Dialogue He Yi: Binance's core strategy this year is to promote compliance globally

Original Author: Timmy Shen, Forkast Journalist

Original Title: “Yi He: Binance will take the arrows for industry compliance, security”

Translation by: Hu Tao, Chain Catcher

Where will you set up headquarters for Binance? Have you shortlisted any locations?

For Binance, having a physical headquarters is not the foundation for keeping the company running smoothly. However, as global compliance matures, establishing a headquarters can help our industry develop in a clear direction. If there is a headquarters that can ensure smooth operations for users and assist with compliance, we are willing to set up one or more headquarters globally.

What is Binance's core strategy for 2022? Are you planning to focus more on compliance?

The core strategy for 2022 remains the company's push for compliance globally, and we are making some good progress. We are significantly expanding our compliance team to recruit professionals and pursuing 100% completion in our platform's "Know Your Customer" (KYC) efforts. At the same time, we are also providing blockchain development consulting services in multiple countries and regions to support industry development.

What are your plans for Forbes after the $200 million strategic investment? Do you hope it will cover more stories related to cryptocurrency and blockchain?

Forbes is one of the most influential and innovative media outlets globally, and both Binance and Forbes are not satisfied with achievements in just one area; they aspire for greater success. We have also noticed that Forbes has a much higher enthusiasm for Web 3.0 than most traditional companies and has had a separate blockchain reporting department very early on. They know where the trends are heading.

Can you share how big Binance really is? How many employees do you have, and where are they located?

Currently, we have over 3,000 employees globally, distributed across various countries and regions.

In the recruitment process, we mainly look at their skills, such as language abilities, and whether the candidates are stronger in branding, operations, or information technology. That is to say, we primarily assess candidates based on their capabilities rather than their locations. After all, we have never really had a physical office.

At present, when we apply for licenses in a certain country or region, we start to establish offices there as part of that process. If we find that there is a shortage of personnel in some countries and regions, we will recruit more people in those areas to serve those markets, such as Europe, Southeast Asia, and the Middle East.

What measures has Binance taken in compliance over the past year?

In terms of compliance, many external voices are asking whether Binance is under regulation or facing regulatory pressure, and whether Binance is very concerned about it. But in fact, internally at Binance, we believe that regulation is beneficial. You could even say that it is something we have been waiting for.

From an insider's perspective, you will see that if the industry is small enough, no one cares about you. Only when the industry grows large enough and more participants are involved will regulators pay attention.

Can you elaborate on your compliance approach?

Let me give you an example. From the very first day Binance was established, we had strict internal regulations to govern insider trading. Initially, we required employees to have at least 30 days of tenure. Later, we extended that requirement to 90 days. We also have very strict firewalls for managing internal information. We have learned a lot from past hacking incidents and have established a zero-trust principle [a security model that assumes nothing can be trusted unless proven otherwise].

You will find that our monthly costs related to anti-money laundering and KYC are actually higher than our marketing costs. It is difficult for small companies or early-stage startups to bear such expenses. However, Binance has moved past its early development stage and has accumulated rich preparations in security management, anti-money laundering, KYC, and more.

It can be said that in this industry, no trading platform does better than Binance in terms of anti-money laundering, KYC, security, and other aspects.

How large is your team in mainland China?

Binance did have an office in China in 2017, but the local government indicated that they did not welcome digital currency trading. So we moved the office out of China. At that time, some colleagues left the company under policy pressure, and we deeply empathized with that; some colleagues also moved out of China.

We have invested in some companies in China, and sometimes we are confused about whether these companies are part of Binance. In fact, these companies are purely investments, and we have no offices in China.

Where are you now?

In fact, I am on the move. After leaving China in 2017, I have lived in Japan, Europe, the United States, and Southeast Asia. If we stay in touch, you will find that I will be in a new place next month. I will be living in the Middle East and Europe for a while.

You were previously a host of a travel show on television. Can you tell us about your career path? When and how did you enter the crypto world?

Before entering the blockchain industry, I tried many things. Being a live host was not my dream job, nor was it something I wanted to dedicate myself to. I did it for about two years. It was just a way to have fun. I felt anxious because I saw the influence of the television industry gradually being eroded by the internet. About ten years ago, the entire traditional media industry was declining while the internet was developing rapidly.

At the end of 2013, when the price of Bitcoin rose to 8,000 yuan (1,300 USD), a friend of an investor asked me to help promote a Bitcoin advertisement. At that time, I was very interested in entrepreneurship, and to showcase my value, I did the advertisement for free. In the process, I learned about a new business model around trading platforms where you could register an account and trade Bitcoin.

In the spring of 2014, I joined the cryptocurrency trading platform OKCoin. It was a hasty decision, but I thought it was a great opportunity. During that time, I met Zhao Changpeng and invited him to join the company. Within a year, the company grew rapidly, but as the company developed, the views and values of the founders and co-founders diverged, realizing that their goals might be different, so Zhao Changpeng and I left.

Then I joined a company called Yixia Technology. They had a short video application called "Xiaokaxiu," which was quite popular at the time. It was somewhat like TikTok. I stayed there for less than two years before launching "Yizhibo."

By 2017, I felt that I had reached the ceiling for marketing and branding in China. Zhao Changpeng began preparing to launch Binance. When they were drafting the white paper, he asked me if I could serve as an advisor.

Before Binance officially launched, Zhao Changpeng asked me again if I would consider joining. On the evening of July 13, the day before the official launch, Zhao Changpeng said, "We are launching tomorrow, and the price of BNB may increase tenfold, then the offer I give you will be one-tenth of what it is now. You must decide now whether to join us." So that day, I agreed to join Binance.

I officially started using Binance in August, but a few weeks later, on September 4, China began banning Bitcoin trading. When I saw the news, I thought, "Well, I just need to keep working hard."

We had to deregister some users in China. We proposed to buy back BNB from Chinese users at around 8 yuan, which was the market price, instead of the issuance price of 1 yuan. This is why Binance was able to make a good impact and receive positive feedback at that time. Many other projects would only return funds at the issuance price, regardless of whether it went up or down. Although we might have to pay eight or nine times the issuance price, we still paid it. At that time, we almost exhausted all of Binance's liquidity to buy back BNB.

In hindsight, we made some tough decisions.

Ningwei Qin and Tom Zuo contributed to this report.