Chapter 1: What is discussed at the start of this section?
Your tweet was one of the reasons that caused them to go out. I don't think those were my exact words. There it is. That's the tweet. He was the biggest guy giving money to them. You just took that money away.
Sam, Mini Madoff arrested.
Adam Back is Satoshi Nakamoto. Do you think there's a chance that it's him? In their eyes, would China look at you as they made you? Because I look Chinese, I'm part of the CCP or anything like that. That's completely false. You make it seem like anybody can start a company and get to $100 billion. I'm a normal guy. You're not a normal guy. I don't think I've ever sat in a Lambo yet. Stop it.
Ice worth $100 million, give or take. Never been in a Lambo. Enjoy today's conversation with the one and only CeCe.
CeCe, great to have you on the podcast. Thank you for having me. Pleasure to be here. I told my guys, I said, listen, I noticed everybody was going in the cigar lounge to meet you. I said, you better not ask him for a loan. You better not go and say you want a donation or a loan from this guy. Because the first thing they found... What's his net worth? Is he really worth $110 billion?
That's the first thing people want to find out. And you're like, yeah, you know, he's a pretty rich guy. But it's funny. I got all these things I want to go through with you, with your story. I was telling you earlier how your story is a movie. They could turn it into a movie at any time. And I hope it turns into a movie because... You've lived an interesting life, but did you fly in from UAE?
Yes. Okay. Is it true that you guys just got attacked or you got bombed yesterday by Iran at a couple oil facilities? I don't know where they attacked, but as we were leaving, there were missile alerts, and the flight was on, off, on, off. When you were leaving? When we were leaving. So just on my way to the airport, the flight was off. And then 20 minutes later, the missile warning was resolved.
It was on again. And then it was off again and on again. And then, yeah, so that's how we fly. And we wait. So just before we were supposed to take off, there was off again. We said, well, let's just wait for 20 minutes. And then we had a 20-minute window at the plane. What do the pilots say? The pilots say, hey, we don't know. Are they given a safety protocol or no? Hey, we're going to take off.
It's going to be fine. It's going to be a long flight. We're going to be okay. There's going to be a little bit of turbulence. What warning did the pilot give? So the pilot's just waiting for the – the pilot's just following instructions.
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Chapter 2: How does Changpeng Zhao view his wealth and success?
You feel safe living in Abu Dhabi. You do. Very safe. When you think about all the things that you can't buy with money. You can go to a restaurant. The waitress doesn't give you good service. You can buy the restaurant and say, you're no longer here. You have that kind of money. You can go to a sports game. You don't like the team's management.
You can make a massive offer the next day and buy an NBA team or an NFL team. But when it comes down to security, living at a place... What made you pick UAE out of all the places to live in? I mean, it is the safest country in the world. You believe that? By far, yeah. Tell me why.
If you drop your wallet on the street and it has like, I don't know, 3,000 bucks in there, you come back in a week, it's still there. You'll find it. And people who find it will return it with the cash in there. There's basically zero crime. There's no petty crime, no big crimes, et cetera. And the fiscal security on the street translates into financial security, fintech. It's just very well run.
um and uh and also the leadership of the country is very pro-business uh very very smart very very uh calibrated um extremely um visionary so it's one of the best places to be yeah do you do you think about the importance of like what level of importance do you put on where to raise your family on the the strength of the military of that country in today's turbulent times that we have do you say man i wish you had a stronger military or no
Well, I think I was actually surprised at how strong the military of UAE is. I didn't know until there were missiles flying in and they were intercepting it. I was like, wow, that's pretty cool. And I didn't, like, you have to think about it, right? How much do you have to prepare that in advance to be able to intercept that many missiles coming in? And it takes years and years of preparation.
So this foresight there, that's really hard to match. I think UAE does rely very heavily on U.S. support from military equipment technology. They rely on us for that? I think so, yeah. So they're a very strong partner for the U.S., so I think they do quite well there. And then, but other than that, I think that just the countries were very well governed.
If you have sensible leaders, you have like smart leaders that are fair and that wants the country to grow instead of growing their own pockets, then you have a pretty good country, yeah. I saw a stat the other day and I wonder how you answered this one. In the 70s, In the S&P 500, it showed that, you know, 85% to 93% of the wealth was tied to tangible assets in 1970. Yeah, yeah.
So if somebody was a billionaire and they lived in a state, they ran a business, they couldn't move to another state or they couldn't move to another country because it's tangible asset. Yeah.
wealth that they have today we've gone from 85 yeah 85 to 93 back in a days to now it's the other way around 92 is an intangible assets patents you know brands you know bitcoin crypto ai all the stuff that they're building Moving forward, do you think this is going to be a threat to countries that don't know how to handle small business owners or big businesses?
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Chapter 3: What led Changpeng Zhao to choose the UAE as his base?
No, you can do parallel progress. So even if you did get a passport to come down here, you would still choose UAE today? I think today my life is pretty set up in the UAE right now. I would probably just stay there. Again, the whole point with me is do countries realize what's going to happen to the future
of these wealthy entrepreneurs who their assets are intangible, that they can no longer bully them with regulation because they've got 200 other countries that would love to have them. Maybe not all 200 of them. Let's just say 100 of them they can go to have a decent life, and then 10 countries that are very competitive for business, say UAE, Singapore, some of these countries you can go to.
I wonder if, as bad as it is today, we see reports of people leaving California with the whole wealth tax. I don't know if you're following that closely or not. And we see what they're talking about in New York. And a trillion dollars left to New York and California during COVID. California just lost another trillion dollars.
And their net migration rate report came out that they're even losing more people now. And they want to offer this 5% tax, billionaire tax, on the couple hundred people that they have there. I wonder... if they're going to realize how horrible of a move this is long term, because you can go anywhere today. I wonder if they'll figure that part out. What do you think?
Well, what I hear is a lot of companies are moving into taxes in the US, right? I don't know the details, but generally at a high level, I think high taxes doesn't work that well. When you impose high taxes or high transaction fees or just generally high cost, for doing business, business move away. Basically, you're taxing on a much smaller volume.
You actually get less net tax, I think, or less net fees or income or revenue, whatever you call it. The concept is about the same. And as you said, now there are 200 countries that are kind of actually competing for favorable regulations for businesses, favorable environments for businesses. I do think that that consideration is definitely in play.
It's not like the business won't move and you can just tax the hell out of them. When you increase tax from 1% to 10%, you might have less tax income. It's not that straightforward. Being close to Iran, what is your opinion on what's going on with Iran? Well, I didn't follow geopolitics that closely before. I'm just like a business guy doing crypto, etc.
But after the war started, I live in a country that was attacked by Iran. UAE did not initiate any attack. And UAE was the most missile attacks from Iran out of all countries. I think it's just because of the physical proximity, because they're just across the water. But even being the most attacked, they didn't retaliate. So UAE held back. They probably could, but they didn't.
This goes to the wisdom of the country leadership. But living there, seeing missiles flying overhead, can't make me support Iran. So I'm against all wars. And also, based on my limited understanding, the fact that Iran hit every country in the Gulf is a bit crazy. I wish the war would stop soon. I wish people come to their senses.
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Chapter 4: How does Changpeng Zhao perceive the future of AI and its implications?
But I was a normal kid, yeah. Did people, like, did you know you're going to do something special? Like, was there something where you're like, one day, were you a driven kid or? No, no, no. It was not. No, it was like, there was no indications I was anything special. I was just a normal kid. There was never any indications, oh, this guy is going to build a billion dollar company even.
Were you a dreamer? Would you dream about one day, I'm going to do this, make my family proud? Was there any thoughts like that with you? No, I didn't have any. I wanted to be successful. I wanted to do well, but I never dreamed of being a billionaire or run a largest crypto exchange. I just wanted to be financially successful. I want to have a successful career. I want to build a good life.
I always worked hard. But I wasn't dreaming like, no, I want to be the worst, I don't know, whatever ranking. That wasn't you. I don't know if you read the book Accidental Millionaire. It was a book written about Apple, about Steve Jobs and Steve Wozniak. I think it's a former employee that wrote it. It's a little bit of a disgruntled guy that was saying bad things about him.
There's a different copy of it. If you go to Accidental Millionaire and you put Apple, just go to images, you'll see which one it is. Apple, that's the one right there. Then they wrote a book called The Accidental Billionaire. If you notice, it's only got 11 reviews. This came out in 87. It's actually a very good book. For somebody in the space, Lee Butcher was actually a very good book I read.
Then the book came out called An Accidental Billionaire. And that was written, I think, about Mark Zuckerberg, who, you know, he became a billionaire. I don't know what they call it. A hundred is what? Centi? A hectare is ten. Centi. Centi, right? So you're an accidental centi billionaire. I'm not sure I'm centi, to be honest. I think the Forbes estimates are a bit off. They're too high. Okay.
But, yeah, kind of accidental, yeah. And how did it happen? Because I know the story when you sold your property. If you want to share that story, when you sold the property and you bought all Bitcoin, what got you to the point of saying, I have to be able to get into Bitcoin? I started learning about Bitcoin in 2013, right? And at the time I was like, what, 36, 37?
And then I was like, okay, this is the future technology. This is bigger than the internet. And when the internet was happening, I was too young. So I was 36, 37-ish. I wasn't going to let this opportunity pass by. So I said, look, I just got to get involved in this new technology field. I don't know what I'm going to do first.
I don't know what I'm going to do yet, but I'm going to buy Bitcoins first. So I sold my house, sold my apartment, and bought Bitcoin. So that was pretty clear to me. That was a very long-term conviction. Is this a $900,000 apartment? Yes, this is a $900,000 apartment. And when you bought it at the time, what was the average price of Bitcoin? Average price I got in was about $600,000.
I got payments in installments, right? So I bought it at $800,000, $600,000, $400,000. So average to us. So if we do 900,000 divided by 600 times 81,000, you're looking at $121 million, give or take. Something, yeah, just about $100 million. Selling a $900,000 apartment turned into $121 million. The average person listening to this thinks that's crazy.
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Chapter 5: How does AI's efficiency compare to human emotional intelligence?
Right. So just being smart doesn't mean you have more money. Right. The word doesn't work. So the point there is just because AI is smarter than human doesn't mean their EQ and empathy is going to help them retain people. So somebody may argue that and say they don't need people. They don't need to have EQ because they're talking to other AI agents that...
You don't need to tell them how amazing they are. You don't need to ask them how their wife and husband and kids are doing because they don't need that validation. So it makes drama a little bit easier. You don't lose efficiency because somebody's in a bad mood because you didn't give them a high five that morning. So that argument may be made against humans, no? It can be. It certainly can be.
So AI may be more efficient and less dramatic and less troublesome to manage, etc. So that is possible. But I don't think they replace humans in that sense. You don't think so? I don't think so in the short term. And I also think that we will find the proper safety guardrails. Against it. Against it. So there might be some accidents. There might be some damages. There might be some problems.
Chapter 6: What insights does CZ share about his relationship with Sam Bankman-Fried?
But I think over the long run, we will find the guardrails. So future looks bright in your eyes. I think so. I'm always optimistic. I like it. By the way, if you were 20 years, the 35-year-old CZ who was working crazy hours those 12 months that you guys went zero to a billion in profits, if he's the 35-year-old today in today's market, what industry are you entering? What are you doing?
How are you? What software are you using? What technology are you using? What would you get into today? Well, I think for me, I was still getting into the same industry. I think you got to, you can't just chase every hot industry. You have to do what you do best. You have to do what you're good at, what interests you and what's valuable for others.
You got to find the intersection of those three things. And those three things doesn't change overnight. For a young person, you can learn about blockchain or you can learn about AI. Both are good. So I wouldn't change what I would do, but I would change the way I would do it a little bit. I would be much more focused, much less distractions. And just with hindsight, right?
You will know like, okay, I can be so much more focused instead of getting distracted in a lot of different places, et cetera. Got it. So internet was first, blockchain was second, AI is third.
Chapter 7: How did Binance respond to regulatory pressures and FTX's collapse?
What do you think is going to be fourth? I don't know. That's very hard to predict. For example, before ChatGPT came out, AlphaGo was there. That wasn't a big industry. But then ChatGPT came, that was suddenly, okay, all these AI things happening. But before that, Sam may know, but I didn't know. So I have to wait for it to happen to see what's next.
And what's next is probably going to be another, I don't know, another 10 years away. You think the next is going to be another 10 years away? No, I don't know for sure. I'm just saying that roughly. I don't know for sure. Because at any point we could wake up and something new is here. We're like, wait a minute. What is the quantum computing? And it's going to take this long to build it.
And all of a sudden, what if they do it faster? Could that turn into... So who knows what's going to be taking place? It could happen tomorrow. Yeah, true. It could happen. So it's a safer answer to say it could happen tomorrow. But so let's go back to Binance. We're talking about...
Chapter 8: What lessons does CZ share about philanthropy and giving away wealth?
spf when the conversation came up sam mcman freed with ftx so at one point you guys did have a relationship together right the two of you uh well we had we had an investment into into ftx so was there ever a relationship or no uh no uh i wouldn't uh well we know we met each other uh we had each other's contact and uh but i wouldn't call it a very close relationship i probably talked to him less than 10 times in total did you guys ever break bread just the two of you
We had one meal together. Just the two of you? Just the two of us. What was that like? This was when he was seeking investment from Binance. And we just chatted. No, we just tried to get to know each other a little bit better, etc. We had one meal together, just the two of us. When you walked away, what was the feeling you got from him? The feeling I got is he was very high EQ. High EQ? Really?
Yeah, so he knows what to say. This is the impression I got for him. He knows what to say, when to say, in front of whom, in what circumstances, he will say the right stuff. He was very respectful to me.
He was saying all the right stuff, like we're going to collaborate, we're going to build this, we're going to help to grow the crypto industry, we're going to solve, we're going to help the regulatory evolution. He was saying all the right stuff that, you know, yeah. Did you walk away saying, I like this guy, I trust this guy, sounds like a good player?
We were, actually, after that meal, we actually declined to invest. I think that was in summer 2019. Where was it at? Were you guys in the States? Actually, it was somewhere in Asia, I think. So, I think Singapore somewhere. But we actually turned, like, he wanted the investment from us. We actually turned it down. And then he came back in November to our CFO at the time, Wei.
and he he made a much improved offer and then we we invested yeah why'd you take the meeting the first time he came was he already player was he somebody that was a known guy at that time he was one of the larger traders he was a vip trader alameda was a vip trader on binance so like the vip manager's like well give him a meeting right i usually don't don't meet with vips but he has a specific proposal where he wants to build a future exchange he wants he wants to build ftx he wants us to invest and this is where you guys put two billion dollars into it
No, no, no. We're putting much less money into it. If I'm not mistaken, we probably put a couple million dollars into it. This is way early on. This is early on. I think we got close to $2 billion out of the deal when we exited at the time. And then we held them in FTT tokens. Part of it was in FTT tokens, which went to zero now.
And that's why they're suing Binance for, I think, $1.76 billion or whatever the number is. There is an ongoing litigation. Between them, though. You're not involved in that litigation. I'm not too sure. I don't think I'm... But you haven't gone to court. My lawyer is handling it. But my lawyer did advise me not to talk about ongoing litigations. If I remember correctly...
your tweet or the decision was one of the reasons a lot of people said that caused them to go out. Because you came out and you said, we're out, we're not doing anything. You were speaking to Sorkin, if I'm not mistaken, in a, right? You got on Aaron Sorkin, you guys are on MSNBC or CNBC, and then you said, no, I don't feel good about it. You made some comments, we're out.
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