CZ vs. SBF: How Will the “Battle of the Crypto Titans” Affect the Future of Exchanges?
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Was there a winner in the “battle of the crypto titans”? In the new book “Infinite Storm: FTX Empire Rise and Fall Symphony”, which chronicles the FTX success story, there is a description of the attitudes of FTX and Binance, two exchanges, towards “regulatory compliance”. Author Michael Louis writes: “Binance is like the bully in the class, FTX’s unique ideas are like the weirdo in the class.”
Going back to 2021, the book “Infinite Storm” writes that at the time, SBF believed that getting a license and complying with regulations would eliminate non-compliant competitors; Binance founder Zhao Changpeng CZ, on the other hand, turned a blind eye to the new regulations. XREX co-founder and Chief Revenue Officer Winston Hsiung, speaking on this episode, pointed out that the two are not completely opposed in their attitudes towards regulation. In the battle between offense and defense in the market, the weirdo may really be a weirdo, but who the bully is still remains to be seen.
Hsiung believes: “The essence of the law is to restrict human behavior, while technology changes human behavior.” Regulatory risk is a challenge that the startup industry must bear.
With the establishment of the Virtual Currency Association, Taiwan officially entered the era of regulation in 2024. Hsiung, who is the Deputy Director of the Association, observed that the regulatory authorities in Taiwan actually have a high level of understanding of the industry. “They (regulators) absorb new knowledge quickly, but they also won’t overly trust the operators.”
The overall development is like a short poem, although the speed is a bit slow, it can steadily develop.
In the era of regulation, centralized exchanges will gradually enter the embrace of regulation. Operators who first comply with the rules of the game and obtain licenses can build a “moat” in commercial competition. On the other hand, regulation will also stimulate the rapid development of the “decentralized” market.
In this described battle between the “bully” and the “weirdo,” there may not be a real loser or winner, and this kind of cooperative competition will continue to play out.
Hsiung analyzes that the ultimate development of exchanges will see the coexistence of centralized and decentralized, each with its own characteristics and advantages. When everything is in order, when there are clear rules to follow, centralized exchanges will leave the wild west era. Regular forces and large institutions will also gradually enter, moving towards a more institutionalized direction.
Web3 Western Advance
Hosted by XREX co-founders Wayne Huang and Winston Hsiung, and Yoyo, Senior Director of Corporate Communications at XREX Group, take you through the concept of decentralization, understanding the Web3 world from various perspectives.
Summary of this episode
On the issue of compliance, what are the epoch-making meanings and impacts behind CZ and SBF’s ideas diverging in 2021?
Who is the “bully”? Who is the “weirdo”? It’s hard to say everything.
How does the relationship between operators and government tug-of-war with laws restricting human behavior and technology changing human behavior?
Can “land in various markets” build competitive moats?
What is “regulatory risk”? How should exchange operators control it?
The big showdown between centralized and decentralized! What will the future of exchanges look like?
The first physical gathering of “Web3 Western Advance” is here! Openly recruit the themes you want to hear the most
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Source of music
MusicbyAden – Earth
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This episode was produced by XREX in collaboration with “WEB3+”.