AII-In Podcast Interview with Binance Founder CZ, Detailing the FTX Incident

The latest episode of The All-In Podcast features an interview with Binance founder and former richest Chinese person, CZ CZ. The interview covers in detail the background and investment details of FTX and SBT, the lawsuit with the US government, his life in prison, and his views on privacy issues in AI and blockchain. The following is an excerpt of key points, which I have also transcribed verbatim .

CZ, the richest man in Hong Kong, had a childhood.

CZ stated that his father went to Canada to study in 1984, five years before the Tiananmen Square incident. His father first studied at the University of Toronto and then transferred to the University of British Columbia (UBC) in Vancouver, after which the family began applying for immigration. CZ was only 12 years old at the time, and although he may not fully understand the political and social changes, he mentioned that he grew up on the campus of the University of Science and Technology of China, where university students frequently discussed democracy and social issues. Even with limited understanding at the time, this atmosphere likely subconsciously influenced his values ​​and way of thinking.

To help support his family, CZ started working at McDonald's at the age of 15. The minimum wage at the time was 6 Canadian dollars, but McDonald's had a special exemption, so the actual hourly wage was 4.5 Canadian dollars. This experience also shattered the stereotype of CZ; he wasn't a genius engineer who had been immersed in the world of programming since childhood. CZ admitted that he only became interested in programming in high school, considering himself a decent engineer, but not a top genius.

After securing an internship during his junior year of college, he was unable to return to McGill to complete his studies due to repeated extensions of the work commitments. Later, because a bachelor's degree was required for a Japanese work visa, he obtained his degree through an online course at the American College of Computer Science during the dot-com bubble burst in 2000, officially entering the workforce.

Participated in the development of the Tokyo Stock Exchange's trading system

CZ's first major job was at Fusion Systems in Tokyo, where he worked on the development of the order placement system for the Japan Stock Exchange. This was also his first foray into the field of trading infrastructure. He recalls that initially it was just a simple job assignment, but he was quickly drawn to the field because of its extreme efficiency focus, striving to create systems with low latency, high stability, and high throughput. CZ said, "I'm an instinctively efficiency-driven person."

His main job was developing the order execution system, which is the foundational software for handling order flow and matching processes. CZ shared the core technical logic behind the trading system optimization at the time, focusing on software-level optimization:

• Avoid database queries
• All data is processed in memory.
• Reduce unnecessary calculations
• Simplify risk control logic

Hardware layer optimization:

• Using FPGA (a programmable chip on a network interface card)
• Reduce data transfers between the CPU and memory
• Reduce round-trip latency from approximately 100 microseconds to 20 microseconds.

Infrastructure layer optimization:

• Co-location of data centers
• shorten physical distance

CZ explained why they didn't further utilize custom ASIC chips: trading algorithms change too rapidly, and modifying ASICs is too costly. FPGAs offer the best balance between performance and flexibility. CZ's company was acquired by a NASDAQ-listed company around 2000 for approximately $52 million. However, serious cultural clashes soon followed the acquisition.

From Bloomberg to Starting a Business in Shanghai

In 2001, CZ began looking for a new job, and Bloomberg was hiring. He received an offer from New York while in Tokyo, but then the devastating 9/11 terrorist attacks occurred. After the attacks, CZ proactively called to confirm if the job was still valid. The other party asked, "Are you still willing to come?" He agreed without hesitation and moved to New York in November 2001.

He recalled that when he first arrived, the streets of New York were gloomy and relatively deserted, but the city quickly regained its vitality within a few months. CZ worked at Bloomberg for four years as a senior development engineer on the Tradebook Futures team, responsible for the development and optimization of the futures trading system. His career progressed quite rapidly, with three promotions in two years, and his team size expanded from an individual contributor to managing a team of 60-80 people.

In early 2005, CZ made another major decision: to leave Bloomberg and start his own business in China. At the time, he and several former colleagues from his time in Japan judged that China's financial market would develop rapidly, and Shanghai had the potential to become a fintech hub, bringing Wall Street trading techniques to the Chinese market. So, a team of six went to Shanghai to establish a fintech company. However, CZ later admitted that from a market and regulatory perspective, choosing Hong Kong might have been more suitable.

In their early stages, they quickly encountered policy restrictions. Foreign companies were unable to directly provide services to local Chinese financial institutions. Faced with limitations on their business model, the company was forced to rapidly transform into a comprehensive IT outsourcing service provider, undertaking various enterprise technology needs, including:

• Printer repair and basic IT support
• SAP system import
• Construction of automotive industry information system

Our main clients include large enterprises, such as:

• Shanghai General Motors
• Shanghai Volkswagen
• FAW

As the business expanded, the company later extended its presence to Hong Kong and began serving international financial institutions, including:

• Morgan Stanley
• Deutsche Bank
• Credit Suisse

Eventually, the company grew to about 200 people, and CZ worked there for eight years.

CZ's Origins of Contact with Bitcoin and Binance

In 2013, 36-year-old CZ first encountered Bitcoin. The opportunity didn't come from the tech industry or financial institutions, but from a poker party. Those present included:

• Bobby Lee, CEO of BTC China
• Ron Cao, Partner at Lightspeed

The next day, Bobby Lee suggested he invest 10% of his assets in Bitcoin. The worst-case scenario was a 10% loss, but if it increased tenfold, his net worth would double.

CZ did not immediately commit, but instead spent about six months conducting in-depth research and exchanging ideas with miners, engineers, and industry professionals worldwide. He even contacted friends in Taiwan who had previously worked at TSMC, who were then trying to develop Bitcoin mining chips; early participants such as the large Chinese miner "Shenyu" were also on his list of contacts.

A meeting of 200 people: Seeing the early signs of the industry

In December 2013, CZ traveled to Las Vegas to attend a Bitcoin conference with approximately 200 attendees. Attendees included:

• Vitalik Buterin (Founder of Ethereum)
• Charlie Lee (founder of Litecoin)

The market environment at the time was not optimistic; the Silk Road incident had just occurred, and mainstream media generally associated Bitcoin with crime. But what CZ saw was an early community of engineers and tech geeks, which made him more convinced of the industry's long-term potential.

Life only presents two major opportunities.

After completing his research, CZ made a crucial judgment: he had only encountered two fundamental technological waves in his lifetime.

• The first time was on the Internet (I was too young to participate at the time).
• The second one is Bitcoin.

He believed that a similar opportunity might not arise again for another 15 years. Therefore, he resigned from his job and made an extreme decision—to sell his apartment in Shanghai and invest the proceeds in Bitcoin.

From Wallets to Exchanges: Technological Gap Creates Entrepreneurial Opportunities

After entering the industry, CZ first joined the wallet company Blockchain.info, and then joined OKCoin at the invitation of He Yi as CTO, responsible for the development of the trading system. However, he left after only about eight months due to a mismatch between his direction and management philosophy. But this experience allowed him to observe a key market gap:

At that time, most exchanges had problems:

• System Unstable
• Slow matching speed
• Frequent downtime

And his past expertise was precisely:

• Low-latency transaction architecture
• Financial-grade system stability

This gave him an idea: to build his own exchange. In 2017, he raised approximately $15 million through an ICO, completed system development in six months, and officially launched in July 2017. However, the initial stages were not smooth sailing. In September, following the July launch, China banned cryptocurrency exchanges and ICOs, forcing them to relocate to Tokyo. The price of the BNB token initially fell by 30% to 40% from its ICO price, only recovering after about three weeks.

Binance's real breakthrough stemmed from three product advantages:

• High system stability
• Fast matching speed
• Fast listing speed and low transaction fees

Appearing on the cover of Forbes: The unreality of wealth

When discussing his views on success, CZ said that when the finance team reported company revenue reaching "several hundred bitcoins," his first reaction wasn't excitement, but skepticism: "This is impossible, we must have miscalculated." The team checked the data two or three times before finally confirming it was correct. For CZ, the strongest feeling at that moment wasn't success, but disbelief.

Another key period occurred during the BNB price recovery phase. The BNB ICO price was around $0.10, briefly dropping to $0.06, but market sentiment quickly reversed after He Yi joined and announced her involvement. They woke up to find the price had risen 20%. After a meeting, it rose another 20%. There were even multiple consecutive sharp increases in a short period; this rapid market pace gave the entire team a strong sense of bullish momentum.

Forbes Cover: The Unreality of Wealth

What truly cemented CZ's status as a billionaire was his cover story in 2018, when Forbes featured him. For CZ, however, was a source of disappointment: "When I look at my wallet, nothing has changed." He explained that his wealth wasn't accumulated gradually, but rather jumped directly from barely achieving financial freedom to becoming a billionaire, thus lacking the typical spending habits of a wealthy individual. Even during his company's rapid growth, he still habitually flew red-eye flights in economy class.

A function-oriented worldview: It doesn't matter if the house leaks.

CZ emphasized that money, for him, only means ensuring basic living needs (food, shelter) and providing a comfortable but not luxurious environment. He currently lives in an older house, either a third or fourth-hand property; the living room occasionally leaks, but it's just the right size for his family. His primary considerations were location and functionality. He describes his decision-making logic as function-driven: as long as the problem is solved, that's enough.

In terms of personality, CZ stated that his greatest characteristic is his low emotional fluctuation. He experiences happiness and sadness, but his emotional ups and downs are relatively mild. He is not easily overly excited by success, nor does he lose control under pressure. He believes that this low-amplitude trait helps him make stable decisions in high-pressure and rapidly changing industries.

The true reward of success is not money, but a sense of accomplishment.

Despite Binance's massive size, CZ's daily work remains highly intensive, involving approximately 20 meetings and calls daily, handling unexpected decisions, and maintaining community engagement. He emphasizes that the true reward is not wealth or the company's growth rate, but the sense of accomplishment from solving problems. Regarding operational metrics, CZ's core philosophy is very clear: the most important metric is daily active users (DAU).

He believes that transaction volume and revenue are lagging indicators; the true value of a product lies in whether users are willing to use it daily. Even with zero revenue, as long as user growth continues, the company still has long-term value. Conversely, if a company excessively optimizes short-term revenue or profits, it may sacrifice long-term growth. His logic is that when hundreds of millions of people choose to use your product, it means you are creating value for them. If they are willing to pay transaction fees, it's because the platform offers higher returns.

Discussing the ins and outs of the FTX incident, from the first meeting with SBF to the falling out over investment.

CZ stated that he first met SBF in January 2019 at an event Binance held in Singapore. At that time, SBF had not yet founded FTX, but instead operated Alameda Research, a market-making and trading company. Alameda was a highly active player on Binance and displayed a high-profile style at the after-party. A few months later, the SBF team proposed a plan to collaborate with Binance to establish a futures trading platform, proposing a joint venture. Considering that Binance already had a user base while SBF was still an early-stage team, Binance initially declined the collaboration twice.

In late 2019, after FTX had officially launched and achieved a certain trading volume, the SBF team offered a more attractive deal: Binance would acquire approximately 20% of the equity at a discounted valuation, along with a token swap, exchanging BNB for FTT. CZ pointed out that at the time, BNB's liquidity was far higher than FTT's, but they ultimately decided to complete the transaction, becoming one of FTX's early investors.

However, shortly after the transaction, friction began to emerge between the two parties. CZ stated that he heard from the market and industry insiders that SBF had made negative comments about Binance in Washington and among US regulators. Simultaneously, FTX adopted an aggressive competitive strategy, poaching a Binance VIP account manager with five times the salary; this employee possessed information on high-net-worth clients. Subsequently, these clients received offers and incentives to switch to FTX. CZ directly contacted SBF to try and prevent similar actions, emphasizing that Binance was still a shareholder at the time and hoped to maintain the cooperative relationship.

He also mentioned that Binance did not want the market to be dominated by a single exchange, as competition among multiple platforms could actually reduce regulatory and public pressure on a single player. As FTX rapidly expanded in the market and reportedly raised $32 billion at a valuation of $32 billion, Binance decided to withdraw its investment in early 2021. It's worth noting that, according to the investment terms, Binance had a veto right over future funding rounds. However, CZ stated that he did not use this right to hinder FTX's development. Ultimately, the equity and asset transfer was completed in July 2021, a year and a half before the FTX incident.

CZ emphasized that Binance was unaware of any subsequent risks or problems with FTX when it withdrew. He also denied market claims that "FTX's problems stemmed from Binance's withdrawal." CZ stated that despite holding equity, he never requested to review FTX's financial statements, nor did he intervene in its operations, given the competitive nature of their businesses. This implies that Binance had no control over FTX's internal financial operations and risk profile.

The US government's prosecution and imprisonment process

CZ stated that regulatory pressure began as early as 2021-2022, when the US government started making numerous information requests to Binance, which the company consistently complied with. However, by the end of 2022, the attitude had clearly hardened. By early 2023, the situation was quite clear: if an agreement could not be reached, Binance would face legal action.

At the time, CZ was frequently commuting between Abu Dhabi and Dubai, and was under immense pressure. He assessed two extreme scenarios:

• Best-case scenario: Pay the fine, obtain a deferred prosecution agreement, and the case is closed.
• Worst-case scenario: Criminal prosecution and possible imprisonment.

Another option was to remain in the UAE (a non-extradition country), but this would bring long-term travel restrictions and international legal risks, and could even put political pressure on the local government. CZ ultimately chose to face legal proceedings rather than remain in a state of legal uncertainty for an extended period.

During the negotiations, CZ spoke with 12-20 lawyers almost daily and negotiated with the U.S. Department of Justice (DOJ) for over a year. He relayed a lawyer's assessment: "We have never seen the government take such a tough stance in a case like this." CZ explained the case's level:

• First level: Violating the Bank Secrecy Act (BSA) by not registering as a financial services institution in the United States but serving U.S. users.
• The second layer: Insufficient KYC/AML mechanisms (but this is a matter of degree, not a matter of their existence).
• Higher level (not established): knowingly assisting illegal transactions, or personally participating directly in the handling of funds.

CZ emphasized that he never directly handled user transactions, and the case failed to point to any specific illegal transactions. The government attempted to add two aggravating circumstances to claim personal responsibility, but due to lack of evidence, the court ultimately rejected these claims. The case took a turn after CZ decided to travel to the US to plead guilty. Initially, the trial judge agreed to allow him to return to the UAE to await sentencing, but the government unusually appealed, ultimately leading to a court ruling that he must remain in the US to await trial.

The government sought a 36-month sentence (twice the maximum sentencing guideline) before the sentencing on April 30, 2024. Meanwhile, political pressure in the US intensified. A week before the sentencing, Senator Elizabeth Warren publicly criticized the crypto industry and sent a letter to the Department of Justice. Ultimately, the judge ruled: four months in prison.

CZ frankly admitted that the hardest part wasn't the four-month prison sentence, but the security concerns, the unknown prison environment and personal risks, and the media pressure. After sentencing, several media outlets ran headlines like "The Richest Prisoner in American Prisons." He even contacted so-called "prison consultants," an industry that provides advice to those about to be imprisoned. The consultant reminded him of several key principles:

• Do not accept any items or help from unfamiliar prisoners.
• Because the other party may demand high returns in the future, or even threaten violence.
• Keep a low profile, live alone, and don't join gangs.

For a high-profile individual dubbed the "richest prisoner" by the media, the risk of extortion or targeting is a primary concern. CZ stated that the US prison system is far larger than the public imagines, with approximately 2 million inmates nationwide. The government's annual prison spending even exceeds its education spending. After being imprisoned, CZ discovered that one of the prison's operational logics is grouping by ethnicity: white, black, and Hispanic individuals are separated.

CZ originally qualified for a "minimum-security camp," typically used for white-collar offenders. However, due to his non-U.S. citizenship, he was ultimately placed in a low-security prison. This facility houses more drug-related and violent offenders, increasing the uncertainty surrounding his initial imprisonment. Overall, CZ reported no physical harm, fights, or extortion incidents.

She admitted that she had shed tears because she was not allowed to participate in Binance's operations.

According to the plea agreement, CZ is prohibited from participating in Binance's operations. He admitted, "Stepping down was really difficult; I cried about it."

He said the last time he truly shed tears was when his father passed away. However, after processing his emotions, he gradually shifted his mindset. No longer burdened by intense management pressure, he has more personal time and is turning to long-term, non-profit, and strategic work. He also half-jokingly remarked that if he had retired voluntarily, the outside world might have thought he "couldn't handle it anymore," but now, due to regulatory restrictions, the pressure from market interpretation has actually decreased.

Pardons: Presidential discretion without a clear procedure

Regarding obtaining a US presidential pardon, CZ stated that the process is actually quite vague. The basic procedure is:

• Hire a lawyer to write a petition
• Explain the case background and the reasons for the amnesty.
• Ultimately, it is up to the president to decide.

The effect of a pardon is to erase existing criminal records, restoring an individual's legal status to that of an "ordinary person." CZ believes that a pardon does not necessarily mean the case has been deemed a wrongful conviction, but rather depends on political and policy judgments. Regarding external speculation about whether he made any exchanges, CZ stated that he did nothing. He offered a more realistic interpretation: without a pardon, as the ultimate beneficiary of Binance (UBO), the company's development in the United States would be severely restricted.

Post-retirement focus: policy, investment, and ecosystem

Currently, CZ's time is mainly allocated to three areas:

1. Government advisor: Assisting countries in developing crypto regulatory policies.
2. Investment business (YZi Labs): Blockchain, AI, Biotechnology.
3. Ecosystem guidance: Mentoring the BNB Chain founding team.

New Core Program: Giggle Academy

CZ's most important non-profit project at present is Giggle Academy, an AI-driven free education platform.

Why pursue education? He cited data showing that globally, approximately 700-800 million adults are illiterate (two-thirds of whom are women), and about 500 million children are unable to attend school, totaling about 1.2 billion people lacking education. The problems mainly lie in the lack of schools in impoverished areas, excessively high education costs, and the limited efficiency of traditional education.

Despite his blockchain background, CZ stated that he will avoid issuing tokens in the long term because if tokens are introduced, users might be motivated to "mine rewards" rather than to learn. The platform would then be dominated by speculators, making it impossible to assess genuine learning needs.

Blockchain will be the native payment channel for AI agents.

If the internet and Bitcoin represented the first two technological waves in CZ's life, then AI will be the third structural turning point. In this wave, the biggest users of cryptocurrencies may no longer be humans, but AI agents. Chamath points out that once AI enters the embedding layer, its operation no longer relies on human language, but is based on a machine-readable vector semantic space. This means:

• AI can directly traverse the information structure.
• Autonomous query, decision-making and execution tasks
• Forming highly automated production and service processes

This capability makes AI agents natural "economic agents." CZ says that in the future, behind every individual, there will be hundreds, thousands, or even millions of agents working for you. These agents will continuously execute various transactions, such as: purchasing airline tickets and booking seats, reserving restaurants and hotels, purchasing content or services (micropayments), automatic price comparison, and fund allocation. The transaction frequency of these agents will be millions of times that of humans.

Why can't the banking system support the AI ​​economy?

According to CZ, there is a structural conflict between the traditional financial system and the agent economy:

• Identity issue: The bank requires KYC/AML, and the agent cannot provide legal identity.
• Account and tools issues: Unable to open an account, unable to hold a credit card.
• Performance issues: Traditional payment networks cannot handle high-frequency, micro-amount, machine-level transaction volumes, which makes the banking system unsuitable for the AI ​​economy in its design.

Within this framework, the role of cryptocurrency becomes clear: permissionless, programmable, supporting micropayments, and automating fund flows. CZ believes that as agents begin to operate at scale, they will naturally choose encrypted networks as their payment infrastructure. Despite this clear narrative, CZ also acknowledges that it is still in its early stages: commercial applications of agents have not yet been fully implemented, and dedicated payment and identity architectures are still under construction.

Bitcoin's structural contradictions: transparency vs. financial privacy

Chamath points out that one of his biggest concerns about Bitcoin is its lack of fungibility and privacy. CZ explicitly agrees. In theory, Bitcoin is designed to be pseudonymous, not directly linked to a real identity. However, in reality, all transactions on the blockchain are completely public and traceable. Once an address is linked to an identity (e.g., through KYC at a CEX), historical fund flows become completely transparent. This means that in practice, Bitcoin is closer to a monitorable asset than anonymous cash.

CZ emphasized that privacy is not merely about circumventing regulation, but a real-world security necessity. He gave the example that if a blockchain address is identified as a hotel's payment address, outsiders can infer that someone will be checking in there, potentially posing a physical security risk. This kind of issue is already widely understood in daily life, just as most people don't disclose their home addresses. In some countries, disclosing someone's address is even illegal. In other words, financial privacy is essentially part of personal security.

The issue of substitutability: Why is a public ledger unsuitable as "currency"?

Chamath further points out that Bitcoin lacks fungibility:

• The history of each Bitcoin is traceable.
• Funds from certain sources may be flagged or rejected.

Traditional cash (such as US dollars) has the following characteristics:

• Fully substitutable
• Untraceable historical uses

This difference, from a monetary design perspective, is a significant obstacle to crypto becoming an "everyday payment medium." Privacy issues also present challenges such as law enforcement needs, tracking illicit funds, and combating crime and terrorist financing. However, he believes the industry needs to find a balance: protecting the basic privacy of ordinary users while retaining necessary regulatory capabilities.

This article , an AII-In Podcast interview with Binance founder CZ, details the ins and outs of the FTX incident and first appeared on ABMedia .