CZ Calls Hyperliquid ‘Awesome,’ Then Warns It Needs Good Lawyers

Binance founder Changpeng Zhao called Hyperliquid’s model “awesome” on the Galaxy Brains podcast this week. Then he added the words that only someone who has served prison time for compliance failures can deliver with real weight.

CZ told listeners that Binance cannot compete in Hyperliquid’s niche, then said, “They don’t have KYC. They claim they’re decentralized… I would never do what they do, given what I’ve experienced… I assume they have good lawyers.”

How Hyperliquid Keeps Widening the Gap

HYPE, Hyperliquid’s native token, hit a record $76.70 on June 16, up over 10% on the day. Spot HYPE ETFs have pulled in around $172 million in their first month of trading, and analyst targets range from $83 to $98, with a longer-term $300 case gaining ground.

When SpaceX priced the largest IPO in Wall Street history, Bybit, Binance, and Bitget all canceled their tokenized SpaceX products, unable to source enough real shares.

Hyperliquid had already built functioning pre-IPO price discovery using synthetic perpetual futures (derivatives that track price without requiring the actual stock), then cleared $1.4 billion in SPCX volume on IPO day, without holding a single real share.

CZ’s own exchange was among those that had to cancel.

The KYC Warning From Someone Who Knows

CZ pleaded guilty to anti-money laundering violations in November 2023 and served four months in a US federal prison. When he says a crypto platform needs good lawyers, he is not making small talk.

Know Your Customer rules require platforms to verify user identities. They form the backbone of global anti-money laundering frameworks. Hyperliquid operates without them, positioning itself as a decentralized protocol rather than a regulated financial service.

But CZ’s comment, made on the Galaxy Brains podcast, comes from direct experience. His 2023 plea deal with the US Department of Justice acknowledged that Binance processed transactions for users in sanctioned jurisdictions. It also confirmed Binance failed to run adequate KYC controls.

The competitive history between CZ and Hyperliquid makes the comment sharper still: Binance has not listed HYPE, and CZ has backed a rival DEX.

CZ’s actions have caused major moves in the crypto space before. His November 2022 tweet announcing Binance would sell its FTT holdings triggered the bank run that collapsed FTX. FTX itself filed legal claims stating CZ triggered the collapse with a “malicious” FTT sell-off.

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