Binance founder Changpeng Zhao (CZ) has given his first public assessment of the rapidly rising decentralized perpetual exchange Hyperliquid during a Galaxy Brains podcast interview. While he praised the invention as 'awesome,' he quickly turned cautious, warning that the no-KYC model is too dangerous, and he 'would never do what they do' based on his own painful experience.
CZ: Hyperliquid Captures a Niche Binance Can't Touch
Galaxy Research head Alex Thorn released a 38-second clip on X on July 24. In it, CZ says: 'I think the invention of Hyperliquid is actually awesome. They have a niche that Binance cannot compete on, because they don't have KYC and they call themselves decentralized.' Hyperliquid, currently a top decentralized derivatives exchange by volume, appeals to traders and capital that avoid centralized exchange (CEX) compliance regimes.
Veteran's Warning: No KYC Comes with Giant Legal Risk
But the 'no-KYC' feature struck a nerve with CZ, who recently finished serving his sentence and paid billions in penalties to the U.S. Department of Justice. He added with a laugh: 'Based on everything I've been through, I would never do what they are doing... I suspect they have a very good team of lawyers.' He noted such decentralized projects must 'handle it themselves' regarding regulatory compliance.
The clip sparked discussion on social media, with some users noting the irony that Binance's own BNB Chain is also a decentralized network. Alex Thorn said the full CZ interview will be released Thursday, expected to cover broader crypto market outlook and compliance topics.