Binance Founder Changpeng Zhao: From Day One of Rebuilding the Exchange, No U.S. Users
Binance founder Changpeng Zhao, in a podcast recorded in Bhutan, was asked: if he were to rebuild a global cryptocurrency trading platform in 2017, the first principle would be not to engage with U.S. users from day one. His definition is that once a centralized financial platform has U.S. users, it may be required to comply with U.S. regulations and obtain licenses in the U.S.; the U.S. does not enforce this on all platforms 100% of the time, but it has the right and ability to do so.
In terms of product pace, he mentioned that contracts would be developed earlier, and other financial products would also be launched sooner and cover more areas, while blocking certain regions. Communication with regulators needs to be more robust. He stated that Binance is already one of the trading platforms that communicates the most with regulators, but coverage is still insufficient; if they really want to expand, the costs are extremely high, not just in terms of money, but also in hiring people and spending time managing this matter.
This aligns with his previously disclosed legal outcomes: in 2023, he pleaded guilty to anti-money laundering-related charges and stepped down as CEO, with the company paying approximately $4.3 billion in fines. The rebuilding list effectively rewrites "U.S. users" from a growth lever to a jurisdictional switch.
In the same conversation, he also mentioned that the market conditions this year are poor, and performance may decline, only hoping to do their best; the direction of stablecoins and physical assets on-chain is something they understood later. The rebuilding principles did not provide new market share or fine numbers; the incremental change is excluding U.S. customers from the design from day one.
Blocking regions and offering a full range of products are opposing forces: the more comprehensive the products, the more they resemble a securities and derivatives platform as defined by the U.S.; the more global the users, the harder it is to prove that they have never served Americans. He framed communication costs as an organizational issue, indicating that issuing a policy document alone cannot resolve it.
In terms of market mechanisms, the sellers are former platform founders who have left the front line and rewritten industry entry rules through retrospectives, while the buyers are new exchanges that still want to create a global order book. The event-driven aspect is that regulatory definitions precede product definitions. Funds will flow to platforms that segment licenses by country from the outset, rather than those that first grow large and then patch compliance. Beneficiaries are those with existing U.S. licenses for spot and futures trading; those under pressure are teams that still view U.S. traffic as a growth engine and later cut users.
Source: Public Information
ABAB AI Insight
Changpeng Zhao's hypothetical reopening of an exchange rewrites not the matching engine, but the geographical fence for users. Binance's rise relied on a global order book; the lessons learned from the U.S. Department of Justice have been condensed into "do not engage with Americans from day one." This is not a moral judgment, but a jurisdictional arithmetic: centralized platforms hold assets for users, and a user's nationality can become a tool for long-arm jurisdiction. He acknowledges that the U.S. does not enforce this equally on everyone, but the capability is there, and the probability is sufficient to alter the design.
The capital path has shifted from "first build liquidity then patch compliance" to "first segment the market then build products." Contracts and structured products need to be developed earlier because costs are in derivatives; earlier also means encountering U.S. definitions of contracts and securities sooner. Communicating with regulators is framed as hiring and time, indicating that licenses are not just legal memos but a set of ongoing bureaucratic costs. The $4.3 billion fine has already been paid once, and the rebuilding list is to prevent a second instance of buying the same lesson at the same price.
Analogies can be seen with UBS and Credit Suisse listing U.S. clients separately, forex retailers shutting down by country, and internet companies using geographical fences to handle copyrights. The industry phase is a global unified order book yielding to a patchwork of licenses. Those who can deepen liquidity without opening U.S. accounts can still thrive in non-U.S. time zones; those who treat U.S. traffic as a default market are using fines already paid by others as their business plan.
Structural judgments belong to regulatory changes. The mechanism is: once user nationality becomes a product switch, the growth curve must be segmented by jurisdiction. Not engaging with the U.S. from day one is not about giving up the largest market, but about removing the largest enforcement power from the balance sheet. Insufficient communication coverage will become an attachment to the next fine.
ABAB News · Law of Cognition
Once a user's nationality enters a custody account, jurisdiction follows them in.
First grow large then patch compliance, fines are priced based on global liquidity.
The more comprehensive the products, the more they resemble companies that need licenses.