Exclusive interview with He Yi: Binance’s core strategy this year is to promote compliance globally

Original author: Timmy Shen, Forkast reporter

Original title: "Yi He: Binance will take the arrows for industry compliance, security"

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

For Binance, having a physical headquarters is not fundamental to keeping the company running. But as global compliance matures, having a headquarters can help our industry move in a clear direction. If having a headquarters can ensure smooth operations for users and help with compliance, we are willing to have one or more headquarters around the world.

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

The core strategy for 2022 remains the company's global promotion of compliance, and we are making some good progress. We are vigorously expanding our compliance team to recruit professional talents and pursuing 100% completion in "Know Your Customer" (KYC) on our platform. At the same time, we also provide blockchain development consulting services in many countries and regions to help the industry develop.

What are your plans for Forbes after making a $200 million strategic investment? Do you want it to cover more crypto and blockchain-related stories?

Forbes is one of the most influential and innovative media in the world. Both Binance and Forbes are not satisfied with their achievements in only one field, but are eager to achieve greater success. We also noticed that Forbes' enthusiasm for Web 3.0 is much higher than that of most traditional companies, and it has a separate blockchain reporting department at a very early stage. They know where the trend is going.

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

We currently have more than 3,000 employees worldwide, located in various countries and regions.

During the recruitment process, we mainly look at their skills, such as language skills, and whether the candidate is stronger in brand, operations, or information technology. In other words, we mainly look at whether the candidate is a good fit based on their capabilities rather than their location. After all, we have never really had a physical office.

Currently, when we apply for a license in a country or region, we start setting up offices there as part of the process. If we find that some countries and regions are understaffed, we will hire more people in the region to serve those markets, such as Europe, Southeast Asia and the Middle East.

What compliance measures has Binance taken in the past year?

In terms of compliance, many outside voices are asking whether Binance is regulated or facing regulatory pressure, and whether Binance is very concerned. But in fact, within Binance, we believe that regulation is favorable. You can even say that this is something we have been waiting for.

In fact, from the perspective of an industry insider, you will see that if the industry is small, no one will care about you. Only when the industry grows large enough and more people participate, will the regulators pay attention.

Can you elaborate on your approach to compliance?

Let me give you an example. Since the first day of Binance, we have had strict internal regulations to regulate insider trading. At the beginning, we required employees to serve for at least 30 days. We have since extended that requirement to 90 days. We also have very strict firewalls for internal information management. We have also learned a lot from past hacks and have established the zero trust principle [a security model that assumes that 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 marketing costs . It is difficult for small companies or early startups to bear such expenses. However, Binance has gone through the early stages of development and has accumulated a wealth of preparations for security management, anti-money laundering, KYC, etc.

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

How big is your team in mainland China?

Binance did have an office in China in 2017, but the local government said they did not welcome cryptocurrency trading. So we moved our office out of China. At that time, some colleagues left the company under policy pressure, and we deeply understood this, and some colleagues also moved out of China.

We have invested in some companies in China, and sometimes we get confused about whether these companies are part of Binance. In fact, these companies are pure investments and we do not have any offices in China.

Where are you now?

Actually, I am on the move. I left China in 2017 and have lived in Japan, Europe, the United States, and Southeast Asia. If we keep in touch, you will find that I will be in a new place next month. I will live in the Middle East and Europe for a while.

You are a former TV travel show host. Can you tell us a little bit about your career path? When and how did you get into the crypto world?

Before entering the blockchain industry, I tried a lot of things. Being a live broadcast host was not my dream job, nor was it a job I wanted to devote my life to. I did it for about two years. It was just eating, drinking and having fun. I felt anxious because I saw that the influence of the TV industry was gradually being eroded by the Internet. About 10 years ago, the entire traditional media industry was going downhill, while the Internet was developing at a high speed.

At the end of 2013, when the price of Bitcoin rose to 8,000 yuan (1,300 U.S. dollars), an investor friend asked me to help run a Bitcoin advertisement. At the time, I was very interested in starting a business, and in order to show my value, I did the advertisement for free. In the process, I learned that there was a new business model around trading platforms, where you can register an account and trade Bitcoin.

In the spring of 2014, I joined OKCoin, a cryptocurrency exchange. 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 was growing rapidly, but as the company grew, the founders and co-founders had different views and values. Realizing that their goals might not be the same, Zhao Changpeng and I left.

Then I joined a company called Yixia Technology. It had a short video app called Xiaokaxiu, which was quite popular at the time. It was a bit like TikTok. I was there for less than two years and launched Yizhibo.

By 2017, I felt I had reached the ceiling of 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 was officially launched, Zhao Changpeng asked me if I would consider joining. On the evening of July 13, one day before the official launch, Zhao Changpeng said: "When it goes online tomorrow, the price of BNB may rise 10 times, and then the price I offer you will be one-tenth of the current price. You must decide whether to join us now." So that day, I agreed to join Binance.

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

We had to deregister some users in China. We offered to buy back BNB from Chinese users at the market price of around 8 yuan, not the issue price of 1 yuan. That's why Binance was able to make a good impact and get positive feedback at the time. Many other projects would just return funds at the issue price, whether it was up or down. Although we might have to pay eight or nine times the issue price, we still paid it. At the time we almost used up 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.