Author: flowie, ChainCatcher
After 4 months in prison, CZ is expected to return in a few hours. This Chinese entrepreneur has led Binance to become a global great company and has officially overcome his first inevitable "calamity" in the process.
Looking back at November 22nd last year, CZ pleaded guilty and resigned as CEO of Binance, accepting a record-breaking fine of over 4 billion dollars, causing a stir in the crypto market.
But with CZ and Binance's admission of guilt, the crypto market has officially ended the era of chaos. Shortly after, the US Bitcoin spot ETF and Ethereum ETF were approved, and the new crypto elite demonstrated their financial power in the US election, making crypto no longer a niche market.
During CZ's nearly one-year absence, Binance and the entire crypto market transitioned from chaos to strong compliance, from the fringes to the mainstream.
Under the leadership of He Yi and the new CEO Richard Teng, Binance's business has steadily grown, with its historical trading volume surpassing 100 trillion dollars in September for the first time.
However, everything has not been as smooth as expected. Faced with the rapidly changing crypto market, Binance inevitably experienced confusion in its strategic direction and faced significant controversy over its listing strategy.
The fate of Binance is a microcosm of the crypto industry. Hope and confusion are intertwined as the crypto market transitions between old and new cycles.
Although the massive influx of funds from Wall Street briefly pushed Bitcoin above $70,000, crypto innovation seemed unable to keep up with the pace, and participants such as project teams, VCs, and retail investors did not enjoy the same prosperity as in the previous bull market. This crypto bull market has been criticized as a false one.
As the Federal Reserve begins its interest rate cut cycle, CZ's return as a crypto icon could inject confidence and innovation into the confused crypto market once again.
Binance is no longer in chaos, crypto has entered the era of strong compliance
After CZ's resignation, the heavy regulatory hammer on Binance has not stopped. Earlier this year, Nigeria announced that Binance was suspected of engaging in illegal financial transactions on its platform and detained Binance executives Tigran Gambaryan and Nadeem Anjarwalla, accusing Binance of contributing to the collapse of the country's fiat currency.
However, the successive regulatory pressures have forced Binance to transition from chaos to full compliance.
In addition to Richard Teng, who has thirty years of experience in financial services and regulation, taking over as CEO, Binance has also seen changes in several high-level positions such as Chief Marketing Officer, Chief Strategy Officer, Head of Product, Vice President of Custody Business, and Vice President of Compliance.
Binance has made unprecedented investments in manpower and financial resources for compliance.
According to Bloomberg, Binance plans to recruit many of the 1,000 employees it plans to hire this year in the compliance field, with an annual compliance expenditure exceeding $200 million.
Richard Teng also stated that the plan is to expand the compliance team to 700 people by the end of 2024, and the company is also continuing to strive for the establishment of a global headquarters.
Not only Binance, but under stronger regulatory pressure, other exchanges or leading projects also consider compliance as the most important development strategy. Regions such as Hong Kong are actively promoting the establishment of licensed exchanges in compliance.
On the other hand, the regulatory pressure has also led to crypto entering the mainstream.
On one hand, the approval of Bitcoin spot ETF and Ethereum ETF in early and mid-2024 respectively, and the entry of Wall Street forces have led to a flurry of activity. Wall Street financial giants led by BlackRock have not only been positioning themselves in assets such as Bitcoin and Ethereum, but have also been experimenting with crypto innovations such as RWA.
On the other hand, under the pressure of regulation, the new crypto elite are no longer sitting idly by. They have influenced US politicians' attitudes towards crypto assets by providing campaign funding to crypto-friendly candidates.
The donations to crypto in the 2024 US election far exceeded those in the previous election cycle, to some extent shaping the public appearances of candidates such as Trump, Biden, and Harris. The 2024 Bitcoin conference has also transformed from a technical forum into a political stage.
However, as the wild era of chaos comes to an end and more professional players from traditional markets enter the crypto mining team, the way of playing in crypto is also changing, and Binance and the crypto market are inevitably experiencing growing pains.
Controversy surrounding Binance, confusion in crypto
Compared to the record-breaking fine of over 4 billion dollars, the crypto community was more concerned about the impact of CZ's departure on Binance's future development. However, it has been proven that under the leadership of He Yi, who is also CZ's wife, and the new CEO Richard Teng, Binance has maintained its strong position.
It still holds the top spot in terms of trading volume and user base. According to CoinGecko data, Binance's 24-hour trading volume exceeds 17 billion dollars, with a monthly visit count of over 53 million. CoinGecko's Q2 report shows that Binance's market share in Q2 was approximately 44%, slightly lower than the same period last year, but still ranking first.
He Yi's role as "Binance's biggest customer service" was fully demonstrated during CZ's absence. Compared to CZ's time, Binance has directly addressed almost every key point of market doubt, contributing several thought-provoking crypto essays to the crypto market.
However, in the past year, Binance's controversies have never ceased. In terms of business strategy, the popularity of the Bitcoin ecosystem at the end of last year led to a battle for traffic and Web3 wallet among various CEX platforms.
Faced with rapidly changing new things, He Yi revealed in an AMA that Binance also found it difficult to judge the future heat, leading to insufficient investment. Binance was also criticized for not entering the Web3 wallet market faster, resulting in unsatisfactory user experience.
In addition to business strategy, the biggest controversy Binance faced during CZ's absence was related to listings.
From "bestie coins" to VC coins and meme coins, Binance has been embroiled in controversy multiple times, with He Yi responding to listing debates at least five times through essays or AMAs.
The "bestie coin" can be said to be a legacy of CZ's era. However, this year, Binance's involvement in VC coins and meme coins has exposed the collective confusion of Binance and even the entire crypto market.
The VC coins have driven the prevalence of high FDV and low circulation token models this year. These tokens generally experienced price weakness after TGE. According to data compiled by crypto KOL @Ryanqyz_hodl, most tokens listed on Binance in 2024 experienced significant declines after TGE.
Data source: @Ryanqyzhodl_
Whether it's VC coins, mini-games on TON, or meme coins, all projects have taken an extreme approach, all for the sake of being listed on Binance.
However, if users cannot make money, it is inevitable that Binance will face criticism. Binance subsequently led the way in adjusting its listing strategy, sparking collective reflection in the crypto market. The crypto community has generally realized that the crypto industry has fallen into a vicious cycle of creating fictional stories and only wanting to sell coins.
Although the controversy surrounding high FDV tokens has subsided, Binance's recent listing of meme tokens has once again sparked controversy. While memes are good, they cannot be just memes. When will the crypto market transition from a PvP (cutthroat) mode to a PPP (mutual assistance) mode?
Everyone misses the CZ era, but history moves forward
As Binance and the entire crypto market grapple with controversy and confusion, the announcement of an interest rate cut by the Federal Reserve and CZ's return may inject new confidence and vitality into the crypto market. The activity of the BNB chain and CZ's release concept meme coins before his release from prison is evidence of this.
Although CZ is still prohibited from participating in the daily operations or management of Binance, as the founder who led Binance's glorious 7-year history, he still holds significant influence over Binance's future.
CZ's influence is not limited to Binance. In addition to the new impact Binance will have after CZ's return, CZ himself, as one of the crypto icons, with his global vision and experience through market cycles, may also bring new perspectives to the new crypto cycle.
However, for Binance and the crypto market after CZ's return, there are also many challenges. The crypto cycle has changed, and the logic and methods are also evolving.
As CZ led Binance from a workshop to the world's largest crypto exchange, it was also the period of the fastest growth in the crypto industry. Perhaps everyone misses the innovative wealth myth brought by the early niche market and macroeconomic double blessing of IEO and other models during the CZ era. However, as He Yi lamented in the new article "If We Disagree, Maybe You Are Right," this was more of an early niche market and macroeconomic double blessing.
During CZ's retreat, the crypto industry has reached a new critical juncture.
He Yi has always said that the global economy is entering a new cycle, with consumer downgrading worldwide, and more traditional players joining the mining team. Although it is true that the big players have arrived after the stable expansion of the trading volume of traditional finance-related crypto products, the way they have arrived is not the brainless capital takeover that everyone imagined.
In addition, crypto innovation still faces a balance or even compromise under the trend of compliance. Both Binance and the entire crypto market are facing a more complex environment in their pursuit of stability, innovation, and growth. It may be more difficult to replicate the hundredfold and thousandfold growth of the CZ era.
But on the other hand, after the bubble of storytelling and coin selling has been burst, crypto may not just be about trading technology, but about returning to the essence of business and value-driven. Blockchain technology may gradually focus on serving the real needs of the majority and entering ordinary households.
With CZ's return, we look forward to Binance's continued pursuit of stability and change, and we also look forward to the crypto industry moving forward.
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