A Top Crypto Exchange CEO Explains Why The 2020 Boom Is Different

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal. And unfortunately, this week, my co-host Tracy Alloway is off, so she's not going to be joining us. And I swear, or she swears, that it's not just because we're going to be talking about cryptocurrencies today. She really couldn't make it.

But in fact, we are doing another crypto episode, and I'm really excited about our guest today, a very important player in the industry. Of course, over the last several months, along with everything else, everything is going to the moon these days, stocks, gold, bonds, you name it. Cryptocurrencies are no exception, and it feels like there is certainly the most amount of enthusiasm that we've seen in crypto probably since the boom in 2017

And still the questions remain, and there's still plenty of skeptics. What's it for? Where's this all going? Is this just another bubble that will burst like last time? So we're gonna dig into some of these questions today.

Very excited to bring in our guest, Catherine Coley. She is the CEO of Binance US, a cryptocurrency exchange. In the US, a wholly owned subsidiary of Binance, which is one of the biggest cryptocurrency exchanges in the world. Catherine, thank you very much for joining us.

Catherine Coley (1:35)

Thank you so much, Joe. Really excited to be on.

Joe Weisenthal (1:38)

So I do remember last time during the last boom, 2017, we did see the emergence of Binance, which is the company that owns you. Just what is the structure and relationship of Binance and Binance US?

Catherine Coley (1:55)

I hate to come out of the gates correcting you on a couple of things, but I'm going to.

Joe Weisenthal (1:59)

So- Okay, that's fine, that's fine.

Catherine Coley (2:01)

So binance.com, it's a global ecosystem that really has been around for about last three years, really expanding the access around the world for people to engage with digital assets.

And around last year in the summertime, I joined to become the CEO of Binance US, which is actually an independent entity, entirely run out of the United States with the ability to license the technology that binance.com has. So you think about matching engine, the tech stack that's really there, we're able to really bring that into the US, as well as customize it entirely for an American audience.

So when you think about a crypto to crypto global platform, so many things are so different in the United States, the on ramps, ACH, debit cards, wires, all the dollar components. So everything has to be custom fit and made specifically to the US. So that's really where Binance US comes in. The other components are the US regulation. So in terms of Binance US, we're registered with FinCEN, we are regulated by the state level with the money transmitter licenses, fully operating in 38 states, with the newest state being Florida. And so everything we're doing is in line with the US regulation, as well as catered to an American user.

Joe Weisenthal (3:24)

Got it. Okay, with that out of the way, and I appreciate you clarifying it, and I want people to understand what the exact structure is.

Let me start with what I see as sort of one of the issues or problems with the cryptocurrency industry writ large as a market. And I'm sure that-

Catherine Coley (3:43)

Air it out, I wanna hear.

Joe Weisenthal (3:44)

I'm sure you'll disagree with me, but this is something that I think about a lot. So late 2017, people started getting like super into Bitcoin, also Ethereum and maybe a couple of others.

And then by like November and December of that year, suddenly the market was just flooded with supply. And suddenly it's like, and now here, buy some Bitcoin cash. And then here buy like eight more hard forks of Bitcoin cash. Oh, and there's like 50 other ICOs. And so basically you have this thing, which kind of started off essentially as Bitcoin and Bitcoin alone. And one of the big selling points was the fact that it is unique, that there's a fixed supply of it. But then the industry strikes me as manufacturing so many new assets to capture the demand for crypto. And so suddenly exchanges become, in my mind, flooded with new coins, new project very fast. The incentive for new players is not to jump on a project that say has already gone up 10,000%, but to start a new project that could itself go up 10,000%.

And so then eventually it all sort of comes crumbling down because the investor, the end buyer, is just sort of choked with so much supply. And so, hey, I'm curious if you think that phenomenon is real. It seems like that way to me. And are we seeing it again this time with the sort of numerous, the hundreds of new coins that seem to be emerging out to the ecosystem every day?