Binance Academy Dinner Speech: CZ Addresses Industry Concerns, Predicts AI & Blockchain Future

Binance Co-founder Addresses Security Concerns, Industry Woes

Yi He, co-founder and co-CEO of Binance, addressed recent security incidents, listing practices, and industry consolidation in a 23-minute speech at a Binance Academy dinner. She emphasized the exchange’s stringent internal policies, the evolving sophistication of hackers, and reported a positive net inflow of funds within 24 hours of resuming withdrawals.

Internal Policies and Evolving Threats

He began by acknowledging that pleasing everyone is impossible, stating her commitment to doing what is right. She then moved to address criticisms, including accusations that Binance operates like a “makeshift operation.” He countered these claims by highlighting strict internal policies, recalling an incident where an employee was promptly fired for downloading a streaming service on a work computer, an action deemed a breach of security protocols.

She revealed that Binance has thwarted over 50 diverse attacks in the past year. Hackers, she noted, are also adapting, with malware no longer being the primary vector for bypassing risk controls. Artificial intelligence is now being employed by attackers, and social engineering tactics have become more sophisticated, with “real headhunters” offering attractive job opportunities. He speculated that hackers might be collaborating with individuals, providing lists of targets for micro-targeting attacks, making even trained employees susceptible to lapses in vigilance.

AI as a Double-Edged Sword

Regarding AI, He described it as a tool that can serve as both offense and defense. She likened the integration of traditional and AI-powered security solutions to the relationship between centralized (CEX) and decentralized exchanges (DEX), emphasizing that one does not necessarily replace the other. Following the recent incident, both she and Binance founder Changpeng Zhao (CZ) remained calm, focusing on mitigating the damage and learning from the experience. She echoed CZ’s sentiment that “money isn’t everything,” asserting that the priority was to address the security issues and learn from the costly lesson, which they could afford. Contrary to online speculation of sleepless nights, He stated that both she and CZ maintained their composure, with CZ continuing his travel and speaking engagements.

Industry Outlook and Listing Logic

Looking ahead, He reiterated her belief that the future will be driven by AI and blockchain technology, with Binance aiming to become a global, comprehensive financial platform offering tokenized products across commodities and stocks.

Addressing complaints about Binance’s slow pace and limited listing of memecoins, He explained her contrarian approach. She recalled stating in 2017 that issuing tokens was akin to issuing debt, requiring collateral and accountability. The long-term commitment to BNB, she said, is a testament to this principle. She argued that the ease of fundraising and rapid liquidity of tokens disincentivizes ordinary individuals from putting in hard work, creating an “impossible triangle” of a good business model, original intent, and financial freedom.

He clarified that early Binance listings often saw price surges due to “naming fees” or “liquidity privileges.” With the rise of decentralized exchanges and the leveling of the playing field, these privileges have diminished. Many tokens, she explained, were already inflated before listing, reaching their peak on the day of the launch. Project teams, she added, often use governance tokens and revenue decoupling as excuses for not being responsible for token prices. The industry, she concluded, is becoming hollowed out, with fewer projects possessing sustainable models that genuinely add value to token prices. She noted that some top venture capitalists, after reviewing projects, found them suitable for quick profits but not for large-scale, repeatable, long-term investments, often preferring traditional equity investments.

User Expectations and Future Offerings

In terms of user demands, He identified a desire for a fair platform and opportunities to profit. This led to the listing of smaller-cap memecoins and the implementation of a tiered system for Alpha, CEX, DEX, and wallets. She highlighted Binance’s efforts to offer valuable assets, with a significant number of tokenized stocks and commodities prepared last year and launched this year. However, she cautioned that these offerings do not guarantee profits and that a risk-aware mindset remains crucial.

Rebuilding Trust and Addressing Conspiracy Theories

He expressed gratitude for the trust users placed in Binance during the withdrawal suspension, noting that the volume of withdrawals was lower than anticipated. She reported that as of the previous day, the exchange had seen a positive net inflow of funds over a 24-hour period. She also criticized conspiracy theories as sensational and easily spread, such as claims that Binance orchestrated the October 10th incident or staged the event to appear responsible. She asserted that if Binance had intended to abscond with funds, they would have simply announced a theft and closed down, but instead, the entire team remained on duty for 24 hours. She emphasized her commitment to legitimate operations and healthy business models. For those who believe the incident was orchestrated by Binance, she suggested they might not be suited for investing, at least until they can clarify the timeline and logic.

The persistent and malicious attacks, she admitted, have led her to question the value of striving for financial freedom. The support and belief of those present at the event, she stated, are her driving force. When asked if her speech was prepared, she replied that it was not, a fact that often causes headaches for her colleagues. She mentioned that she only considered what recent issues and user concerns were most pressing just before taking the stage. She acknowledged that explanations can sometimes feel like falling into a self-inflicted trap but believes it is worthwhile to explain to those who deserve it. She also briefly addressed her inability to log into WeChat, attributing it to a new device triggering security controls, as her account is on a list of those prone to theft. She assured attendees that she would have someone resolve the issue and that private messages might not be seen.

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