The crossroads of a 300 million user exchange: What is the real crisis Binance is facing

The Beginning of Structural Reorganization: The End of the Era of a Single Person

In November 2023, Binance reached the largest corporate settlement in history with a $43 billion fine. This event was not just a financial loss; it was a signal that completely reshaped the power landscape of the industry’s largest exchange.

The “one person makes all decisions” structure of Zhao Changpeng(CZ) is now a thing of the past. With a co-CEO system, a board of seven members, and a compliance team exceeding a thousand personnel, Binance, once symbolized by reckless expansion, is now entering the framework of modern corporate governance.

In summer 2024, Binance held its first board meeting. Seven directors sat around a table in a conference room at the Abu Dhabi Global Market. Three of them were independent directors, tasked with oversight separate from management. Gabriel Abed, elected chairman, served as a “neutral mediator” with no ties to US regulators or CZ’s camp.

Power Shift, But Not Complete

In December 2025, a new chapter began with Hei’s appointment as co-CEO. This woman, who co-founded Binance with CZ in 2017, transformed from an “invisible second-in-command” into an official center of power.

But a crucial question arises: has power truly been decentralized?

The board, established under regulatory requirements, outwardly shows a dispersal of authority. However, the actual decision-making process is more complex. The authority over token listings is no longer concentrated in a single responsible person but distributed among product managers and trading operations leaders. While this reduces efficiency, it also acts as a safeguard against individual influence.

More interesting is CZ’s changing position. Officially, he has stepped back from management. Yet he remains the largest shareholder and continues as co-founder of YZi Labs, the investment arm. Managing assets worth over $10 billion related to cryptocurrencies, CZ’s influence persists. It is said that his unofficial opinions posted on X directly impact investment decisions.

The Role Shift in Compliance

In the past, Binance’s compliance team was seen as a “hindrance.” Amid rapid growth and user expansion, warnings from compliance were often ignored.

In January 2023, Noah Perlman joined as Chief Compliance Officer(CCO). Having handled financial regulation compliance at Morgan Stanley and other exchanges, he led the rapid expansion of Binance’s compliance team. Currently, the internal compliance team has grown to 650 members, exceeding 1,000 when including external contractors. Annual expenses surpass $200 million.

Now, compliance is no longer just a support function. No business can proceed without regulatory approval. Perlman has become a key participant in strategic decision-making.

This shift is also evident in numbers. In 2021, 80 new projects were listed; in 2022, that number dropped to 19. After regulatory lawsuits and fines, only 10 projects were listed over eight months. The compliance department’s veto power has become stronger than ever.

Deeper Issues: Culture and Trust

System improvements can be swift, but cultural change takes time.

The technical outage on October 11, 2025, symbolized this. During a sharp decline in Bitcoin, Binance’s system went down. Many users couldn’t log in or close positions. Over 1.6 million accounts were liquidated, and Binance paid out over $280 million in compensation.

Problems in the listing process also recur. Incidents of employees trading using insider information have been exposed. Multiple leaks of listing information have occurred. This indicates that even with a mature system, the execution culture is still transitioning.

The behavioral patterns formed during the lawless era—informal flow of information, influence of personal relationships, prioritization of “getting things done”—do not disappear with a few notices or punishments.

Talent Crisis: The True Bottleneck

Hei recently candidly mentioned in an interview that talent is the biggest challenge for Binance. “The biggest challenge now is talent density.”

Salary is not the issue. Given Binance’s scale and profits, it can offer industry-leading compensation.

The real problem is trust. Repeated incidents of listing corruption, information leaks, and technical failures have raised doubts: “Is cooperating with Binance safe?” Top engineers and successful founders care as much about “contract guarantees” and “respect after integration” as they do about cashing out.

Frequent rejections of Binance’s acquisition proposals reflect this shift. Previously, being acquired by Binance was seen as a good outcome; now, it’s different. Uncertainties about who leads rule interpretation, payment rhythms, and contractual complexities have accumulated industry-wide consensus.

The Evolution of Listing Power: From Inches to System

Initially, Binance’s listing decisions were highly centralized. Some projects gained quick listings through “fast tracks.” There were no boards or lengthy approval processes.

But as internal oversight and regulatory pressure increased, the situation changed. Now, major listing decisions require signatures from multiple responsible parties. This design aims to weaken individual influence.

In December 2025, Binance issued a strongly worded announcement. It unveiled a comprehensive listing framework, banned intermediary involvement, and set a reporting reward of over $5 million. It also published a blacklist.

This move marks a milestone in institutionalization but also proves that past issues persist. The emphasis on “use only official channels” indicates that the previous “distributed checks” failed to fully prevent gaps in personal governance.

Imperfect Transition: The Gap Between System and Reality

What Binance faces is not a single problem but a series of systemic challenges.

Let’s look at Hei’s three core principles: first, building good products; second, providing good service to users and staff; third, communicating with regulators.

Though simple to state, execution is difficult—especially in a context of 300 million users, global distribution, intense regulatory pressure, and the founder’s departure.

How to maintain innovation within the compliance framework? How to restore trust during institutionalization? How to attract people who “believe in this business” in the talent competition?

The era of savage growth is over. The real challenge has just begun.