The Power Dynamics of Binance: The Predicament of a 300 Million User Empire

Author: Lesley, ChainCatcher

Prologue: The Birth of a Coordinate

On January 5, 2026, at 4 PM (Beijing time), a seemingly ordinary moment marked the beginning of a new phase in the most dramatic power shift in cryptocurrency history.

On this day, Binance's global services were officially taken over by three licensed entities from the Abu Dhabi Global Market (ADGM): Nest Exchange Services Limited was responsible for the operation of the trading platform, Nest Clearing and Custody Limited handled clearing and custody, and Nest Trading Limited provided over-the-counter trading services. For the first time, this global giant, which once claimed to have "no headquarters," had a clear legal domicile.

It had been exactly one month since He Yi was appointed as co-CEO.

In this month, Binance experienced: an employee was suspended and referred for prosecution for using insider information to post content for personal gain on social media; a $100,000 whistleblower reward was distributed among five informants as per the rules; He Yi publicly admitted on several occasions that Binance had "poor coin listings, no wealth effect," "products were not good enough," "the gap in wallet products was obvious," "the organization became rigid as it grew," and "issues with talent iteration"…

From an era ruled by a single person to today's modern corporate structure with three entities, two co-CEOs, and a seven-member board, Binance took eight years.

But building the structure is just the beginning. The real question is: when individual will can no longer cover the whole, and the system has yet to operate coherently, what is this global behemoth with 300 million registered users experiencing?

The Gold and Shadows of the Centralized Era

In the summer of 2017, in an office in Shanghai, Zhao Changpeng (CZ) and He Yi began building Binance. At that time, no one could have imagined that this makeshift team would become the world's largest cryptocurrency exchange by trading volume within 180 days.

The early success of Binance was built on extreme efficiency—CZ's will was the company's direction, and those below were responsible for execution. There was no board of directors, no lengthy approval processes, and not even a fixed headquarters. The company moved quickly like a nomadic tribe, strategically shifting from China to Japan and then to Malta, always maintaining a fluid strategy.

This model created miracles. By the end of 2021, with the surge in cryptocurrencies like Bitcoin, CZ became the richest Chinese person with a net worth of $94.1 billion, briefly ranking among the world's top ten wealthiest individuals. Binance processed an average of $65 billion in transactions daily, capturing up to 70% of the market share.

But the other side of the miracle was the accumulation of systemic risks.

In the old era under CZ's control, in pursuit of extreme user growth, management often ignored compliance department warnings about "high risks," even demanding to "cancel KYC" to ensure users could start trading within ten minutes of registration. The marketing and growth teams ran rampant, and the compliance department was often seen as an obstacle rather than a protector.

A Reuters investigation revealed the cost of this culture: Binance admitted to prioritizing growth and profits over compliance with U.S. laws. Court documents showed that He Yi had participated in planning strategies to evade regulation. The internal decision-making logic of the company was simple and crude—anything that could bring users and trading volume was negotiable.

This model created astonishing growth in the short term but laid the groundwork for significant future risks.

In Binance's power structure, "listing rights" is a highly tempting piece of meat, directly related to immediately realizable wealth. As the world's largest exchange, Binance's user base and liquidity, along with its credit endorsement of projects, create a significant wealth effect; "listing equals soaring" was Binance's core weapon to outpace competitors in its early days.

For this reason, listing rights were highly concentrated and strongly personalized in the old structure, reflecting the current goals and values of the exchange or founding team.

During the phase of reckless expansion and exploration, the early Binance angel system played a subtle role. Ostensibly a community promotion channel, due to its short reporting chain that could reach the core decision-makers directly, it effectively became a "fast track" for certain projects to enter the spotlight. Some people made good use of this channel, which is why it was sometimes difficult for outsiders to see the unified logic behind the listing rhythm—because the logic itself was diverse and even competitive.

Of course, Binance also established its own listing system early on, which is the foundation of its current listing framework. According to public information, BitWell co-founder Jeff Young participated in Binance's listing-related business, while Buidlpad founder Erick Zhang was more deeply involved in building Binance's listing standards and processes.

What sets these "system builders" apart is that they not only understood the rules but also defined them. When they left Binance and became project incubators or investors, this understanding did not reset—on the contrary, it became a scarce resource.

From public results, it is known that after leaving Binance, the founder of BitWell had several projects associated with or recommended by him successfully listed on Binance's spot market; similarly, four projects incubated by Buidlpad completed listings on Binance, claiming a 100% "Binance selection rate." This "hit rate," which exceeds the industry average, is difficult to explain solely by project quality. A more reasonable understanding is that when you have personally written the scoring criteria, you naturally know how to achieve a high score.

Additionally, YZi Labs (formerly Binance Labs) is also a representative of this. Despite Binance repeatedly emphasizing that there is a "firewall" between departments, historical data and market consensus indicate that obtaining investment from YZi Labs is one of the strongest "passports" for listing.

According to insiders, the early listing framework was pushed for formulation by Erica Zhang, Jeff Yang, and others. The early YZi Labs team also had a voice in listings, but later there were significant personnel changes, with several core members leaving around June 2022, including head Bill Qian.

Binance has never publicly explained the reasons for this concentrated departure, but the coincidence in the timeline—the overall replacement of the Loss team (now the Yield security team) and the subsequent tightening of the listing process—suggests that this was not a simple strategic adjustment.

Rumors within the industry involve internal governance issues, but due to the lack of official confirmation, no qualitative judgments will be made here. What can be confirmed is that after this personnel upheaval, Binance clearly strengthened internal controls over the listing decision chain.

It is worth noting that even during the most centralized period, listing decisions were not solely determined by one person. Insiders familiar with the internal process revealed that major listing decisions require signatures from multiple key positions, meaning that even the highest management must seek balance within an established approval system.

After experiencing the aforementioned growing pains, Binance systematically restructured its listing power structure. Historically, there had been a centralized Global Head of Product (such as Mayur Kamat), but since Kamat's departure in 2023, this role has been split and reorganized. The current model is that the decision-making power for spot listings has been divided among product managers and trading operations heads along multiple parallel lines, no longer concentrated in a single department or individual. The cost of this design is a decrease in decision-making efficiency, but the benefits are evident—by increasing "veto nodes," any attempts to influence outcomes through a single relationship or channel will face higher coordination costs.

The evolution of Binance's listing system is essentially a history of transformation from personal rule dividends to institutional defenses. But institutional transformation never means the end of problems.

On February 2025, the now-former CEO CZ publicly stated that Binance's listing process was "a bit broken"; in the same year, a leak involving a listing for a certain MEME coin exposed the vulnerability of internal information control once again. These events indicate that even after multiple rounds of power structure adjustments, the inertia of old gray areas remains stubborn, and the soil for loopholes and corruption has not been completely eradicated.

On December 17, 2025, Binance issued a stern announcement, officially unveiling a complete listing framework covering Alpha, futures, and spot markets, explicitly prohibiting any third-party intermediaries from participating, and published a blacklist naming individuals and institutions such as BitABC, Central Research, and Andrew Lee, while establishing a whistleblower reward of up to $5 million.

This announcement is both a milestone in institutionalization and a footnote to the long-standing existence of problems. When Binance needs to emphasize in black and white that "applications can only be made through official channels" and offers substantial rewards to combat brokers, it precisely indicates that the previous "distributed checks and balances" did not completely close the gaps of personal rule. Notably, Binance did not designate a "single person in charge of global spot business" in its external announcement. The decision-making power for the spot product line is dispersed among several product managers and trading operations heads.

The $4.3 Billion Turning Point

On November 21, 2023, in a federal court in Seattle, USA.

47-year-old CZ admitted that he failed to maintain an effective anti-money laundering program and resigned from his CEO position. At the same time, Binance agreed to pay $4.3 billion to U.S. authorities to resolve criminal charges—this is the largest corporate settlement agreement in U.S. history involving criminal charges against executives.

According to the terms of the plea agreement, CZ is prohibited from participating in Binance's daily operational management and cannot engage in any activities related to Binance for three years. However, the agreement does not prohibit him from retaining ownership shares or from "providing advice."

This is a subtle way of exiting power: CZ is no longer the CEO, but he remains the largest shareholder; he no longer commands operations, but he controls investments; he no longer appears internally, but his name is always associated with Binance.

On that day, Richard Teng, who had long served as a senior executive at Binance, was announced as the new CEO. An exchange facing regulatory pressure needed someone who could communicate with global regulators to stand in front. He is one of the few executives within Binance with an "insider" background.

Before joining Binance, Richard Teng held key positions at the Monetary Authority of Singapore and the Singapore Exchange (SGX). In 2015, he participated in the establishment of the FSRA (Financial Services Regulatory Authority) and helped ADGM become one of the first jurisdictions in the world to introduce a cryptocurrency regulatory framework. This composite background also allows him to navigate both traditional finance and cryptocurrency sectors.

The $4.3 billion fine changed not only CZ's trajectory but also began to transform the giant that is Binance.

In the settlement agreement reached with U.S. regulators, the CFTC (Commodity Futures Trading Commission) explicitly required Binance to establish a corporate governance structure that includes an independent board of directors. Additionally, the U.S. Department of Justice and the Treasury Department required Binance to accept external compliance oversight—Forensic Risk Alliance and Sullivan & Cromwell were appointed as independent overseers, who will continuously review Binance's operations over the next three years.

Thus, in the summer of 2024, Binance, which had been established for seven years, held its first board meeting. The seven-member board gathered around a long table in a conference room in the Abu Dhabi Global Market. Sitting at the head of the table was Gabriel Abed, a former diplomat from Barbados; opposite him was Richard Teng, the new CEO who had consumed a lot of coffee to stay awake.

Among the seven directors, three are independent non-executive directors—they do not receive salaries from Binance and can theoretically make judgments independent of management. Gabriel Abed was elected as the chairman of the board, a choice that carries significant meaning: a former diplomat from a small Caribbean nation, neither aligned with U.S. regulators nor with CZ's camp, is in some ways an "intermediary" acceptable to all parties.

The other two independent directors were also carefully selected:

Xin Wang is the CEO of Bayview Acquisition Corp., familiar with capital market operations, and she is also a practicing lawyer. The other independent director transitioned from Arnaud Ventura in 2024 to Max Yang, who, according to Binance's official website, is a strategist and business leader with extensive international experience.

The remaining four directors are insiders from Binance: Richard Teng, Lilai Wang (founding member), Heina Chen (co-founder), and He Yi. Notably, Jinkai He was an original board member, now replaced by He Yi. Among them, Heina Chen is a relatively mysterious yet highly influential executive at Binance. She has long controlled multiple bank accounts of the company and serves as a director or signatory for several Binance entities, responsible for clearing, settlement, and treasury-related matters. In investigations by the SEC and Forbes, she has been repeatedly mentioned as one of the core figures "managing the money bag" at Binance.

What does this configuration mean? On the surface, independent directors account for less than half and cannot form a majority in key votes. However, from the outside, the significance of independent directors lies not only in voting; their existence itself is a form of constraint—at least in form, Binance is no longer a one-person show.

The Appearance and Substance of Decentralization

In December 2025, during the Dubai Blockchain Week, Binance announced that He Yi would serve as co-CEO. As Binance's global user base surpassed 300 million, this woman, who had been working alongside CZ since 2017, finally transformed from an "invisible second-in-command" to a visible center of power.

According to insiders, this arrangement was not a last-minute decision but a governance requirement when Abu Dhabi invested $2 billion in Binance in 2024: He Yi was to serve as CEO in the following one to two years to promote the transition of power and governance structure.

This arrangement is driven by multiple considerations, the most important being business complementarity: Teng excels in compliance and regulatory liaison but is not deeply experienced in the cryptocurrency industry; whereas He Yi, as a co-founder, has an intuitive understanding of products and markets that Teng lacks. Teng manages compliance and regulation; He Yi manages products, markets, and user growth, with both lines advancing in parallel.

But the deeper question is: does He Yi's return mean the resurgence of CZ's influence?

Court documents show that He Yi had participated in planning strategies to evade regulation. Media reports citing anonymous sources stated that the U.S. Department of Justice also wanted He Yi to resign during early settlement negotiations but ultimately did not hold her accountable for unclear reasons. Media described it as: the U.S. authorities overthrew the king of cryptocurrency, but the queen remains standing.

Additionally, on January 23, 2025, when Binance Labs was renamed YZi Labs, CZ's name appeared in the "co-founder" section. The name "YZi" itself is significant—it is derived from the "Yi" in He Yi's name and the "Z" in CZ's name. This investment department manages approximately $10 billion in cryptocurrency-related assets.

According to insiders, CZ has a significant influence on investments—his informal opinions on a certain sector or technology posted on X directly sway the judgments of YZi Labs' investment managers.

Projects invested by YZi Labs

Has power truly decentralized? Or is it merely a change in presentation?

During the CZ era, the compliance team's status within Binance was not high. The company's culture was "act fast, break the norm," and compliance was often seen as an obstacle rather than a protection.

But now, everything has changed.

In January 2023, Noah Perlman joined Binance as Chief Compliance Officer (CCO). Perlman's career spans traditional finance and cryptocurrency: he previously oversaw financial crime compliance at Morgan Stanley and later served as COO and CCO at Gemini Exchange. Perlman led the rapid expansion of the compliance team, establishing global AML (anti-money laundering), sanctions screening, law enforcement liaison, and listing approval processes.

According to Binance's 2024 annual report, the internal compliance team has grown to 650 experts, and if external contractors and related personnel are included, the broader compliance team exceeds 1,000 people. Bloomberg reported in August 2024 that Binance's annual spending on compliance had surpassed $200 million. This means that the compliance department is becoming one of the largest cost centers within Binance.

More importantly, the power dynamics have changed. Within Binance, if compliance does not approve, no business can proceed. Perlman is no longer just the head of a functional department; he has become a key participant in the company's strategic decision-making.

Chief Compliance Officer Noah Perlman clearly stated in interviews with CNBC and other media that his task is to find a new "balance," which will inevitably bring "friction" and "unpleasant experiences" to the business.

Listing data is the most intuitive scale of this tension. According to official announcements from Binance, the exchange listed 80 new projects in 2021, which dropped to 19 in 2022. During the eight months from March 2023, when the CFTC filed a lawsuit, to November, when the Department of Justice issued a $4.3 billion fine, Binance only listed 10 projects—the veto power of the compliance department has never been stronger. However, in the three months following the resolution of the penalties, Binance quickly listed another 10 projects, nearly matching the total during the lawsuit period. The marketing department's impulse has never disappeared; it has just been temporarily suppressed.

Growing Pains in the Process of Institutionalization

If the reconstruction of the power structure is Binance's "software upgrade," then the events of October 11, 2025, exposed the "hardware" fatal flaws.

On that day, Bitcoin plummeted from around $115,000 to approximately $102,000, with a maximum drop of over 11%. However, what truly turned this plunge into an "epic massacre" was the system outage at Binance Exchange at the most critical moment.

Numerous users reported being unable to log in, unable to add margin, unable to close positions, and some even claimed that their accounts were frozen and stop-loss orders failed during the market crash. Within 24 hours, the total forced liquidation across the market reached approximately $19 billion, with over 1.6 million accounts liquidated, setting a record for the highest daily liquidation in cryptocurrency history.

Social media unanimously accused Binance of "pulling the plug at a critical moment."

On October 12, Binance issued a statement acknowledging that "some system modules experienced brief technical failures under extreme traffic" and stated that it would compensate users who suffered losses due to asset disconnection, with two batches of compensation totaling approximately $283 million.

Despite Binance providing an official explanation, the market's doubts about Binance's system handling capabilities and technology have not subsided. The technology side is overseen by CTO Rohit Wad—this technical veteran, who joined Binance in 2022, previously held technical leadership positions at Microsoft, Facebook, and Google for over 30 years.

But the events of October 11 proved that, in truly extreme situations, this system still has vulnerabilities.

If the technical collapse was an accident, then the issues exposed during the listing process are systemic institutional flaws.

In February 2025, an article titled "To All Practitioners, Investors, and Industry Observers Concerned About the Future of Web3" sparked industry attention on The Medium. The author listed projects suspected of "backdoor dealings" and "interest transfers," detailing the issues faced when engaging with Binance.

Former CEO CZ publicly stated that Binance's listing process had "some problems."

Even more concerning is the failure of internal controls.

On December 7, 2025, a report claimed that a Binance employee allegedly took advantage of their position, with consistent content between an on-chain token issuance (13:29) and an official account tweet (13:30), which was deemed to be for personal gain. Binance immediately suspended the involved employee and cooperated with the judicial jurisdiction to advance legal proceedings. The official $100,000 whistleblower reward was distributed among the first five informants who submitted valid reports through audit@binance.com as per the rules.

This is not an isolated case. Throughout Binance's development history, there have been multiple exposures of listing information leaks, repeatedly revealing the vulnerability of internal information control.

The root of the problem lies in the fact that when a company transitions from "personal rule" to "rule of law," systems can be established quickly, but cultural change takes time. The behavioral patterns formed during the wild era—informal flow of information, the influence of personal relationships on business decisions, and "getting things done" prioritized over "following processes"—will not disappear immediately due to an announcement or a punishment.

Talent Density—The Real Dilemma

In December 2025, when He Yi officially took on the role of co-CEO at the Dubai Blockchain Week, she candidly stated in a media interview that Binance's biggest challenge currently lies in the issue of talent density.

"With the development of technology, not only in the cryptocurrency field but also in AI, traditional industries, whether in finance or internet companies, have a very high talent density. In fact, we are competing with top talents in these fields."

He Yi emphasized, "I have always believed in one thing: if you don't believe in something yourself, you won't do it well. Such employees are hard to help the company build a top global team and enterprise. So, I think the biggest pain point is still our talent pool. This is also an important responsibility I feel I have—finding the best talents for Binance."

This is not the first time He Yi has publicly discussed talent issues. It raises the question: as the world's leading cryptocurrency exchange, why is there talent anxiety? Salary is clearly not the issue—given Binance's scale and profits, it has enough purchasing power to offer top industry salaries.

The real problem may lie in a more hidden place.

According to insiders, CZ personally approached a leading project in a certain sector, wanting to acquire it for a highly attractive amount, but was rejected by the founding team. Previously, Binance had made several acquisitions, and logically, being acquired by Binance would be considered a good outcome, so why was it rejected?

The reason behind this is worth pondering. The credibility crisis is one of the most difficult risks for Binance to ignore—it is transforming into a pervasive trust deficit.

Most projects that were previously acquired or deeply collaborated with Binance lack public information, and this asymmetry of information itself forms a signal: for potential partners, the real uncertainty is not the market price but who holds the interpretive power of the rules. Discussions about the complexity of terms, payment rhythms, and betting arrangements, although impossible to verify one by one, have long settled into an industry consensus—when negotiating with the platform, you are always on the weaker side.

This concern about "credibility" has triggered a chain reaction among top geeks and successful entrepreneurs. For this group, while monetization is important, whether the team can gain respect after integration and whether the system can guarantee the initial commitments are core indicators of a platform's attractiveness.

The employees He Yi mentioned who "believe in something" face not only the pressure of multinational collaboration but also a highly pragmatic and somewhat cold organizational character. When this character translates into doubts about "contractual credibility" in mergers and executive recruitment, Binance's talent pool experiences a structural shortage: ordinary talents flock to it, but top elites with independent value who value long-term credibility remain on the sidelines.

In February 2025, He Yi publicly acknowledged: Binance currently faces issues such as being too large to pivot, expending energy on regulatory pressures, organizational rigidity due to growth, and talent iteration.

From the "attraction center" of wealth effects to now facing a "systemic bottleneck" of talent density, this chapter of Binance's talent history is essentially a painful transformation of its brand credibility from early wild expansion to modern professional governance. If it cannot provide top talents with a sense of "certainty" for a good ending institutionally, relying solely on rewards and high salaries will likely be insufficient to fill the "talent pool" that He Yi is anxious about.

The "regional autonomy" model previously promoted by Binance was seen as an attempt at institutional decentralization, but key decisions still heavily relied on CZ's personal influence. This seemingly decentralized structure once brought high efficiency but could not maintain continuity after the founder's exit. The introduction of the board and the current co-CEOs is essentially an institutional compensation for the vanished will of the founder.

But this compensation is incomplete.

Personal rule can rely on a few core confidants, but institutional operation requires stable collaboration among thousands of professionals. Binance has entered a vacuum period of "power still concentrated, but individuals unable to execute"—when individual will cannot cover the whole, the core issue shifts from institutional design to talent density: does Binance have enough people to support this global giant under strong regulation?

Conclusion: Between Certainty and Uncertainty

From an era ruled by a single person to today's co-CEOs, a seven-member board, and a 1,000-person compliance team, Binance's power structure has undergone a dramatic transformation. But the structure is just a container; the real challenge is: what will fill this container?

Listing corruption indicates institutional gaps, technical collapse shows system vulnerabilities, internal leaks reveal cultural inertia, and talent anxiety highlights limitations in attractiveness. When personal will retreats, the system has yet to operate coherently, and organizational culture is still transitioning, Binance faces not a specific problem but a whole set of interrelated systemic challenges.

He Yi stated at the Hong Kong Crypto Finance Forum in April 2025: "The essence of Binance is three things: first, to make good products; second, to serve users and employees well; and third, to communicate effectively with regulators."

These three things sound simple but are difficult to execute, especially against the backdrop of 300 million users, global distribution, strong regulatory pressure, and the founder's exit.

Perhaps Binance's biggest challenge now is not regulation but how to maintain innovation within a compliance framework, how to repair credibility in the process of institutionalization, and how to find people who "believe in this thing" in the talent competition.

As Binance is no longer the spirited dragon-slaying youth and has even begun to transform into the dragon of yesteryear, can the dragon-slaying spirit it embodies continue? Will the internal pursuit of stability and the shadow of centralization allow for the emergence of more business models and innovative capabilities? The era of wild growth has passed, but the real challenge has just begun. How far can it go?