TBW #60: Brian Armstrong fears the... China

TBW #60: Brian Armstrong fears the... China

Read all about The Big Whale's 60th Premium newsletter.

Hello Whales and welcome to the little newcomers who have just joined us in the Premium edition! There are more of you every week. Thank you so much 😍

To devour this week

🖊️ Editorial

🗣 Our exclusive news

🎙️ David Prinçay (Binance)

💶 Heritage NFTs


Where is Europe?

Brian Armstrong is a rather discreet man, but for the past few weeks, the Coinbase boss has clearly been all over the place. You can see him on television, on the radio, on social networks... The aim of this omnipresence? To try and get the US regulator (SEC) to back down, at least a little, as it has decided to tighten the screws on cryptos after a succession of scandals, like FTX.

For the moment, the 38-year-old American's counter-offensive is far from having worked. Perhaps that's why he's just taken things up a notch by signing an op-ed in which he explains that the US is making a "huge mistake" with cryptos and that the big winner of that mistake will be... "China". Yes, China 🤨.

Because contrary to what many believe, while Europe has many assets in cryptos, including its talent, start-ups and its regulation with MiCA, it is not alone on the planet, and China has never really turned its back on the web3.

While some people continue to explain every year that Beijing has banned bitcoin mining, the world's second-largest power, which is rolling out its digital yuan across the country, is encouraging its tech giants to work on metavers, NFTs and anything else that will enable it to be a leader in a sector of the future 👀.

The fact that Beijing has just published a white paper on the subject of Web3 is the best example of this: in the official document, the Chinese authorities talk about the potential of this new Internet and the need to invest massively in it.

At the same time, Europe, too, needs to get its act together. And the fact that Brian Armstrong is more worried about China's rise than Europe's shows just how far Europe still has to go to become a REAL web3 powerhouse....


Our exclusive news 🔥

👉 Coinhouse confident in Genesis case

Everything is far from settled in the Genesis case, but things are moving forward and some customers could be compensated fairly quickly. According to our information, the US company has managed to recover a "large part" of the $175 million it had itself lost in the FTX collapse in November 2022 😬.

Several companies such as Coinhouse had used Genesis' services for their yield product, which paid 6% to their retail customers.

In an interview with The Big Whale, the boss of the 🇫🇷 platform, Nicolas Louvet, had explained that the loss to his clients amounted to $15 million and that the company would cover his clients' losses while waiting to recover the money directly from Genesis....

"Historically, cases of this type have shown that it is possible to recover a large part of the money; at Lehman Brothers the creditors ended up recovering 100% of their assets, so you have to be patient," explains Nicolas Louvet. Louvet says he has received several offers to buy back Coinhouse's Genesis credit line in cash. The broker says it has turned them all down.


Mapping the European ecosystem

All European projects that wish to do so can enter their information and appear in "The Ocean".

Each project included in this mapping will have the opportunity, after a vote by The Big Whale's 300 founding subscribers ❤️, to:

👉 Pitch the project to The Big Whale community (20,000 members)

👉 Be visible (with a listing) within a dedicated space in The Big Whale

The questionnaire is available by clicking here, and takes just a few minutes.


David Prinçay (Binance): "There will be no adoption as long as it's the Wild West"


By Grégory Raymond and Raphaël Bloch (in Paris)

Arrived at Binance in 2020, David Prinçay has made France one of the strategic countries for the planet's largest platform. In an interview with The Big Whale, he looks back at his personal journey, his relationship with Binance's much-hyped founder, "CZ", as well as the company's organisation and financial health.

You head up the French subsidiary of the world's largest exchange platform, but few people know about you. How did you get to this position?

My story is rather atypical. I've been involved in the sector since 2017, when I created a Facebook group with some friends called the "French Cryptocurrency Club" in which we offered a review of news links on cryptos.

As a result of asking around and learning about the subject, I met the Binance teams at Paris Blockchain Week 2019. Our first discussions focused on a crypto-donation that had been made after the fire at Notre-Dame de Paris to fund its reconstruction, and which Binance had wanted to join.

I then joined their team of "angels" (volunteers, ed. note) to help them, particularly with translation. That's how I began to understand how Binance worked, what its corporate culture was, and so on. At the time, there was no one in France to represent the company...

And that's how you came to apply to head up the French entity?

It happened in several stages. I initially applied in 2020 for a community manager position, which I thought I'd get fairly easily. I was already in their world, I knew blockchain, I had the right qualifications, so I thought it would be fairly easy, but it didn't go as planned and I was rejected. I must admit that I questioned myself quite a lot and that was a very good thing...

Three months later, Binance opened the position of director for France, I applied for it, and I got it at the end of 2020! I remember it was right in the middle of Covid-19 🦠.

What's your relationship with Changpeng Zhao, aka 'CZ', the boss of Binance?

I didn't meet him when I was recruited, that came later. There's a lot of fantasy about "CZ" (read his interview), who he is, what he can do, but in reality, he's a personality like any other except that he's well-known.

I took a while to talk to CZ, I even refused to for the first few weeks, because I didn't want to just see him for the sake of seeing him, and he's got a lot to deal with. CZ is my boss, not my friend. We see each other when it's really necessary.

Fairly, Binance is in the process of shedding some of its staff, not least to adapt to market conditions. Haven't you taken on too many people since 2021, with more than 4,000 people? Who in the company is affected? Is France affected?

The figures put forward by some people are not correct. Binance is not cutting 20% of its workforce. And in France, Binance is recruiting for specific positions!

How is Binance France organised?

We have several facets. The first concerns the regulatory aspect, as we are registered with the Autorité des marchés financiers (AMF). We are gradually moving from start-up status to that of a financial institution, which requires a lot of work, particularly to adapt a global structure to national regulation. This is a daily task.

The second level is in marketing. We are working hard on educating the public. We have launched a tour of France, visiting a new town every month to meet our community.

The third level is business development. Masterfully led by Christelle Tang, this involves building an ecosystem of partnerships and use cases. These include Ingenico to roll out an in-store cryptocurrency payment solution in France. Or, among many others, the Printemps Haussmann shop, which is offering a 5% discount to all Binance cardholders.

How many employees do you have in France?

150 employees are present in France, including 70 who are 100% focused on France. The others are involved in cross-functional, more global tasks.

Does everyone work at the head office in Montrouge on the outskirts of Paris?

The head office is not in Montrouge, it's at another address that remains confidential.

Why is the real address hidden?

For security reasons.

What is your policy on teleworking?

People are free to telework. Personally, I like it when they come into the office to synchronise. It's always more efficient as well as being more pleasant.

CZ had mentioned a year ago a €100 million envelope to fund the French web3 ecosystem. How far have we got?

We've created 150 jobs, which is not bad. We also have an incubator at Station F, as well as a number of projects in which we've invested close to €10 million.

We've also carried out sponsorship operations (€2 million for the renovation of the Œil-de-bœuf salon at the Château de Versailles), donations (notably to the Red Cross), financial partnerships to support schools (Simplon, etc.), venture capital investments (via Binance Labs), and so on.

What do you think of regulation and in particular the European MiCA regulation that has just been adopted?

I think it's a good thing. There will be no adoption as long as it's the Wild West, and nothing is regulated.

To turn a corner, as in traditional finance, you need a regulated market. This helps create the right conditions for adoption that goes beyond an informed public won over to cryptos.

Shortly after your registration with the AMF, you announced the recruitment of one of its former directors Stéphanie Cabossioras. What is your response to those who accuse you of a conflict of interest?

Honestly, I'm rather surprised, because I don't hear these comments when an AMF executive goes to work for a bank. But let me be clear: the process of registering Binance in France was not organised by Stéphanie Cabossioras. She had absolutely no interference in this process.

Today, her presence as CEO is particularly valuable for our development and the success of our ambitions.

Binance is very present in associations, invests in many start-ups... Is your ambition to become the centre of the ecosystem?

Our desire is to enter an environment and do business. When we invest in a company, it's not for the sake of good relations, but because we consider that the start-up has potential.

When we join a professional association, such as Adan (Association for the Development of Digital Assets), it's to make our voice and expertise heard. We can't carry the messages we want to convey alone all the time.

How do you respond to certain competitors, such as Pierre Noizat, the head of Paymium(read his interview), who say that Binance has a "regulatory debt"?

It's the lot of all leaders to be the target of criticism, but my main point is that those who say that take advantage of it to do their own publicity. When you talk about your competitors, it's often because your product hasn't been a leader for a long time and you're criticising others to try and benefit from their notoriety.

When you're a small local exchange, like Paymium, but there are others, the best way to get exposure is to point the finger at the biggest. At the end of the day, these people are discussing a subject they don't really know anything about...

Not everything in the reviews is necessarily to blame... Why has KYC only been mandatory with you since August 2021? Before that date, it was possible to withdraw up to 2 bitcoins without giving your identity.

We simply followed the regulations.

And yet, the American regulators are criticising you for this lack of KYC...

That's not true. The CFTC (the American derivatives regulator) is criticising us for welcoming American clients, knowingly or unknowingly, on the Binancecom platform. That's all they're accusing us of. I don't mind discussing these issues, but only if we go into the details of the cases.

Other criticisms include transactions in Iran, which is affected by the US embargo.

That's another subject and investigations by certain media that are patchy.

Your stablecoin dollar (Binance USD) will soon have to shut down for regulatory reasons in the US. Could you relaunch a similar project around the euro?

Of course, because we have found that a single stablecoin is not necessarily the right solution. In a decentralised world, there needs to be a multitude of solutions.

There are already a lot of stablecoins and others will continue to arrive. Our aim may not be to create a stablecoin on Binance and leave it solely with us. But everything moves very fast in the blockchain.

Are you already working on it?


What are the big projects you're currently working on?

There are a lot of possible answers, because Binance is no longer just a platform for trading cryptos. We offer return products with Earn, the Binance Card payment card. We are also actively working on bringing back certain products.

My philosophy is to manage to offer a better understanding of investment. We know that the French are rather conservative on these subjects, and we won't change them, but if they are better educated, then they will be better able to seize opportunities and invest on Binance. After that, we're also going to develop the application, it's going to change to become even simpler to use.

How are you preparing for the entry into force of the European MiCA regulation?

We're working hard on this point, it's very important that we're in order to operate on European territory.

You've had to suspend futures contracts in France and other European countries. When will they be available to users again?

We are also working on this, but I can't say exactly when they will be back. We are continuing our discussions with the authorities.

In contrast, you have just announced that certain private cryptocurrencies, such as Monero, will be delisted. Why is this? Is it also because of regulation?

While we aim to support as many quality projects as possible, we are obliged to respect evolving local laws and regulations regarding cryptocurrencies, to ensure that we can continue to serve our users.

As part of Binance's ongoing compliance processes, we have contacted affected users to inform them that they will no longer be able to purchase or trade certain privacy tokens on our platform after 26 June.

A year ago, no one imagined the collapse of your competitor FTX. How can you be sure that Binance is in possession of customer funds?

We have put our proof of reserve online and anyone can check what's on it in real time. I would add that we do not collateralise our clients' funds.

This is also what FTX boss Sam Bankman-Friedsaid. How can you prove that this is not the case?

Real-time reserve evidence is something important and FTX didn't have it. If it had, we could have seen that there was a problem. The second concern in this story was the company's culture.

Actually, what is Binance's culture?

You have to be humble and operational.

CZ often says that the success of a company is "2% strategy and 98% operational". Everyone was able to see this during the previous Bull Market 🐂: we didn't do a lot of sponsorship, we didn't put our name on football stadiums and the like.

This shows that we are quite cautious about the way we work. Far too many players lose their heads when their company becomes successful.

CZ has a systemic role in the organisation of Binance. Shouldn't the governance of the company be opened up a little, especially as it is the target of investigations in the United States?

CZ is not at the centre of all decisions. Many decisions are taken without him, but we have processes in place to check that they are taken properly.

As far as the CFTC investigations are concerned, we are only at the hypothesis stage. An investigation is currently underway and we are cooperating with it. We'll get to the bottom of it and see where it takes us.

Do you feel that the Binance case is being treated more politically in the US? TikTok and Huawei in particular have been the subject of similar attacks...

As a Frenchman, and having a father working in aeronautics, I note that there has always been a form of American protectionism. We've seen it in France with Airbus, Alstom and many others...

What impact can legal threats have on a company's dynamics? Do you feel affected within the French subsidiary?

This is having an impact, but we have to keep working. We're not going to stop building, because something happened 6,000 kilometres away from France.

What checks and balances are there to ensure that everything is done properly within the company?

Regulation has made it possible to set up governance verification mechanisms. In fact, this is how Binance France was created.

The more regulation advances, the clearer our governance. And shareholding does not define the governance of a company. We are a transparent company.

Isn't the promotion of Richard Teng, who will head up all of Binance's non-US activities, a sign that CZ had too much power?

Before joining Binance, Richard Teng held positions at various financial institutions such as the Singapore Exchange, the Monetary Authority of Singapore and Abu Dhabi Global Market.

He is an internationally recognised figure on financial matters. He joined us in 2021 and personally, he has always been a good mentor to me. He's an excellent manager and, above all, he's an ally for France. This development is really excellent news.

Can you publicly disclose the location of Binance's global headquarters?

It's worth remembering that we've gone from being a small start-up to the biggest player in blockchain in just six years.

What are we supposed to do? Take a six-month break where we do nothing more, or keep moving forward and try to structure ourselves? It all takes time, but we're moving forward.

Is it Binance's lightning growth that explains why there's no global structure and several entities scattered around the world?

We're in a decentralised environment, so it made sense not to have a centralised headquarters, but that was at the beginning, in 2017.

With regulation, we realised we had to work differently. Our desire to resemble decentralised projects, pure web3, has reached its limits. We need to redefine ourselves and look like a more traditional financial institution.

Where might the centre of gravity lie? Europe, Asia?

I don't know, it's still under discussion. After that, if you ask me personally, I have a clear objective, and that's France. But it's all still too early.

Binance still has a lot of work to do and so does France. After that, if France is the vanguard of Europe that will already be a great success.


The replay of last Monday's Big Talk is available to listen to here: "PSAN approval: Everything you need to know about the tightening of crypto regulations" 👋


NFTs : An investment that has become a heritage


By Raphaël Bloch (in Paris)

Sought after by some investors for their highly speculative dimension, NFTs have also become long-term assets for others, like art or real estate.

The rest is available on 🐳.

This edition was prepared with ❤️ by Raphaël Bloch and Grégory Raymond. The Big Whale is a free and independent media. By supporting us, you are contributing to its development.

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