Interview with Binance VIP and Institutional Lead Catherine Chen: "'Binance Wealth' is the Product Solution the Market Needs"

Another year of Binance Blockchain Week has come to an end, with Bitcoin hitting a new all-time high amidst the certainty of the U.S. presidential election.

Amidst significant market volatility and high sentiment, Binance, as the world's largest cryptocurrency exchange, holds significant influence over the industry with any move it makes. In terms of trading, in addition to the vast base of retail traders, institutional investors are also a crucial part. On the day before the start of the Binance Blockchain Week event, Binance's VIP and Institutional team announced the launch of Binance Wealth, Management Tool, aimed at wealth managers. This is the first cryptocurrency exchange platform technology solution designed for wealth managers, significantly lowering the barriers to entry for wealth managers seeking cryptocurrency asset investment for their high net worth clients.

BlockBeats also had a chat with Catherine Chen, head of Binance's VIP and Institutional team, during this Binance Blockchain Week. In addition to delving into the newly launched product, Catherine also discussed the operations of Binance's VIP and Institutional business, and shared insights on the post-CZ era changes at Binance, the impact of the presidential election, and institutional views on Crypto.

 

How Does "Binance Wealth" Bridge the Gap? What Are VIPs and Institutions Up To?

BlockBeats: First, Catherine, please introduce us to the newly released "Binance Wealth."

Catherine Chen: Binance Wealth is the world's first technology solution designed by a cryptocurrency exchange specifically for wealth managers and their high net worth clients. This is a groundbreaking initiative that bridges traditional finance with cryptocurrency, utilizing Binance's industry-leading security technology to provide wealth managers with a straightforward platform to monitor their clients' cryptocurrency investments on the Binance platform.

As we have seen over a significant period, institutional and private investors have shown explosive interest in cryptocurrency, seeking a secure and reliable way to incorporate their financial products. As an industry first, Binance Wealth has opened up a new track for high net worth clients to access cryptocurrency, allowing them to rely on their trusted wealth managers to open accounts on the trading platform and oversee cryptocurrency investments.

Overall, Binance Wealth has the following three advantages:

1. Binance Wealth caters to the significant demand of wealth management firms and their high-net-worth clients who wish to access cryptocurrency under the guidance of their trusted wealth management company.

2. Binance Wealth provides wealth management institutions and their clients with the traditional financial solutions and expertise they are already familiar with, thereby lowering the barrier to entry for cryptocurrency and facilitating the inflow of private wealth.

3. Binance is the first industry player to offer such an infrastructure solution as a cryptocurrency asset trading platform, demonstrating Binance's knowledge and expertise in bridging the gap between crypto and TradFi.

The launch of "Binance Wealth" is aimed at bridging the gap between cryptocurrency and traditional finance. For a long time, the private wealth sector has lacked access to traditional infrastructure for cryptocurrency exposure. Binance Wealth will lower the barrier to entry for more market participants into this new asset class. In the market context where "unlocking capital inflows is key to making cryptocurrency mainstream," I believe "Binance Wealth" has taken a more proactive step in advancing the industry.

These are all things that have not been done before, and we have been working hard and timely to launch this product solution that the industry and the market need.

BlockBeats: From your perspective, what are the differences in investment preferences between retail and institutional investors?

Catherine Chen: Allow me to first introduce Binance's VIP Program. Transparency is a key feature of all systems, departments, and activities at Binance, including the VIP Program I oversee. The Binance VIP is divided into 1-9 different levels, each with its own criteria. Regular users (i.e., retail market participants) are at level 0, and basically anyone other than regular users can be considered a VIP. Whether you are an active trading user, a large holder, an investor in Binance products, or engaged in Binance lending, as long as you meet the threshold criteria, you can become our VIP.

Among VIP levels 1-3, we refer to them as high-net-worth clients. What many people do not know is that, for example, holding $100,000 worth of assets plus a certain amount of BNB can make you a VIP 1. Starting from VIP 3, there will be more and more institutional clients, with VIP 8 - VIP 9 having a significant number of high-frequency trading institutional clients.

Institutions typically use programs or APIs for transactions, while retail investors do not have a technological advantage and usually trade on their phones. The vast majority of ordinary transaction users usually engage in activities such as swing trading, participating in initial token offerings (ITO), and wealth management. Their investment behavior is relatively single-minded. Institutional users have a more diverse participation method; besides pure trading, they also engage in lending and other investments to maximize fund utilization.

Post-Election, Global Regulation from the Perspective of Binance

The bull market cycle of 2024 was initiated by the narrative of a Bitcoin ETF. After the positive news, regulation became the first hurdle for cryptocurrency to integrate into the mainstream market. Whether it was the SEC spreading Fear, Uncertainty, and Doubt (FUD) about a particular token or the consecutive approval of ETFs, regulation and crypto-assets seemed like a pair of happy enemies. Meanwhile, Trump's re-election signifies a potential acceleration of cryptocurrency's integration into mainstream assets. Catherine provided us with insights and opinions from institutions on regulatory issues. She believes that regulation is a positive development for crypto, and Binance will actively cooperate with and embrace regulation.

BlockBeats: Currently, Bitcoin and other mainstream currencies are gradually being accepted by traditional markets. How do you view the current regulatory issues faced by Binance and crypto assets?

Catherine Chen: With the approval of a BTC ETF, regulation is a necessary part of the cryptocurrency journey. Regulatory certainty and a clear regulatory framework are essential. I believe that the crypto industry has come this far, so if it wants to continue to shine, embracing regulation is a necessary choice.

Regarding Binance, we are actively striving for compliant operations worldwide. The certainty of the regulatory framework is crucial. As a global trading platform, compliance is very important for Binance. If Binance aims to serve the next billion users, they need to earn their trust in terms of regulation.

Originally, some government officials did not understand crypto very well, but since they have taken this regulatory step, it shows that they are willing to understand and accept crypto. Overall, regulation is a good thing for the crypto industry.

Binance definitely embraces regulation and compliance, and we are actively engaged in this effort. We have obtained licenses or registrations in 20 jurisdictions globally and rank first among all centralized cryptocurrency exchanges. We hope that more friendly regulatory measures will be introduced worldwide. Facing more and more regulations and laws, I think this is a process of "educating" the traditional Web2 market. Currently, the crypto industry still has more native users, and we actively collaborate with various regulatory agencies, hoping to bring more industry outsiders into Web3 and explore a new world!

BlockBeats: Currently, the biggest narrative is the U.S. presidential election, with the market anticipating a boost if Trump wins. What adjustments do you think will be made in terms of regulation if Trump wins? How will it impact Binance? (The U.S. presidential election had not concluded at the time of this interview)

Catherine Chen: Regardless of who wins, Binance will continue to invest in compliance. Because compliance and regulation are not only important for Binance but also for the entire industry. Everyone is saying that the era of institutional investors is coming next. If Binance does not have solid compliance, reaching a level similar to traditional finance, it will be difficult to gain the trust of traditional investors.

Of course, Trump has shown a friendly attitude towards cryptocurrency in some public instances, and we are also optimistic. If Trump is eventually elected, we also hope that his remarks will be consistent. Overall, we are very much looking forward to it, but for Binance, our path remains unwavering regardless of who wins.

What changes are expected for Binance in the post-CZ era?

BlockBeats: You have a background working in top traditional financial institutions such as Goldman Sachs and Morgan Stanley. Why did you choose to enter the crypto space and join Binance?

Catherine Chen: I have always been involved in derivatives trading, so for those of us in the derivatives space, "cryptocurrency" is a concept that is easy to accept and understand. But I may be slightly different from those in traditional finance. In fact, I do not engage in trading activities, such as placing orders in a trading room. I have always played a role in the company like a "mini-entrepreneur." Before formally joining Binance, I was constantly launching new products and services at Goldman Sachs.

Leaving traditional finance and entering the crypto space is because I feel that there is no innovation in banks, and there is extreme risk aversion to new businesses. In my first five years at Goldman Sachs, I was able to smoothly promote new business ideas. However, later on, it became very difficult to advance new projects. Committees in the banks need to consider various things, and no one is willing to lead or approve new business ventures. Everyone is reluctant to take on the responsibility and risk brought by new business ventures, and in the traditional industry, real innovation is impossible. So I decided decisively to leave the traditional old-school financial institution and with my enthusiasm, plunge into Crypto.

BlockBeats: CZ is now no longer involved in Binance's operations. What do you think is different about Binance now in the post-CZ era compared to before?

Catherine Chen: Binance is different from many other exchanges. We started internationalizing very early and brought in many non-OG talents to contribute. I've been with the company for three years now, having joined Binance in 2021. The company's internationalization is already very good, and indeed, we have continuously brought in highly experienced talents.

In my three years here:

First, the company's "core values" are very clear and have been consistently upheld from the early years to the present. These "core values" can be inherited and continued, and they will not disappear because of the departure of the founder or boss. Importantly, most of Binance's early co-founders are still with the company. I find this very admirable because, to be honest, they have long been financially free, but they are all still here, still working for BNB HOLDERS because everyone still believes that there is a common goal to strive for and fight for. So even though the boss cannot come back to lead the entire organization now, under the leadership of a professional executive team, the core values established in Binance will continue to be passed down.

Second, the company actually internationalized very early on and introduced a diverse range of talents from different professions. I myself joined Binance as a cross-over from traditional finance. The bosses appreciated my experience in traditional financial institutions, saying, "Binance needs talents like you to lead the entire VIP and institutional business of Binance." In fact, during that time, the company already had a very good elite talent team.

So, to be honest, there hasn't been much change in Binance since CZ's departure. We will not stop moving forward just because CZ has left.

BlockBeats: As a leading exchange platform in the industry, what social responsibility do you think Binance bears?

Catherine Chen: I think first and foremost, what we need to do is to "lead by example." So that's why Binance is taking the lead in compliance now, and other things are also being led by Binance. We hope to establish the true market golden rules.

At the same time, no matter what Binance does today, we deeply understand that we are responsible to our large user base. So I believe everyone can see that, whether it's launching new products or various activities, Binance is well aware of its social responsibility to users. As a leading market trading platform, we need to be even more cautious. Currently, Binance's main focus is on how to ensure that this industry has the next 50, 100 years.

Binance's ambition is not only to be the leader of this industry, even though we already are. But we need to promote the whole industry to the next level, making it larger. Binance will not stop innovating just because we have grown, always thinking about how to bring more investors into the field of cryptocurrency investment and provide them with a smooth transition.

BlockBeats: From the perspective of VIP and institutional trading, how do you view Bitcoin's future development?

Catherine Chen: From the perspective of institutional clients, I think Bitcoin's current positioning is quite clear. Bitcoin, as the most widely recognized investment target in the entire crypto industry, is viewed by large institutional investors as "digital gold," serving as a diversification asset. From the perspective of institutional investors, I believe they will continue to move in this direction.

Although we are currently working hard to give it more value application, of course, with many ecosystems and capable individuals building, I still think that the situation is "up in the air" and worth paying attention to. If Bitcoin itself can find its native application, that would certainly be a better thing. But from the perspective of institutional investors, there should not be too much change. Bitcoin is usually seen as a risk management tool, used to provide different performance results in institutional investors' portfolios.

Not only is Bitcoin not highly correlated with many mainstream assets, but it also has the characteristic of 24-hour trading. The 24-hour trading feature allows institutional investors to better coordinate their portfolios when faced with traditional market closures on weekends and better manage position risk.

Regarding Bitcoin's future, although I am not a Crypto OG, I am still firmly optimistic about Bitcoin's future.