From TradFi to Web3: Joe Zhou's Journey with Beosin

From TradFi to Web3: Joe Zhou's Journey with Beosin

Joe Zhou, the CEO of Beosin, brings a wealth of experience from the seemingly disparate worlds of traditional finance (TradFi), regulation, and now, the cutting edge of Web3 security. His journey offers a unique perspective on the evolution of finance and the critical need for trust and transparency in the burgeoning blockchain ecosystem. This article dives into Joe's career path, the mission of Beosin, and insights shared during his appearance on the Alpha Un# podcast.

Sri Misra, Founder of aarna protocol recently had the chance to sit down with Joe for an in-depth conversation on the alpha un# podcast. Hear directly from Joe about his transition, the intricacies of blockchain security, and the future of Web3 compliance by tuning into the full podcast episode at unhashed.co/joe

A Career Forged in Finance and Regulation

Joe Zhou embarked on his financial career in 2004, navigating the complex landscape of equity derivatives and structured products at major institutions like Société Générale, Lehman Brothers, Merrill Lynch, and BBVA, with a focus on the Greater China region. The 2008 global financial crisis served as a pivotal moment, highlighting the systemic risks and lack of transparency inherent in complex financial instruments.

"I was basically very disappointed in the industry. And somehow I also realized that the financial model that I used to price wasn't quite there yet. It was just in theory works. But in practice, when everything put together, it never works." 

This experience fueled a desire to foster greater transparency and protect investors, leading Joe to transition into a regulatory role. From 2012 to 2014, he served as a Senior Manager at the Securities and Futures Commission (SFC) in Hong Kong, contributing to initiatives aimed at establishing the city as a global asset management hub and working closely with mainland Chinese authorities like the CSRC and SAFE on cross-border financial policies.

His journey continued at CSOP Asset Management, where he focused on launching innovative ETF products, and later at Hong Kong Exchanges and Clearing Limited (HKEX) as Senior Vice President, promoting key initiatives like Stock Connect and Bond Connect.

Embracing the Web3 Revolution: The Path to Beosin

In recent years, Joe shifted his focus to the dynamic world of blockchain and digital assets, holding leadership roles at prominent crypto firms like OSL Group, HashKey Group, and OKX. This transition wasn't without its learning curve:

"I make a decision to get into Web3 in 2021 after I took part in some projects without really knowing it. And I lost some money. I paid my tuition fee as well."

Despite initial challenges, Joe recognized the transformative potential of blockchain technology:

"I also think Web3, the blockchain industry is kind of like the gift from God to our generation... It would change how we or how we trade, how we do a settlement clearing." 

This conviction led him to Beosin, where he became CEO in October 2024. Founded in 2018, Beosin stands as a world-leading blockchain security and compliance solutions company, leveraging formal verification and on-chain data intelligence.

Beosin: Securing the Blockchain Frontier

Beosin's mission is to empower businesses, authorities, and regulators by providing tools for a transparent and secure blockchain experience. The company addresses the critical need for security and compliance in a space often perceived as the "wild west".

Key Services and Achievements:

• Smart Contract Security Audits: Identifying vulnerabilities in the code that underpins DeFi protocols, NFTs, and other dApps. Beosin has uncovered over 45,000 security vulnerabilities since its inception.

• Know-Your-Transaction (KYT) & AML Solutions: Analyzing blockchain transactions to help Virtual Asset Service Providers (VASPs) comply with Anti-Money Laundering regulations, moving beyond traditional KYC. Beosin has accumulated labels for over 2 billion wallet addresses, enhancing on-chain transparency.

• On-Chain Stolen Digital Asset Tracking: Providing tools and expertise to trace and potentially assist in the recovery of stolen crypto assets, often working with law enforcement.

• VASP Compliance Audits & Exchange Security: Ensuring digital asset exchanges and service providers meet regulatory security standards.

• Stablecoin Monitoring Solutions: Offering real-time monitoring to maintain the integrity of stablecoin systems.

Navigating Security Challenges in Web3

Joe highlights that security breaches often stem from fundamental issues:

1. Private Key Management: A significant percentage of security incidents involve compromised private keys, often due to simple mistakes like storing them insecurely on devices or cloud drives. The safest method remains offline storage.

2. Smart Contract Vulnerabilities: Loopholes or "backdoors" intentionally or unintentionally left in smart contracts can be exploited. More sophisticated attacks hide malicious code within complex contract layers. This underscores the absolute necessity of thorough audits by reputable firms. Users should always verify audit reports directly on the auditor's website.

The Rise of KYT: Transparency in an Anonymous World

While blockchain offers pseudonymity, this feature can be exploited for illicit activities like money laundering or funding scams. Beosin's KYT solution addresses this by building a massive, continuously growing database of tagged wallet addresses (over 2 billion).

"All you need to know is whether you are trading with the legal sources or illicit or whether they are from legal sources or from illicit sources. You have to know. That's why I wanted to do more to this field." 

By scanning transactions in real-time against this database, KYT systems assign risk scores, allowing platforms and users to identify interactions with potentially illicit sources (e.g., sanctioned entities, known scam wallets) without compromising user privacy. This helps maintain the integrity of the ecosystem and provides confidence to users and institutions.

Balancing Decentralization and Regulation

The crypto space faces an ongoing debate about balancing its core decentralized ethos with the need for regulation and oversight. Joe acknowledges this tension:

"It's supposed to be decentralized, but now it's becoming more and more centralized in a way... I think it has to be a balance between decentralized and the centralized. You have to have some sort of centralized features in that." 

He notes that even in tracing illicit funds, interaction with centralized exchanges is often necessary to link wallet addresses to real-world identities via KYC data, a process requiring cooperation with law enforcement. Furthermore, stablecoin issuers like Tether are increasingly monitoring transactions and freezing assets linked to illicit activity, highlighting a move towards greater oversight, sometimes mandated by emerging regulations.

The Future is Compliant

Joe Zhou's journey mirrors the maturation of the crypto industry itself – moving from a nascent, largely unregulated space towards one demanding greater security, transparency, and compliance. As institutional adoption grows and regulatory frameworks evolve, solutions like those offered by Beosin become increasingly vital. Joe's unique blend of TradFi, regulatory, and Web3 expertise positions him and Beosin at the forefront of building a safer and more trustworthy blockchain ecosystem for everyone.