Exclusive Interview with Catherine Chen, Head of Institutional and VIP at Binance: The "Next Step" for Binance in the Post-CZ Era

Author: Raymond, BlockBeats

Another year of Binance Blockchain Week has come to an end, and Bitcoin has strongly set a historical high after Trump's election expectations materialized. With significant volatility and excellent sentiment, the biggest beneficiaries are, of course, trading platforms.

As the world's leading cryptocurrency trading platform, any operation by Binance has a significant impact on the industry. In terms of trading, besides the large retail investor base, institutional investors are also a crucial part, and for Binance, institutions are, to some extent, even more important than retail investors.

To understand the operations and thoughts of institutional investors, BlockBeats had a chat with Catherine, the head of Binance's institutional and VIP business, during the Binance Blockchain Week. Catherine has extensive experience in traditional finance, having worked at both Morgan Stanley and JPMorgan, and joined Binance in 2021 to oversee institutional and VIP business, participating in several innovative projects such as "Binance Wealth."

In the interview, Catherine introduced the operations of Binance's institutional and VIP business, and shared with us the changes at Binance in the post-CZ era, the impact of the elections, and the institutional perspective on crypto.

Why choose Binance? What are institutions and VIPs doing?

In every bull and bear cycle, countless industry elites from traditional finance are attracted by the charm of crypto, whether they are well-known multinational financial giants or practitioners in various financial fields. The entire crypto space has become even more vibrant with the addition of these traditional industry elites. From Morgan Stanley to leading Binance's institutional business, Catherine is one of those who have "crossed over."

BlockBeats: You previously worked at top traditional financial institutions Morgan Stanley and JPMorgan (both companies originated from J.P. Morgan but were split into two independent companies in 1935. Morgan Stanley became an investment bank, while J.P. Morgan turned into a pure commercial bank and developed into what is now JPMorgan. Among them, Morgan Stanley is referred to as "Da Mo," and JPMorgan as "Xiao Mo"). Can you introduce your background and experience?

Catherine Chen: Many people who come from traditional finance to the crypto space usually have two common backgrounds: one is in foreign exchange, and the other is in derivatives. I have always dealt with derivatives, so for those of us in derivatives, "cryptocurrency" is a concept that is easy to accept and understand. I actually knew about cryptocurrencies quite early on, but I only decided to fully immerse myself in this industry in 2020. This is largely related to my professional background; those who work in derivatives are more likely to embrace crypto.

However, I might be a bit different from the typical traditional finance professionals. I actually do not engage in trading activities, such as placing orders in a trading room. I have always played the role of a "micro-entrepreneur" in the company.

When I was interning at JPMorgan, they wanted to enter the insurance market in Taiwan but were unwilling to spend a lot of costs or take high risks to explore. So they handed this task to me, just an intern. From that moment on, I have been working on "market development and product innovation," successfully launching the first annuity-type product in Taiwan.

Later, in 2014, I joined Morgan Stanley, which was the market leader in cash equity trading, but its derivatives business was not even in the top ten. At that time, they recruited me to manage and oversee the growth of Morgan Stanley's entire derivatives business. I indeed went on to develop the derivatives market in Taiwan and then expanded to the Greater China region, achieving outstanding results. Before I officially joined Binance, I was responsible for all of Morgan Stanley's business in Greater China, except for cash equity, and during my tenure, I continuously launched new products and services.

BlockBeats: What factors prompted you to come to crypto and join Binance?

Catherine Chen: The reason I left traditional finance for crypto is that I felt there was a lack of innovation in banks, and there was extreme risk aversion towards new business ventures. In the first five years at Morgan Stanley, I was able to successfully implement new businesses, and I helped the bank complete several projects. However, later on, it became very difficult to push new projects forward. Committees in banks need to consider various issues, and no one is willing to lead or make decisions on new businesses. Everyone is reluctant to take on the responsibilities and risks that come with new ventures. You face endless committee negotiations, risk control, compliance, and legal issues, making it impossible to achieve true innovation in traditional industries.

I am very clear that I enjoy building and pushing new businesses. I want to pursue a "sense of being alive" and experience a rich life. However, in banks, it is a top-down constraint. So I resolutely decided to leave traditional big financial institutions and immerse myself in crypto with my passion. I want to be part of the future, not the past!

BlockBeats: From your perspective, what are the differences in investment preferences between retail and institutional investors?

Catherine Chen: Allow me to first introduce Binance's VIP Program. At Binance, all systems, departments, and activities are very transparent, including the VIP Program that I oversee. Binance VIP is divided into different levels from 1 to 9, with various criteria for classification. Ordinary users (i.e., retail investors) are at level 0, and essentially anyone above that can be considered a VIP. Whether you are an active trading user, a large holder, or investing in Binance products, or engaging in lending on Binance, as long as you meet the threshold standards, you can become our VIP.

In levels 1-3 of VIP, we refer to them as high-net-worth clients. Many people do not know that, for example, holding $100,000 plus a certain amount of BNB can qualify you as VIP 1. From VIP 3 onwards, there will be more institutional clients, and at VIP 8 - VIP 9, there will be many high-frequency trading institutions.

So what is the biggest difference between institutions and retail investors? Institutions typically use programs or APIs for trading, while retail investors do not have a technical advantage and usually trade on their phones. The vast majority of ordinary trading users typically engage in swing trading, new coin offerings, and wealth management, with relatively simple investment behaviors. Institutional users have a more diverse participation approach; in addition to pure trading, they also engage in lending and other investments to maximize capital utilization.

Global Regulation from Binance's Perspective After the Elections

The bull market cycle of 2024 is initiated by the narrative of Bitcoin ETFs. After positive developments, regulation has become the first hurdle for cryptocurrencies to integrate into mainstream markets. Whether it is the SEC's FUD on certain tokens or the successive approvals of ETFs, regulation and crypto assets seem to be a pair of happy adversaries. Meanwhile, Trump's victory as the first "Bitcoin president" in history signifies an acceleration of digital currencies' integration into mainstream assets. Catherine provided us with the institutional perspective on regulatory issues, believing that regulation of crypto is a positive development, and Binance will actively cooperate with and embrace regulation.

BlockBeats: Currently, Bitcoin and other mainstream cryptocurrencies are gradually being accepted by traditional markets. What is your view on the current regulatory issues facing Binance and crypto assets?

Catherine Chen: With the approval of the BTC ETF, regulation is an inevitable path for cryptocurrencies. Certainty in regulation and a clear regulatory framework are necessary. I believe the crypto industry has reached this level, and if it is to continue to shine, embracing regulation is an inevitable choice.

For Binance, we are also actively obtaining licenses in various regions. The certainty of the regulatory framework is very necessary. Moreover, as a global exchange, compliance is crucial. If Binance wants to serve the next billion-level users, we need to provide them with regulatory trust.

Some government officials originally did not fully understand crypto, but since they have taken this step towards regulation, it shows they are willing to understand and accept crypto. Overall, regulation is a good thing for the crypto industry.

Binance is definitely embracing regulation and compliance, and we are actively doing this. As of now, we have obtained licenses or registrations in 20 jurisdictions worldwide, ranking first among all centralized crypto asset trading platforms. We hope that more friendly regulatory measures can be introduced in various regions. Facing increasing regulation and legislation, I believe this is a process of "educating" the traditional Web2 market. Currently, there are still more native players in the crypto industry, and we are actively collaborating with regulatory bodies, hoping to bring more people from outside the industry into Web3 to explore new territories!

BlockBeats: The biggest narrative currently is the U.S. elections, and the market is looking forward to the benefits that Trump's victory might bring. What adjustments do you foresee in regulatory direction if Trump wins? What impact will it have on Binance?

Catherine Chen: Regardless of who is elected, Binance will continue to invest in compliance. Because compliance and regulation are not only important for Binance but also for the entire industry. Everyone is saying that the next era will be that of institutional investors, and if Binance does not solidly comply and reach the same level as traditional finance, it will be difficult to gain the trust of traditional investors.

Of course, Trump has shown a friendly attitude towards cryptocurrencies in some public occasions, and we are optimistic about that. If Trump ultimately wins, we hope his statements will be consistent. Overall, we are very much looking forward to it, but for Binance, regardless of who is elected, our path remains steadfast.

What Changes Has Binance Experienced in the Post-CZ Era?

BlockBeats: CZ can no longer participate in the operation of Binance. What do you think are the differences between Binance in the post-CZ era and before?

Catherine Chen: I personally miss my boss very much. However, Binance is different from many other exchanges; we started internationalization very early and brought in many non-OG talents for development. I have been with the company for three years; I decided to leave traditional finance in 2020 and joined Binance in 2021. The company's level of internationalization is already very good, and we are continuously bringing in experienced talents.

In my past three years:

First, the company's "core values" are very clear and have been consistently upheld from the early years to now. This "core value" is inheritable and will not disappear because of the departure of the founder or boss. Importantly, most of Binance's early co-founders are still with the company. This is something I find very admirable because, honestly, they have long achieved financial freedom, yet they are still here, working for BNB holders, because everyone feels there is still a common goal to strive for. So even though the boss cannot return to lead the entire organizational structure, under the leadership of a professional executive team, the core values established at Binance will continue to be passed down.

Second, the company has actually been internationalized for a long time and has brought in a diverse range of professionals. After I joined Binance, I essentially transitioned from traditional finance. The bosses appreciated my experience in traditional financial institutions, saying, "Binance needs talents like you to lead the entire VIP and institutional business." In fact, at that time, the company already had a very good elite talent pipeline.

So honestly, after CZ's departure, there hasn't been much change at Binance. We will not stop moving forward because of CZ's departure.

BlockBeats: As a leading exchange in the industry, what social responsibility do you think Binance bears?

Catherine Chen: I believe the first thing we need to do is "lead by example." This is why Binance is currently taking the lead in compliance; we hope to establish the true golden standards of the market.

At the same time, whatever Binance does today, we deeply understand that we are responsible to our vast user base. So I believe everyone can see that whether it is launching new products or various activities, we are well aware of our social responsibility to our users. Moreover, as a leading exchange in the market, we need to be even more cautious. Currently, Binance's main focus is on how to ensure the industry has the next 50 years or 100 years.

Binance's ambition is not just to be the leader of this industry, even though we already are. But we need to promote the entire industry to the next stage and make it bigger. Binance will not stop innovating just because we have grown; we are always thinking about how to bring more investors into the crypto asset investment field and provide them with a smooth transition process.

For example, we launched "Binance Wealth" on October 29. The launch of "Binance Wealth" aims to bridge the gap between cryptocurrencies and traditional finance. For a long time, the private wealth sector has lacked access to the traditional infrastructure of cryptocurrencies. Binance Wealth will lower the entry barriers for more market participants to enter this new asset class. In the context of "unlocking capital inflows is key to making crypto assets mainstream," I believe "Binance Wealth" has actively pushed the industry forward.

These are all things that no one has done before; we have been striving to timely launch the product solutions that the industry and market need.

BlockBeats: From the perspective of institutions and VIPs, how do you view the future development of Bitcoin?

Catherine Chen: From the perspective of institutional clients, I think Bitcoin's positioning is still quite clear. Bitcoin is the most widely recognized investment target in the entire crypto industry, and in the eyes of large institutional investors, its positioning is "digital gold," serving as a tool for risk diversification. From the perspective of institutional investors, I believe it will continue to move in this direction.

Although everyone is currently working hard to give it more value applications, there are indeed many ecosystems, and many capable people are building, but I still think the "outcome is uncertain," which is worth paying attention to. If Bitcoin can find native applications, that would certainly be even better. However, from the perspective of institutional investors, there should not be too much change. Bitcoin is typically used as a risk management tool to provide different performance returns in institutional investors' portfolios.

Bitcoin is not highly correlated with many mainstream assets and has the characteristic of 24-hour trading. The 24-hour trading feature allows institutional investors to better coordinate their investment portfolios and manage risk during traditional market weekends when the markets are closed.

Regarding Bitcoin's future, although I am not a crypto OG, I am firmly optimistic about Bitcoin's future.