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Binance CEO on backing Elon Musk's Twitter buy: 'We want to support free speech'

Binance CEO Changpeng Zhao (CZ) joins Yahoo Finance Live to discuss why he's betting on Elon Musk's Twitter takeover, how the Tesla CEO can approach content moderation, innovating new features for the platform, and whether he would want to be a Twitter board member.

Video Transcript

BRIAN SOZZI: Cryptocurrency exchange Binance helping to fund Elon Musk's deal for Twitter to the tune of $500 million. Binance says it hopes to help Twitter by better incorporating crypto into the platform. Here to talk about that prospect Changpeng Zhao, founder and CEO of Binance, and our very own crypto reporter David Hollerith. CZ, always good to see you. Thanks for giving us some time here.

Is this more of a bet on Elon Musk or more of a bet on the future of Twitter's platform?

CHANGPENG ZHAO: I think, to be honest-- to be honest, it's a bit of both. I think, first of all, we want to support free speech, and this is one of the best choices-- the best chances to do that. Elon Musk is a very strong entrepreneur. We want to support him too.

And crypto-- Twitter is a town square for crypto and most of the world's hot topics, so it's a good place to support free speech.

DAVID HOLLERITH: And, CZ, you know, Elon Musk has sort of gone back and forth, at least from what we've seen in court documents that showed his text messages-- he was initially talking about doing sort of a blockchain Twitter to improve some of the problems he's laid out for the company. And then he also has said that maybe that's not possible, maybe it just won't work.

And I'm curious, at this juncture, what you're thinking about a crypto implementation for Twitter might look like and how realistic do you think it is.

CHANGPENG ZHAO: I think Twitter today is a centralized platform, so moving that in one giant step into a fully decentralized platform is going to be quite difficult. I think we've got to get there in incremental steps. And for any entrepreneur or any company in today's environment, we've got to make many adjustments as time goes on, so it's very natural for his thought process to change over time.

But overall, Elon is a very strong entrepreneur and we want to support him.

BRAD SMITH: CZ, Elon has been making some strategic moves with regard to who he's placing within Twitter, who he's bringing over from Tesla into the new Twitter that he sees moving forward. He's even said previously that the Twitter board that he decides to put together won't be paid if he was successful in acquiring the company. Post acquisition and knowing how much you believe that Twitter could improve with some of the same technology that Binance already has perhaps and the same ethos as well, is this a position that you would want on Twitter's board?

CHANGPENG ZHAO: I'm not against it, but I'm also not actively pursuing it. I'm not very good sitting on boards. I don't enjoy those type of, like, long meetings, et cetera. But if my help is needed, I'm happy to, but I'm pretty busy running Binance.

We want to give all the support we can, but we'll see what Elon decides.

JULIE HYMAN: Speaking of sticking to your knitting and running Binance, I mean, we see, obviously, Elon Musk, who is running a couple other companies-- now he's sort of doing Twitter-- and the initial reports coming out, frankly, have the feel of throwing spaghetti against the wall, as we say. In other words, maybe we'll charge people for the check marks, maybe we'll take away free ads from Twitter Blue. Like, there's all this stuff sort of trickling out. It doesn't feel like there is a unified strategy coming from Musk right now at Twitter.

As an investor, what do you-- and as a user-- what do you want to see?

CHANGPENG ZHAO: So I think that's very, very normal. As an investor, as a user, and as also a fellow entrepreneur, I think it's very common to have many different ideas and see what sticks. So it's really, literally, like throwing spaghetti on the wall and just hope something sticks. That's entrepreneurship.

So, many different ideas should be tried and should we try quickly. I think, as a user, my biggest problem with Twitter is over the last year or a couple of years, there hasn't been a lot of new features being introduced. There should new features every month, every week, every day. And we'll just see what sticks. That's very normal.

JULIE HYMAN: Like what, CZ? Like what would be the thing that you would want to see from Twitter in terms of a new feature?

CHANGPENG ZHAO: I actually agree with a lot of what-- Elon's ideas. Edit button. The way-- let's block spam bots. There's a lot of bots that spamming my comment section when I open my tweets for comments. And blue ticks, they should become more-- there should be a cost to it. I actually really support that idea.

So all of this shouldn't really take more than a week to implement each, so we should have done that, like, a year ago. So I'm very supportive of Elon's idea-- let's move quickly, let's try new ideas.

DAVID HOLLERITH: Yeah. And to that point, too, as one of the largest benefactors of cryptocurrency trading volume, thinking of this whole bot situation, there are-- we know from the crypto side of Twitter that there are plenty of accounts that share coins and pump the price and things like that, so I'm curious, given that you're also thinking about the free-speech mentality on Twitter, how do you think that problem is solved now that you have a financial stake?

CHANGPENG ZHAO: I think there's a balance between free speech and also pump and dump, market manipulation, hate speech, or just pure lying or fake information, so there has to be a line to be drawn. It's not an easy problem to solve, to be honest, but I think Elon is in a much better position to solve that problem than the-- what Twitter's doing currently. There's too many spam bots on Twitter today.

BRAD SMITH: And so, with regard to the hate speech, though, do you think that there is a significant policy change that needs to be enacted in order to make sure that that is removed from the platform, that it is not just a place for free speech but also a place where free speech is not convoluted with hate speech on the platform?

CHANGPENG ZHAO: I think that's a very fine line to draw. It's going to be tricky. I think between hate speech and free speech, there's a very fine line. But some of the other stuff are much more clear-- fake news, spam, scam-- much easier, yeah.

BRIAN SOZZI: CZ, one part of making a good return on an investment like this is Elon running an effective business whether it's sales or profits. Do you support him laying off 75% of that Twitter workforce to get those profits?

CHANGPENG ZHAO: I think-- those are the two different things. I think laying off a portion of the staff is just to become more efficient. Twitter today doesn't have a very strong business model, but it could potentially have very strong business models. So I think those two things are separate.

It's not to say-- I think revenue's not by saving costs. Revenue doesn't come from saving cost. I think Twitter's ability to generate revenue far exceeds its cost center today. There's many new revenue models that can be implemented on Twitter, like charging for blue ticks, even charging for a comment, issuing NFTs for each tweet, issuing a token in the future. So all of those things can generate revenue for Twitter, and it's not limited by the cost savings.

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