, ten months later, how’s it going? How’s the new job? Have you settled in? Are you enjoying yourself?

[00:00:53] Richard Teng: It’s good, it’s good. Thanks for having me again. It’s good to be back.

Ten months into the job, we continue to deploy globally. I mean, we have quite a number of challenges, but also quite a fair share of success stories as well. So, today, we have 225 million users globally. We just onboarded 45 million just this year alone. So, you can see the pace of crypto being very rapid, right? And throughout the course of this year, 2024 is a landmark year on that front, with greater regulatory recognition. And we now have 19 regulatory approvals around the world, making us the most regulated exchange. The latest one comes from India, and prior to that was Indonesia, Kazakhstan and Dubai, Thailand, earlier part of the year. So, we continue to work very closely with governments and regulatory agencies. So I think that’s one.

Secondly, institution adoption. So you see, with the approval of the Bitcoin and Ether ETF in the states and subsequently in places like Canada, Hong Kong, Australia, Brazil, that institution adoption is coming. So, this year alone, we onboarded, you know, more than... We saw more than 100% increase in institutional registration with us. So, that wave is very strong, and it becomes the anchor going forward. Crypto is a sector that is totally opposite from any other asset class. I mean, most other asset class starts from institution, goes down to corporate, high-net-worth, then in retail, right? This sector, retail embrace it for the longest time. The rest are not in this space, but 2024, we are starting to see that landmark shift. So, we are very bullish on the path ahead. So I’m good.

[00:02:35] Gareth Jenkinson: Yeah, it’s been an interesting year. I think, honestly, since you’ve taken over, it’s been way more quiet for Binance, you know. A lot less negative press and negative associations with everything that happened last year. Have you found working in these different jurisdictions like a welcome reprieve from having to deal with everything that was going on in the States? And, you know, the, you know, the spotlight that was on the exchange?

[00:02:54] Richard Teng: Yeah, so for some time, over the course of the past two years, there was a dark cloud hanging over us because of the US issue. So, we are very glad that we’re resolved that. We have paid a heavy price. Both Binance and CZ paid a heavy penalty, heavy price for this. What’s important is that we acknowledge, you know, during the early years where rules and regulations are unclear, we make mistakes. It’s important that we acknowledge them like other financial institutions does, invest in the right direction, and get much better. So, over the course of last two years, 2022, we spent $158 million in our compliance program. Last year, that went up to $213 million. This year, we got even more, right?

So, in terms of compliance account, we continue to recruit, continue to deploy globally, and we are very pleased with the results so far. We work, as I mentioned, very closely with global regulators and policymakers on that front to really educate them the innovative aspects of it, but how do you manage the risk aspect of it? And we continue to deploy. We are very grateful to our users for their continuous support of us and their trust in us. So, we continue to try to build the best-in-class platform to serve users wherever they are, with the best product features and the best robustness in terms of the platform.

[00:04:12] Gareth Jenkinson: In terms of Europe, obviously, MiCA is getting closer and closer to implementation. Is it still a green field for Binance, and is it still a jurisdiction and a continent that you want to get a better foothold in? Because it’s arguably, the US and Europe is probably the place where you have the least amount of users. I stand to be corrected.

[00:04:28] Richard Teng: Yeah, so Binance does global deployment. So, in Europe alone, today, we have six different registrations in six European Union’s, six European Union’s country. As of now, we continue to deploy in Europe. We continue to work very closely with the regulatory agencies over there, and we continue to await. I mean, MiCA has been introduced, but a lot of detailed provisions are not clear yet. So, other than on the stablecoin front, which I think clarity has been provided, we are still waiting for all the other provisions, and we intend to make sure that we continue to be a very important player in the European continent, continue to serve our users over there and support crypto adoption globally.

[00:05:11] Gareth Jenkinson: I read your post on the whole Nigerian situation with great interest earlier this year. I think you were very forthcoming from your side about what had happened, how things had played out with the Nigerian authorities. And it’s been a sticky situation, to say the least. I thought it was very reassuring that news came out last week that the US authorities have been actively engaging with Nigeria over Tigran’s detention. And I, to be honest, I found it very strange that they hadn’t done more for a long period of time or said anything. So, to know that, you know, there is work happening in the background. I don’t know if you can, just for the record, give us a very brief breakdown of what happened and perhaps where we’re at now. I know there’s an investigation ongoing, and there might be some things you can’t say. But yeah, just a brief overview of what happened and how you’re feeling about Tigran’s situation and the hopes of a potential resolution that, you know, see him return home.

[00:06:03] Richard Teng: First of all, our top priority is to get Tigran home safely to his loved one and family, right? He’s in poor health. He has gone through malaria, two bouts of pneumonia there. He has herniated disc, so he is in great pain. He can’t walk properly, and he’s not getting the proper medical treatment. We have appealed to the Nigerian government repeatedly to release Tigran on humanitarian grounds, so that he can go home and get the proper medical treatment that he needs, right? Whatever disagreement we have with governments around the world, we resolve them. We are compliant. We are cooperative. So, we have resolved issues in the States, in places like Brazil, India, and we continue to operate in many of those jurisdictions after the resolution of those issues. So, we appeal to the Nigerian government to say there’s no need to hold our staff, right? He’s held unjustly, unfairly. He was there on invitation as a financial crime expert, right? So, hopefully, the American government can designate him as unlawfully detained on that front, and we can get him home as soon as possible.

On our side, I mean, the world is looking at this, not only the crypto sector. Every economic industry looking at investments. This set a very bad precedent, right? If you have disagreement with a corporate and you detain their staff, innocent staff, on that regard, that’s not the way to really try to attract foreign direct investments into the country. So we want to work very closely with the Nigerian government to resolve whatever issues there are. And what we envisage is a future where, after all these issues are being resolved, that we can really support the country, Nigeria, in its economic transformation, where Web3 industry will become a key power to drive economic growth for the path forward.

[00:07:50] Gareth Jenkinson: Was it quite distressing to know that, at the end of the day, no one really had a lot of power to do anything for Tigran once he was detained by Nigerian officials? I mean, it’s another government, it’s another country. It’s kind of out of your... I mean, you can have all the money you want and the best legal systems or teams, but they put him in jail, and like, what do you do, you know? It must have been very distressing for you, you know, as an individual, and everyone that knows him.

[00:08:13] Richard Teng: It is distressing for all of us, right? Especially for the families. For us at Binance, this is a top priority for us. So, we have a task force internally working across the clock, looking at different avenues from legal to political and how do we resolve this issue. So, this continues to be a top priority for us. And we really appeal to the Nigerian government to let Tigran go home on humanitarian grounds.

[00:08:38] Gareth Jenkinson: Have you had a chance to deal with some of the US authorities? I mean, everything that happened, happened last year, but there’s a vested interest here to get Tigran home. You know, the US, I’m sure, he worked for the IRS for 10 years. I’m sure they want him to not be detained in Nigerian jail just as much as Binance doesn’t want one of their, sort of, you know, directors or executives to be behind bars.

[00:08:58] Richard Teng: Well, you know, our conversation with all governments around the world are confidential. So, I can’t go into that discussion. But we are working through multiple avenues at any and point in time to secure his release.

[00:09:10] Gareth Jenkinson: On a better note, CZ’s due to get out of jail in, I think, T-minus 10 days.

[00:09:16] Richard Teng: Very soon. Very, very soon, yeah.

[00:09:17] Gareth Jenkinson: Very, very soon. I think that’s great news. He spent four months behind bars. Like you said, he paid a heavy price. Are you looking forward to seeing him out? And once again, perhaps you can just clarify CZ’s involvement with Binance. I know that he cannot play a part in managing the company, but he still probably sits on the board and has obviously a load of shares and equity in the business.

[00:09:40] Richard Teng: Yeah, so, you know, I look forward to having him back home safely. All of us do. Crypto industry is looking forward to have him back safely, right? So, I think we are all looking forward to that. And CZ, all of us know, is a giant in this industry, and he has huge influence. I mean, he’s a major shareholder of Binance, on that front. So, he continue to have very broad shareholding rights on that. As for his future plans, I’m afraid you have to ask him, and you’ll get a chance, you know. It’s not too far away.

[00:10:10] Gareth Jenkinson: Yeah, it’s not too far.

[00:10:11] Richard Teng: Yeah.

[00:10:11] Gareth Jenkinson: Yeah, I look forward to chatting to him when he does get out. Your future prospects for Binance? Where do you see the business in a year’s time? I mean, a lot has changed. You’re nearly one year at the helm. It does seem like you slowed down a gear, which is probably a better thing, just considering how aggressively Binance grew. Has that been the approach for you? Like, hey guys, let’s slow down a bit here and just be a bit more thoughtful about where we’re going and what we’re doing?

[00:10:32] Richard Teng: Not really. I don’t think we have slowed down. So, but what has changed, right, so if I can bring you through... I mean, CZ was the founder, CEO. He was a charismatic, inspirational leader for the company. But when I took over, the landscape for crypto has changed. When he started the firm in 2017. The landscape is one where regulators are not regulating this space, right? There’s no particular interest. Institutions are not partaking in this space. But I took over end of last year. And as I mentioned, 2024 has been a landmark year. You see clearer rules and regulations around the world. Close to one-third of regulators now are regulating this space.

If you look at the top 100 financial institutions around the world, everyone has a crypto agenda now compared to two years ago. Larry Fink, the largest asset manager, money manager, went from a crypto skeptic to a crypto believer and supporter. So, it’s a landmark shift on that front, right? So, I mean, the Binance today operate in a very different environment, so we have to change with that. So, today, instead of a founder-, CEO-led company, we are a board-led company. So, we have seven directors on board. I work very closely with the board of directors to map, to chart the strategy going forward. But our pace of growth is very fast, right? If you look at globally, I mentioned that we are now the most licensed exchange globally. We have secured India, which is one of the largest marketplace that you can have. And before that, Indonesia, again, the largest Muslim country in the world. So, we continue to deploy globally. We continue to push forth, and we are very grateful to our users for their continued trust and support. And we hold that trust in the highest regard. So, we want to make sure that we build the best platform with the best product features.

So if you look at it throughout the course of this year, we continue to roll out, you know, new things to really support our users in their journey, right? From things like Web3 wallet to Megadrop to copy trading to Super Earn to Binance Grid, and that list goes on. And we take our users’ feedback very seriously. There’s a channel where users can go through and give us those feedback, and we evaluate those very carefully to see which other things can we introduce to really support them in their users. So, we’ll always be a user-first organization, but we are also investing very heavily into compliance. So, it’s a user-first, compliance-first organization because that’s the change in landscape that we are seeing. Direction of travel is very clear. Going forward, there’s going to be more needs for compliance.

So, we have invested heavily in compliance, as I mentioned. Our headcount in compliance will continue to go up. Our investments will continue to grow. But if you look at the different dimension of that, we have the financial ability to invest very heavily in compliance. Some other players don’t. So, we intend to make it as a competitive advantage as the landscape shifts on that front, right? So, that’s a key competitive advantage for us, other than us being the largest Web3 ecosystem in the world now, yeah.

[00:13:33] Gareth Jenkinson: Lastly, just on a personal note, are you enjoying life as CEO? How are you finding the work-life balance? I asked you this a year ago, and I think a lot has changed.

[00:13:42] Richard Teng: First of all, I’m very privileged. I’m very honored that CZ and the other co-founders nominated me for this role. And I’m very privileged that I have a strong team in terms of the management level that really support me. So, it’s not a one-person shop, right? It’s a team effort, right? We have an extremely strong team at the management level. We have dedicated staff throughout the world. Today, we have about 5,300 staff globally. We’re adding at least another 1,000 headcount before the end of the year. So, we’re expanding very, very quickly. Then that demonstrates our bullishness for this sector. We continue to deploy. And I always firmly believe that 2025 is going to be a better year than 2024, right? So, we continue to look at the future. So, my work is made easier by an excellent team I’m working with.

[00:14:30] Gareth Jenkinson: Richard, thank you very much for your time. It’s always good to chat to you, and hopefully we don’t wait another year until we sit down and chat.

[00:14:35] Richard Teng: Absolutely. Look forward.

[00:14:36] Gareth Jenkinson: Thank you very much.