Binance Founder Changpeng Zhao on Japan, Prison, Free Education, and an AI-Driven Crypto Economy
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In this exclusive interview for PIVOT GLOBAL, Binance founder Changpeng Zhao (CZ), speaking from Abu Dhabi, looks back on how Japan shaped Binance's early days, gives his view of Japan's crypto tax reform and tokenization, and discusses his guilty plea and time in prison in the United States. He also describes his free education platform, Giggle Academy, and explains why he believes AI agents will drive a large increase in crypto transactions within about five years. His overall message is that the past is behind him, and that he now sees AI, blockchain, and entrepreneurship as the biggest opportunities of the moment, including for Japan.
Japan as the Starting Point
CZ said Japan is "a pretty big part" of his life. His first job after college was in Tokyo, at a firm that developed software for the Tokyo Stock Exchange. He said that was where he first learned about trading systems, order execution systems, and exchange systems. He estimates that, counting later years of travel back and forth, he spent six to seven years in Japan in total. He still visits Tokyo often and goes snowboarding in Niseko, Hokkaido, almost every winter when he can.
The interviewer asked whether the software he built in Tokyo laid the foundation for Binance. CZ agreed. He called it the first of several iterations. That early work was in C++, where "you have to clean up your own pointers" and manage memory yourself. In his telling, that line of work "evolved all the way into" the Binance system that exists today.
Moving to Tokyo After China's Ban
Binance launched in Shanghai in July 2017. About six weeks later, China banned crypto exchanges, crypto mining, and ICOs. CZ said the policy was initially unclear. Even so, the team of about 30 people already had product-market fit. Users were signing up organically, and both users and trading volume were growing.
He said China then made up roughly 20–30% of exchange volume, so 70–80% of the market was elsewhere. Japan looked like a natural place to go. CZ said Japan had recognized Bitcoin as legal tender in April 2017. He also said that in September and October 2017 Japan began registering crypto exchanges, with about 16 in the first batch. To him, this meant Japan offered a legitimate path to operate. The whole team moved to an office in Meguro, Tokyo, and renovated it. He said photos of that office appear in Binance's marketing materials. He added that serving the international market from Tokyo worked the way they had planned.
The fit did not last. Binance listed hundreds of altcoins, but Japan at the time allowed only 10 to 20 top coins. That rule did not match Binance's business model, so Binance did not stay in Japan long. CZ noted that Binance came back about four years later. Binance Japan now operates with a full license and is run as a joint venture with SoftBank, which he linked to "Masa-san." He summed it up: "we went to Japan, we left, and we're now fully back."
How Binance Became the Largest Exchange in Five Months
By CZ's account, Binance became the world's largest crypto exchange by trading volume on about December 17, 2017, roughly five months after it was founded. He gave several reasons:
- Prior experience. He had spent 17 years building exchange systems before Binance.
- The team. The team was small but strong.
- Timing. 2017 was the ICO year, with many new tokens, and Binance focused on listing new tokens. He said about five of the world's top ten exchanges were Japanese at the time. Because they were limited to 10–20 tokens, he believes they "lost quite a lot of competitiveness."
He said staying at number one afterward was harder than getting there, and that Binance has done so for nine years. He credited both hard work and "quite a bit of luck."
The interviewer suggested that trust also played a part. CZ described exchange customer service in 2017 as very poor. A stuck Bitcoin withdrawal could mean waiting two months for a reply from support, and Binance set out to improve that. He also described a voluntary compensation plan from the time of China's ban. Binance used $6 million of its own money, which he said was about 40% of its treasury, to compensate users who had lost money because of China's policies rather than because of Binance. He believes these actions meant a lot to users and helped the exchange grow.
The 2018 Flood Donation
The interviewer noted that Binance left Japan in early 2018 after questions from Japan's financial regulator. A few months later, in July 2018, devastating floods hit western Japan, and Binance donated $1 million. The interviewer thanked CZ for it.
CZ said he sees the business side and his personal connection to Japan as "completely separate." Binance could not run its exchange business in Japan. But he has many friends and former colleagues there, and he said about 81 people died in the floods. He believes it was the first time any crypto platform had donated that much to a good cause. He also said the donation marked the beginning of the Binance Charity Foundation, and that he and the team are proud of it.
Japan's Crypto Tax Reform
The interviewer described a new Japanese law under which crypto will be treated more like stocks, with the tax on crypto gains set to fall from up to 55% to about 20%. CZ called both changes very positive. He considers 20% a reasonable capital gains rate, in line with how Japan taxes stocks, and favorable compared with many other countries. He expects it to bring "quite a lot more volume back into Japan."
He added that crypto has more uses than stocks, such as paying for things. If crypto payments grow, he hopes Japan will adopt favorable transaction or VAT tax treatment. For now, he said, those use cases are still small, so adjustments can come later.
Japan's Regulatory Arc and Raising Money with Crypto
From an investor's point of view, CZ said Japan's regulations have always been clear, so founders know what they can and cannot do. He described roughly 2017 to 2021 as a period of heavy restrictions, when many Japanese and foreign founders left. Japan then opened up again around 2021–2022. He sees early adoption followed by a later loosening as evidence that Japan is "very flexible, very adaptive." He said both Japanese and foreign crypto businesses are now moving to Japan, including Binance, which he said regained a license in 2022 and partners with SoftBank, PayPay, and others.
Asked whether this could help Japanese startups during a tough period, CZ said raising money with crypto is probably one of the easiest ways to raise money. He said it is so easy that many scammers do it by launching tokens, which he called "not good." For legitimate startups, though, he thinks it works well, and Japan should take advantage of it. He said he had seen many good Japanese founders raise money this way and "not that many scammers from Japan, to be very frank." He described Japan as a fairly honest society. Projects there may fail, he said, but they are not usually "rug pulls." He wants Japan to encourage more founders to raise money with crypto.
What Governments Ask About: Exchanges, Stablecoins, and Tokenization
CZ advises many governments. He said their questions fall into two big buckets, with stablecoins sitting in between.
The first bucket is regulation of mostly centralized crypto exchanges. Within regulation, governments are now also looking at stablecoins. He said Japan has regulated exchanges for a while but has been restrictive on stablecoins, and yen stablecoins are only now starting. In his view, the yen is a large global currency, yet about 99% of stablecoins are backed by the US dollar. He thinks it would benefit Japan to push yen stablecoins more. He described a stablecoin as "really just tokenizing of the local currency."
The second, larger bucket is tokenization. He said every country wants to tokenize its assets, including government bonds, financial products, buildings, and rare earth minerals. He pointed out that tokenization lets an issuer sell an asset before it is built. As an example, he described talks with a country that produces a lot of water. Neighboring countries could buy water tokens in advance, and the money would fund infrastructure to supply more clean water.
He also argued for tokenizing stocks: "Which country doesn't want their stock to be bought by everybody in the world?" He said more buyers would bring more trading volume and liquidity to local exchanges and companies, and more investment into a country such as Japan.
The "Japanese Way": Cautious Decisions, Fast Execution
The interviewer mentioned JPYC and major banks preparing yen stablecoins, and asked how Japan should scale them. CZ described what he called the Japanese way: start very carefully, with a lot of planning. Once something works, he said, Japan multiplies it very quickly. He sees the caution at the decision stage and the strength at the execution stage. He pointed to the exchange story from 2017 to 2021–2022 as an example. He thinks stablecoins are now at a turning point after years of restrictions on yen stablecoins.
He hopes Japan will go on to tokenize its stock market, which he said the US and many other countries are already doing, as well as ETFs, government bonds, and other assets. He said he is "pretty confident about Japan's ability to execute."
The Guilty Plea, Prison, and Stepping Down
The interviewer summarized the case. In 2023, CZ pleaded guilty in the US to one charge, related to Binance serving US users without registering there and having insufficient anti-money-laundering checks. CZ stepped down as CEO, spent four months in prison in 2024, and was pardoned last year.
CZ said the summary was accurate. Binance had US users roughly from 2017 to 2019 and did not register as a US financial services company. He described this as a violation of the Bank Secrecy Act. The US government pursued Binance in 2022–2023, and he admitted the violation and pleaded guilty. He emphasized that he flew to the US voluntarily from the UAE, which he described as a non-extradition country. He said he "didn't want to live my life as a fugitive" and wanted to face problems "head-on."
He called it an unpleasant experience and a lesson he would not want to repeat. He also stressed his view of what the case was: "There's no fraud. There's no victims," and it was a "financial registration crime." He said he was glad users were always protected. Binance is now run by his co-founders and a senior executive team, and he said they are doing well.
CZ also described an upside. It would have been hard to step down voluntarily, because people would have said he had "run out of stamina" or lost interest. Being forced out, at age 49, left him with energy, time, resources, and the freedom to choose what to do next.
On Fairness and Not Looking Back
When asked whether the hardest part of prison was physical or mental, CZ did not answer that directly and talked about fairness instead. He said that, as far as he knows, no one in US history had gone to prison for a single Bank Secrecy Act violation, which was his case. He cited Bank of America being fined $1.2 billion for offenses he considers more serious than his own, with no individual charged.
He then called it "water under the bridge." He said "the world is never fair" and that no two cases are the same. In his case, he was in crypto, was unregistered, and was "a Chinese-looking dude" running one of the largest international platforms handling a lot of money. He said he does not look back, that he believes "everything happens for a reason," and that he tries to take the best from such experiences.
Giggle Academy: Access to Education
The interviewer pointed out a common thread: Binance opened access to finance, and Giggle Academy aims to open access to education. CZ agreed. He said society cannot guarantee everyone the same amount of money, but it should give everyone equal opportunities to earn, to learn, and to manage their own finances. After leaving Binance, he asked himself what would have the greatest positive impact and chose education.
He described several problems with education today:
- Illiterate adults. About 700 million adults are illiterate, two-thirds of them women, mostly in Southeast Asia and Africa.
- Children without schooling. About 500 million children are not in school, either because there is no school available or because it costs too much.
- Schools that push students toward average. Students who are strong in Japanese but weak in math, for example, are told to study less Japanese and more math. In his view, a global workforce rewards being excellent at something, not being average. The interviewer remarked that this happens a lot in Japan.
- Teacher quality. Teachers are underpaid, so on average the smartest people do not become teachers. Only a few passionate ones stay, and overall teacher quality is low.
His answer is to deliver education through an app that uses AI, gaming technology, and mobile access. The team has worked on it for about two years. They first planned to start with first-grade English but found that six-year-olds already differ widely in level, so they moved earlier. The app now starts at age two, when children can begin to pronounce words properly, and has content up to about age six.
CZ described the app as "very sticky." He reported growth from zero to 2 million children in two years. He said the platform had about 100,000 children at the beginning of 2026, which he described as 20x growth in the last year. He takes this as evidence of huge demand for free education. He said he spends about $5 million a year on a team of 50 people building the software, and that costs are mostly fixed. He expects to reach 100 million children soon and hopes for billions eventually. He said every meeting with the Giggle team makes him happy, and that helping others makes people happy.
How a Free Platform Stays Funded
CZ said the app is completely free, with no in-app purchases, no premium features, and no way to pay. He funded it himself at first. He said a good deal of community funding has also come in "through meme coins and other things," which he did not foresee.
His long-term plan works like this:
- Personal funding for about 20 years. He says he can fund it at around $5–20 million a year for that long.
- Optional alumni giving. By then, children who learned on the platform for up to 18 years and found good jobs could be asked whether they would contribute 5–10% of their income for a few years, entirely by choice. He thinks many would.
- Low running costs at scale. He argued that teaching 2 million children costs about the same as teaching 2 billion. He estimates the platform will cost under $20–50 million a year "for a very, very long time," so a fairly small number of alumni donors could sustain it.
He said he is committed to supporting it until it becomes sustainable. He also mentioned other possible sources of money, such as corporate endowment or education funds. He has not yet started talking to them, although many have expressed interest. The current bottleneck, he said, is hardware: devices and connectivity, for example from phone makers, internet service providers, or Starlink. He described himself as "a software guy, not a hardware guy." He added that AI is dramatically reducing the cost of maintaining the platform, and he considers it fully sustainable.
AI Agents Will Need Crypto
As an investor, CZ backs founders in Web3, AI, and biotech, and said he is investing heavily in AI. He sees three major technologies in his adult life, each about 15 years apart: the internet, blockchain, and AI. He believes AI will raise productivity in many fields and that "we're just starting to understand the potential impacts."
His central argument is that AI needs money. He expects each person to have hundreds, thousands, or even millions of agents working in the background. After an interview like this one, for example, agents could edit the video, publish it, market it, and collect payment from viewers. In his view, these agents will not use credit cards or bank accounts. They could use our accounts on our behalf, but that is "not ideal." The natural option, he said, is a digital-native currency, which is crypto.
He predicts AI will increase transaction velocity "by probably like a thousand to a million times," and that transactions will get smaller. A viewer could pay one yen to watch a single video instead of buying a 20,000-yen subscription, choosing whichever is cheaper. He expects these micro-transactions to be everywhere.
Beyond payments, he said AI needs digital certification and verification, which he believes should be done on blockchain. He thinks governments should become fully digital, and said Japan is advanced in some areas but "old school" in others. If records were digitized, he said, a home buyer could have AI trace the transaction history of the house and of nearby houses. He believes AI and blockchain together will make society far more efficient and raise transaction volume, which he equates with more economic activity.
Asked about timing, he said less than ten years, "more like around five years or less." He said the technology is moving exponentially, so the bottleneck is human adoption and government legalization. He argued that society is run by elders and that the human brain takes about 5 to 10 years to accept a new concept.
Are Japanese Companies Ready?
CZ said Japanese companies are "definitely ready." He rejected what he described as a Western stereotype of the Japanese as stubborn, slow, and rigid. In his view, Japan preserves tradition in some areas but is also a very early adopter of new technology, especially digital gadgets. He considers Japan somewhat weaker than the US in software but always open to new technologies, and he expects Japanese companies to adopt quickly.
Advice to Young People in Japan
The interviewer asked what CZ would tell a young programmer in Tokyo. He said today is "a much better day to build startups than any day in history before." There may be better days in the future, but none better so far. He said the big sectors are clear: AI, blockchain, and the internet. If someone in one of those areas finds something people need that they can build, he thinks their chances of large success are "actually quite good." His advice was to learn new technologies as fast as possible, figure out what you can do, what you like, and what is valuable to others, and then start building.
He said the future world is "much more geared towards entrepreneurs." He acknowledged the Japanese tradition of lifetime employment as a salaryman and said, "Unfortunately I do not recommend that path." He recognized this may be controversial in Japan. He still recommended the entrepreneurial path, which he described as carrying "a very large amount of uncertainty, a lot of pain, but also a lot of reward, a lot of positive impact, and a lot of financial reward." When the interviewer added that AI is making this easier, he agreed. The interview ended with an invitation to the PIVOT studio the next time he is in Japan, which he accepted.
Thanks for having me.
It's a real honor to have you on PIVOT, but where are you joining us from today?
Abu Dhabi.
Abu Dhabi. I know these days you're investing and you're also building an education project, and I'd love to hear that later. But you seem to be in a different country almost every week.
Yeah, I travel a lot. I also go to Japan a lot. I like Tokyo. I like Hokkaido. I like Japan a lot.
Since stepping back from Binance, have you had a chance to come back to Japan as well?
Yeah. I visited Tokyo many times, and then I also visited Hokkaido for snowboarding a few times, too.
Oh, wow. That's nice. I really enjoyed your book, and especially seeing the industry and your journey through your eyes. But as a Japanese reader, what surprised me most was how much Japan meant along your path. For our viewers, how would you describe Japan's place in your life?
Japan's a pretty big part of my life, actually. My first job out of college is in Japan. I worked in Tokyo for a firm that develops software for the Tokyo Stock Exchange, TSE. That's where I first learned about trading systems, order execution systems, exchange systems, etc. It actually is a pivotal part of my journey.
And then, over the years, I would say probably in aggregate, I probably spent somewhere between six to seven years in Japan altogether. But I was traveling back and forth quite a bit in some of the later years. And I go to Niseko to snowboard almost every winter when I can. Japan's a big part of my life.
That's so nice to hear. But wouldn't it be fair to say that the software you built in Tokyo at that time laid kind of a foundation for Binance?
I would say so, for sure. It's multiple iterations, right? That's probably the first iteration. For the technical folks, that was the C++ pointers. You have to clean up your own pointers, memory allocation, etc. And that evolved all the way into the Binance system today, to be honest.
Like you said, years later, Japan came back into your story again. How did that happen?
We started in July 2017 in Shanghai, but within six weeks, China banned crypto. And that was in 2017. And also in September–October 2017, Japan started to license crypto exchanges, or the crypto exchange registration in Japan. I think the first batch, there were 16 exchanges. And also, even in April 2017, Japan recognized Bitcoin as a legal tender. So we thought Japan's very advanced in terms of crypto regulation. It's one of the very early countries to recognize Bitcoin as a legal tender.
So I moved the whole team to Tokyo, in Meguro. We rented an office and started renovating it. You see some photos of that in our marketing materials. Japan was a pretty important part of the journey.
So in a way, the seed of Binance was planted in Japan. Now I would like to move on to the founding of Binance itself. For our viewers, here's the timeline. In July 2017, like you said, CZ launched Binance in Shanghai. Just six weeks later, China banned ICOs and crypto exchanges, like you said. So you were only six weeks in, right? About?
Yep.
What went through your mind when that ban happened?
When that ban happened, it was a bit unclear. The policies were basically China banned crypto exchanges, crypto mining, and ICOs. At the same time, Japan started licensing crypto exchanges, basically offering a very legit way for crypto exchanges to operate.
So I thought, we're a small team. We're a team of 30 people. And even within six weeks, we saw the product-market fit. Our product was working. People are signing up organically. The platform's growing. The number of users are growing. The trading volume is growing. So we had a viable product. And at the time, China accounted for 20–30% of the exchange volume. So there's still 70–80% of the volume outside of China.
Japan is a very international country. So we thought by moving to Tokyo, we can continue to service the international community. And that actually worked out the way we envisioned. That worked out quite well. But we were an altcoin exchange. We listed hundreds of altcoins. Japan at the time only allowed 10 to 20, what we call the top coins. So that registration didn't fit our business model. We didn't stay in Japan for long due to that reason.
But we were now able to come back to Japan four years later. Now Binance Japan is operating fully licensed in Japan. And it's also operated as a joint venture with SoftBank, Masa-san. So we went to Japan, we left, and we're now fully back.
When you come to think about it, by then there were already many big exchanges in the market, right? Yet within five months of launch, Binance became the largest in the world from an office in Tokyo, right? Looking back, what made Binance win so fast?
Binance actually became, within five months of founding, I think on December 17th, 2017, the world's largest crypto exchange by trading volume. I think there's a few things. Even though Binance took five months, I had a history of spending 17 years before that building exchange systems. For the previous 17 years, I was working in this industry.
And we had a strong team. The team of 30 people, even though quite small, they were quite good. We also benefited a little bit with the situation. 2017 was an ICO year. Everyone was doing ICO. There was lots of new tokens. And Binance was an ICO new tokens exchange, whereas most of the Japanese exchanges were limited to 10–20 tokens.
At the time, actually, of the top 10 exchanges in the world, maybe five of them were Japanese exchanges. But because of the limited token offerings, they lost quite a lot of competitiveness. They lost quite a lot of business. Binance kind of benefited from the ICO boom in 2017. And then after that, it was difficult to stay at number one, but Binance did that for the last nine years. There was a lot of hard work from the team, but there was also quite a bit of luck.
I know you're humble, but I understand you made a big decision about your users' losses around that time. And I believe that a ready-made system and perfect timing and also trust, that kind of combination was rare at that time, don't you think?
Actually, in 2017, the service from crypto exchanges was pretty bad. If you try to withdraw Bitcoin and it gets stuck, if you try to ask customer support, you could be waiting for two months without a reply. So Binance improved that. And then, as you said, when Binance moved to Japan, China banned crypto, there was a voluntary compensation plan by Binance. Binance didn't have to do it, but Binance did it. Binance took $6 million of its own money.
At the time, it was about 40% of the entire treasury. And then they used that to compensate users who were at a loss due to the China policies, but not because of Binance exchange. All of those actions actually meant a lot to the users. Binance did a lot to protect the users. That helped it to grow.
But your stay in Tokyo didn't last long. In early 2018, after questioning from Japan's financial regulator, Binance literally left Japan. But I have to mention that just a few months later, I think it was July 2018, Western Japan was hit by devastating floods. You donated $1 million to help us. And that meant so much to us at that time, and as a Japanese person, I just wanted to share how grateful I am and we are.
Thank you for saying that. For me, the two things are completely separate, right? I have many friends in Japan. I lived in Japan for many years. I love the place. There's a personal connection for me with Japan.
There's a business side of it. We couldn't do the crypto exchange business in Japan. But that does not mean that when Japan is hit by a devastating flood—I think 81 people died in that flood. And many of my old friends, colleagues, are there. The two things are very separate. So I'm very proud that Binance donated $1 million. And that's also actually the first time, I believe, any crypto platform was able to donate that much money to a good cause. That's also the beginning of the Binance Charity Foundation.
That actually helped to open up quite a lot of very positive things. I think myself, our team, are very proud to have done that. You've been talking about it now, it makes me feel happy.
Thank you so much. That meant a lot, again. Since we're talking about Japan, I hope you don't mind if I take a small detour. As you know, in Japan, crypto is about to be treated much more like stocks. That's because of a new law, and the tax on crypto gains is set to drop from 55% to about 20%. How do you see this change for us?
Number one, the drop in taxes is very good. And also the fact that now it's treated more like stocks is actually, in my opinion, a very good move. I think 20% tax is quite a reasonable amount for capital gains, just the same way Japan taxes stocks. So I think this is a very positive move. Compared to many other countries, this is a very good situation. I think this will actually bring quite a lot more volume back into Japan.
Over time, crypto does have more use cases than stocks. You can use it to pay for stuff, etc. So hopefully in the future, when crypto's used for payments, I hope that Japan has favorable transaction VAT taxes, etc. But today those use cases are still pretty small. Hopefully when the use cases grow, we can see some adjustments.
But as an investor, how do these changes affect how you look at founders and projects in Japan?
Overall, Japan has always had very clear regulations. The policies are quite clear. Most founders know what they can and cannot do. In the early years, say from 2017 to maybe 2021, in those years there were quite a lot of restrictions. Quite a number of Japanese founders and foreign founders left Japan.
But in the last few years, Japan has opened up again. So I think Japan's attitude towards, number one, adopting crypto in 2017, and later on in 2021, 2022, the opening up of the regulations shows that Japan is very flexible, very adaptive. We now see a lot of crypto businesses, both Japanese-founded and also non-Japanese founders, are moving to Japan. Including Binance, right? Binance got a license back in Japan in 2022. Now they're fully operating, and they partner with SoftBank, PayPay, etc. All of that is going pretty well.
There are still challenges, of course, but some people say that it's been a tough time for startups in Japan. So this could be a bit of a tailwind.
Actually, for startups, raising money using crypto is probably one of the easiest ways to raise money. It's so easy that there's a lot of scammers raising money in crypto, launching tokens and stuff like that, which is not good. But for legitimate startups, raising money in crypto is actually pretty easy. And Japan should leverage that. I've seen many good founders in Japan raising money in crypto before. And I have not seen that many scammers from Japan, to be very frank. Japan has always been a fairly honest society. People generally work pretty hard, and they're pretty honest about it.
Projects can fail, but they're not the scammer type of what we call rug pulls. So I think Japan should encourage more of the founders to use crypto to raise money.
We're talking about policy and stuff. In general, you advise a lot of governments in many different countries, right? Is there any question that almost all of them ask you, or what do you see most of them still missing?
There's actually really just two big buckets. One is regulation of crypto exchanges, mostly centralized exchanges. That's what people are looking at. In the regulation part, people are starting to look at stablecoins. I think Japan has had crypto exchange regulation for a while, but the stablecoin has been pretty restrictive. I think it's just starting. The Japanese stablecoins are just starting. Japanese yen is a pretty large currency globally. But in the crypto world, 99% of the stablecoins are US dollar-backed. In this way, for Japan's benefit, they should push stablecoins more.
Stablecoin is kind of what I put in the second bucket. The larger bucket is tokenization. Every country wants to tokenize their assets. This includes government bonds, financial products, non-financial products, like buildings, rare earth minerals. When you can tokenize these kinds of things, you can sell them before you build them.
For example, talking with a country to tokenize water because they produce a lot of water, and the neighboring countries need their water supply. The neighboring countries can buy a certain amount of tokens first, and then that money can be used to develop the infrastructure to get more clean water. Many of those things can be done with tokenization.
When I'm talking with governments, today those are the two big buckets. Tokenizing traditional financial instruments like stocks. Which country doesn't want their stock to be bought by everybody in the world, right? There's no reason not to. The more people who buy a stock, the better it is for the companies that's listed there. All of these things could actually benefit the local stock exchange and the local companies because there would be more trading volume, there would be more liquidity. And there'll be more investments going into Japan, for example. And this applies to almost every other country as well.
There's a lot of discussions around those areas. I generally just say two big buckets. One is the exchange side, and then one is the tokenization side. Stablecoins kind of be in the middle. Stablecoins is really just tokenizing the local currency.
Japan has taken its first steps, like you said, with JPYC and the big banks preparing their own yen stablecoins right now. But the next step is going to be to build them up. How do we do that?
That's always kind of the Japanese way, right? The Japanese way is to start very carefully, a lot of planning, and start very, very, very cautiously. But once it works, Japanese are very good at multiplying that very quickly. Japanese are generally very good once at the execution phase. It's at the decision phase, the culture is usually much, much more cautious, which is what we have seen, right? The exchange side, we've seen that from 2017 to 2021, 2022.
And then on the stablecoins, I think now Japan's finally starting. Japan had a lot of restrictions on Japanese yen stablecoins before. I think now we're at the turning point. I hope that Japan will do more tokenization of the stock market. The US is doing that already. Many other countries are doing that. And then other assets, hopefully, including ETFs, government bonds, and many other things. I think Japan has a history of starting very carefully, but they're quite fast on execution. I'm pretty confident about Japan's ability to execute.
I can delve in more, but I have to come back to our main topic.
Sure.
Binance kept growing after leaving Japan, but in 2023, your story took a very different turn, I guess. Before we get into that, just a quick recap for our viewers. That time in the US, CZ
Pleaded guilty to one charge. Basically, the issue was that Binance served US users without registering there. And its checks against money laundering weren't strong enough. So, CZ stepped down as a CEO and in 2024, I guess, he spent four months in prison. But then last year, he was pardoned. And you tell your side of the story in the book, so I'll keep this a little shorter. But how do you look back on all of it now?
Yeah, I think you explained it pretty accurately. From the early days, Binance had US users on its platform, between 2017 and 2019 timeframe. And then Binance did not register as a US financial services company. So, that's the violation of the Bank Secrecy Act in the US. The US government kind of chased us in 2022, 2023 timeframe. That's a fact. So, I admitted to that and I pleaded guilty. I flew to the US voluntarily from UAE, which is a non-extradition country.
Yeah, you could have stayed there.
I could have stayed there, but I didn't want to live my life as a fugitive. I don't want to hide from problems. I want to solve problems head-on. So, I flew there and we negotiated quite a bit and dealt with that situation. It's not a pleasant experience. It's definitely a lesson learned. I wouldn't want to repeat it at all. It's a chapter of my life that's past.
I want to say very clearly, though, it's a violation of the Bank Secrecy Act. There's no fraud. There's no victims. From that perspective, it's a financial registration crime. I'm just very happy that we were always able to protect our users. From that point, I moved on and Binance is run by my other co-founders and there's a senior executive team there. They're doing quite well. And I'm actually more free to do other things, which in some sense is actually quite good.
It'd be quite hard for me to step down voluntarily. People would say, "Hey, CZ ran out of stamina. He's no longer interested, etc." I was actually forced to step down. And now looking back, I'm not very young, but I'm not super old. I'm 49. So, I still have a lot of energy, a lot of time, and a lot of resources to do things. And now I have the sort of spare time and capacity to do them. So, I'm actually in a fairly fortunate position to be able to choose what I do. And I have a lot of resources. That was an unpleasant experience, but I think I dealt with that. We've flipped the chapter and are looking to do more positive things in the world.
I have a lot of questions, but first, what's the hardest part of prison, physical or mental?
No one in US history, even till now, has ever gone to prison for a single violation of the Bank Secrecy Act, which is my case. Even more recently, Bank of America was fined $1.2 billion, and their offenses were actually more serious than mine. No one was even charged. No one was even mentioned. But for me, it's water under the bridge. The world is never fair. If you want to compare fairness, it's just not going to be. No two situations are exactly the same.
So, we were in crypto. We were not registered as a financial services company. I'm a Chinese-looking dude running one of the largest platforms handling a lot of money internationally, etc. A lot of situations are different, unique in each case. So, I don't look back. But I think looking forward, there's a lot more things we can do. There's a lot more positive things we can do. So, I don't focus too much on the past. What happened has happened. I think everything happens for a reason, and we try to learn, we try to take the best out of those experiences and improve our future lives.
After you came out, a new chapter began. Like you said, stepping away from Binance and building a global education platform for children and backing founders. And with Binance, you opened up access to finance, right? With Giggle Academy, which is the global education platform you're building, you're opening up access to education, I believe. So, is access the common thread in your life's work?
I would say yes, absolutely. I think having access to financial systems, having access to education will give people more opportunities. We should be fair on equal opportunities. We cannot make sure everyone have exactly the same amount of money all the time. But we want to give everyone equal opportunities to be able to make money, to be able to learn, and to be able to manage their own finances. And then whoever works harder will do better, hopefully, in a fair world.
So, after stepping down from Binance, I thought about what are the things I can do that can have the maximum positive impact. Because I have a lot of choices. I can pretty much do anything I want in life. So, I thought the highest positive impact is an education platform that I can do. So, I built a team. I also thought there's a lot of problems with education today. First of all, there's about 700 million adults who are not in school, who are illiterate. And two-thirds of them are women and they're mostly in Southeast Asia, Africa, etc. On top of that, there's about 500 million kids who are not in school. They just don't have access to school or school's too expensive, etc. So that's one big problem. That's the first one I wanted to solve.
And then of the kids who go to school, the school system's actually not very good today. The schools want to teach your kids to become average. If you're good in Japanese and really bad at math, they tell you, "No, don't study too much Japanese anymore, study more math." So you become average.
A lot in Japan, I believe.
Yeah. So in the future world, we're competing globally. You're in a global workforce and you want to be really good at what you do. You don't want to be average. Also, the teachers don't get paid a lot. We don't pay our teachers enough. There are some really good teachers, but on average, the really smart people don't become teachers. They do other things. There's only a few really smart people who are very passionate about teaching, they're still teaching. And they're just because they're passionate. But on average, the quality of teachers is low. All of those problems, our education system today is actually not great.
So now with AI, with the gaming technology, with mobile access, we can provide education to everyone through the app. We've been working on it for two years. I wanted to start at grade one English, but at six years old, kids already are at different levels. So we said we're going to go earlier. Humans start learning around one and a half, two, or maybe even earlier, but from two years old they can start to pronounce words properly, etc. So now Giggle Academy starts teaching at two years old. We got content up to about six years old right now. It's very sticky. In the last two years we've grown from zero to two million kids learning on the platform now.
And the growth is pretty exponential. At the beginning of 2026, beginning of this year, the platform had about 100,000 kids. So now it's two million kids. So it's grown 20x in the last year. It actually shows that there's a huge amount of demand for a free education app. So, I'm really happy to be able to build that. And actually it doesn't cost me that much.
I spend about $5 million on it each year. It's a team of 50 people. And they're just developing the software. So, the cost is pretty fixed every year. But we can teach two million kids. I'm pretty sure soon we'll be teaching 100 million kids, and hopefully billions of kids in the future. So, for me it's a very fun project. Every time I have a meeting with the Giggle team, I feel happy. Every time I see the numbers, I feel—every time I talk to them, I feel happier. I believe that for humans, when we can help others, it makes us feel happy. So, it's a happy project for me.
Really kind of connects to the title of your book, like access education and then freedom to choose, you know?
Yes, yes.
But it's completely free, right? So, how do you keep it going? How is it funded?
It's completely free. There's no in-app purchases. There's no premium feature. There's no way to charge money on the platform. I started funding it myself and then there's quite a lot of community funding it too, through meme coins and other things, which I did not foresee. I think in the future, if I fund it for 20 years, each year it's going to cost me, say, 5, 10, 20 million dollars, I can fund that for 20 years.
After 20 years, I would imagine the kids who benefited from that education, let's say we teach a kid for 18 years, and then they get a good job. And then we can ask them, "Hey, would you be willing to contribute 5, 10% of income back into the platform for maybe one, two, three, five years?" Totally optional. Each person can choose. I think quite a lot of people would donate back. And then if enough people donate back, it does not take a lot of money to maintain a free electronic digital education system. We got to maintain a team. We got to update the content. But teaching one million, two million kids versus teaching two billion kids is pretty much the same cost.
I think the platform is going to cost less than 20 to 50 million dollars a year for a very, very long time. So it probably only takes a few individuals donating back for the platform to be able to sustain itself. I'm committed to support the system for as long as needed until it reaches sustainability.
There's many other ways to actually have income as well. Many companies would be happy to—endowment funds, education funds. So I have not started talking to them yet. Many people have expressed interest. I think right now we're at the stage where we have two million kids and we're growing pretty quickly. We want to talk to many of the sponsors, like cell phone, mostly device sponsors. I can talk with Starlink, internet service providers, device providers. And so that's the bottleneck now because I'm not a hardware guy. I'm a software guy. So I can provide all the software, but I need the hardware support.
Later on, I think the alumni of the platform will be able to support the platform forever. And also the cost is coming down. Now with AI, the cost of maintaining the platform is coming down dramatically. I think it's fully sustainable.
That's fascinating when you think about that great circle that you're imagining right now. But now I'd like to ask you about the future as well. As an investor, you're backing founders in Web3, AI, and biotech. But I'd love to hear your view especially on AI. So how do you see AI and crypto develop together? What are you watching now?
Let's step back a little bit. I think there's three big technologies in my adult life, right? There's the internet, there's blockchain, and there's AI. Each one is about 15 years apart, right? So, over the last 30 years, there's internet, blockchain, and AI. I think AI is going to be a very, very big field, and AI touches so many different things. It can increase productivity for so many different areas. So, I think we're just starting to understand the potential impacts of it. This is a huge area. So, I'm investing pretty heavily into the AI space.
At the same time, I think AI needs internet. AI needs money. Soon, each of us should have hundreds or thousands or millions of agents working for us in the background, right? So, after we do this interview, you may have an agent to cut the video. You may have an agent to publish it. You may have an agent to market it, to collect money for viewers. There will be many, many agents doing transactions for us. And those transactions will be using digital money. AI agents will not use credit cards. They will not use bank accounts. They can use our bank accounts on behalf of us, but it's not ideal. The ideal way is for them to use a digital native currency, which is crypto.
So, I think in the future, AI still needs money. The world still needs money. So, I think AI is going to actually increase the velocity of transactions by probably a thousand to a million times. And the transactions may become smaller. If a person views one video, they can pay one yen, right? And then they don't have to buy a subscription for 20,000 yen. They can just pay per view, whichever way is cheaper for them. If they view a lot, they'll buy a subscription. If they only view once, they'll pay per view.
So, I think AI is going to do a lot of what we call microtransactions, and it's going to be everywhere. So I think a lot of that will happen. And that's just on the payment. AI also needs digital certification and verification. All of that should be done by the blockchain. Governments in the future should be all digital. So Japan is advanced in some areas but old school in some areas. So all of this will happen on the blockchain and AI can assist it, right?
So AI can verify if everything's digitized. When you buy a house you can track the history of that transaction of that house. You can track history of the neighboring houses. Then you have much more information. So all of those things will happen, and AI plus blockchain will make our society so much more efficient and so much more high transaction volume, which basically means more economic volume.
In how many years do you think it's coming? Five, ten?
I think it's going to be less than ten years. I think it's going to be more like around five years or less because now AI's moving quite exponentially. I think the technology is moving exponentially. So it's not the technology we're worried about. It's the human adoption of it. It's governments legalizing it. It's governments allowing this to be used, and this takes a generation because the people who are in power now, generally our society is run by elders. The human brain takes about five to ten years to adopt a new concept.
Right. Yeah, I'm kind of falling behind right now. So do you think that the Japanese companies are ready for that future? What should Japanese companies be doing now to get ready?
I think Japanese companies are definitely ready. Japanese companies, contrary to what Westerners may think, there may be a mentality like the Japanese are stubborn, slow, rigid, etc., which is not true. Japanese are very early adopters of new technologies. Japanese are very good at preserving tradition in some areas, but on the opposite extreme they're also very good at adopting new technologies. The digital gadgets. Software Japan is a little bit weaker on compared to US, for example. US, I think, is stronger on software. But Japan is always quite open to new technologies. So I think Japanese companies can adopt pretty quickly. So I think that's going to happen. Yeah.
That's great to hear coming from a person who knows a lot of countries. But we're almost running out of time. We started today in Tokyo, so I'd like to end there as well. If you could sit down with a young programmer in Tokyo or with young people in Japan today, what would you tell them now?
Today is the best day. It's a much better day to build startups than any day in history before. In the future there may be better days, but today is the best day compared to any day we had in history. I think the bigger sectors are very clear: AI, blockchain, internet, the web. So if you choose any of these areas you just need to identify
Something that people need and that you can build. If you can do that, then the chance of you making a lot of money and making a huge success is actually quite good. You just got to sit down and build it.
So I would say to all the young people, learn about the new technologies as quickly as possible. Figure out what you can do, what you like to do, and what has value to other people, and then just start building it.
I think in the future, the world is much more geared towards entrepreneurs. Japan used to have the mentality where you work for life in a company, what they call the salaryman. Unfortunately, I do not recommend that path. I recommend more and more people to become entrepreneurs.
This might be a bit controversial in Japan, I understand that, but I do highly recommend people to look at the more entrepreneurial path, which I think is a path for a very large amount of uncertainty, a lot of pain, but also a lot of reward, a lot of positive impact, and a lot of financial reward.
AI is making it easier for us.
Yes.
Yeah, that's a message many of us will take to heart. Thank you so much. So, CZ.
Yes.
Thank you so much for sharing your story so openly with us today, and it was a real pleasure talking with you. And next time you're in Japan, we'd love to have you at our studio in person, all right?
Sure, sure. Thank you for having me today, and I definitely will let you know when I'm in Japan next.
Thank you. Great, great, great. So, to our viewers, thank you for watching, and see you next time.
Thank you. Thank you so much. Yeah.
Hey.
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