Changpeng Zhao
Changpeng Zhao (Chinese: 赵长鹏; pinyin: Zhào Chángpéng), commonly known as CZ, is a Chinese-born Canadian businessman. Zhao is the co-founder and former CEO of Binance, the world's largest cryptocurrency exchange by trading volume as of November 2023.[2] He resigned as the CEO in November 2023 after pleading guilty to a money laundering charge in the United States
According to Bloomberg Billionaires Index, Zhao was ranked the 69th-richest person in the world, and richest Canadian overall, with a net worth estimated at $23 billion as of November 2023
Early life and education
Zhao was born in Lianyungang in China's Jiangsu province.[1] In the late 1980s, when he was 12 years old, he immigrated with his family to Canada, settling down in Vancouver, British Columbia. His parents were both schoolteachers in China.[6] His father worked as a university instructor before he was branded a "pro-bourgeois intellect" and exiled to rural areas shortly after Zhao's birth.[7] During his teenage years in Canada, Zhao helped to support his family by holding down a number of service jobs, including working as a fast-food clerk at a McDonald's restaurant and a gas station.[8][9]
Zhao attended McGill University in Montreal, Quebec, where he majored in computer science
Early career
After graduating from McGill, Zhao was selected for an internship in Tokyo working for a subcontractor of the Tokyo Stock Exchange, developing software for matching trade orders. He later went to work full-time for four years at Bloomberg Tradebook where he was a developer of futures trading software.
Business career
In 2005, Zhao moved to Shanghai to launch his business career, where he established his first technology startup company called Fusion Systems,[10] which was known for "some of the fastest automated high-frequency trading platforms and systems for stockbrokers."[8] Zhao first heard of Bitcoin in 2013 when playing poker with Bobby Lee (brother of Charlie Lee) who would later go on to found BTCC. Lee advised Zhao to put 10% of his money into bitcoin. Zhao instead "went all in" and sold his apartment in Shanghai and invested all of his wealth in Bitcoin, much to his family's dismay.[9]
In 2013, Zhao was a member of the team that developed Blockchain.info and he also served as Chief Technology Officer of OKCoin.[8]
In 2022, Zhao invested $500 million through Binance to finance the acquisition of Twitter by Elon Musk
Binance
After its launch in July 2017, the Binance cryptocurrency exchange was able to raise $15 million in an initial coin offering, and trading began on the exchange eleven days later.[12] In less than eight months, Zhao grew Binance into the world's largest cryptocurrency exchange by trading volume (as of April 2018).[13][12] Zhao also launched Binance Coin in 2017; this is a utility token that gives its owners various benefits, such as discounts on trading fees.[14] In April 2019, Binance launched Binance Smart Chain, which has smart contract functionality and is an Ethereum competitor.
In February 2018, Forbes placed him third on their list of "The Richest People In Cryptocurrency," with an estimated net worth of $1.1-2 billion.[13][15]
In 2019, Zhao launched Binance's U.S. affiliate, Binance.US.[16] Binance withdrew its application to run a Singapore-based crypto exchange in 2021
Legal troubles
Civil lawsuits
On 27 March 2023, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and Zhao in the United States District Court for the Northern District of Illinois, claiming willful evasion of US law and allegedly breaching derivatives rules.[18][19] The agency accused Binance of breaking rules intended to thwart money laundering operations,[20] pointing to internal communications describing transactions by Palestinian militant organization Hamas, and suspected criminals.[18]
In June 2023, the U.S. Securities and Exchange Commission (SEC) sued Zhao and Binance on 13 charges for alleged violations of US securities rules.[21][22][23]
Criminal conviction
In November 2023, Zhao agreed to resign from Binance and pay a $50 million fine as part of a guilty plea to U.S. federal charges. Binance also agreed to plead guilty, and to pay $4.3 billion in fines.[3][24] Zhao was replaced as CEO by Richard Teng.[25]
Zhao pled guilty to violating the American Bank Secrecy Act by prioritizing Binance's growth over compliance with FinCEN anti-money laundering requirements.[26] Although Zhao only personally pled guilty to a single criminal charge, as part of plea bargain negotiations, Zhao agreed for Binance to also admit to operating an unlicensed money transmitting business and to violating the International Emergency Economic Powers Act
Personal life
Of Chinese descent, Zhao is a Canadian and UAE citizen.[27][28] Born in China in 1977, Zhao acquired a Canadian visa in 1989 and left China that same year after the events of Tiananmen Square.[29] In 2022, Zhao said that he had acquired Canadian citizenship some 30 years before, around 1992.[30] In 2005, he moved back to China,[27] eventually owning an apartment in Shanghai.[31] In 2015, he sold his Shanghai apartment and used the funds to purchase Bitcoin.[32] Zhao stayed in China until the Chinese government banned crypto exchanges in late 2017.[29] He is currently based in Dubai, United Arab Emirates.[17]
Zhao has said he plans to donate up to 99% of his wealth, following the philanthropic examples of other global business magnates and investors such as Bill Gates and Warren Buffett. "I intend to donate most of my wealth, as many other entrepreneurs or founders have done, from Peabody to today. I intend to donate 90%, 95%, or 99% of my wealth."[33]
According to a Reuters investigative story about Binance, Zhao had a romantic relationship with former Chinese travel television show host and Binance co-founder Yi He for "several years."[34] They have two children,[1] including a son born in the United States.[35] Reuters reported that Zhao has a total of 3 children
Political views
With regards to his political beliefs, Zhao stated in 2021 in Singapore: "I am not a complete libertarian, I'm not an anarchist... I don't believe human civilization is advanced enough to live in a world with no rules.
Views on cryptocurrency
In an interview with The New York Times, Zhao said people are getting into crypto as they see it grow, "trade it and make money off it as opposed to using it," but that the market will always self-correct.[36] On April 6, 2021, Zhao told Bloomberg Markets that nearly 100% of his liquid net worth was in the form of cryptocurrency
Binance
2013–2017: company beginnings and move out of China
CEO Changpeng Zhao founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers. In 2013, he joined Blockchain.info as the third member of the cryptocurrency wallet's team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.[10] He was hired at this position in 2014 by Yi He, with whom he co-founded Binance several years later.[4]
The company was founded in 2017 in China but moved its servers and headquarters out of the country in advance of the Chinese government's ban on cryptocurrency trading in September 2017.[11] Zhao asked He to join Binance, and she helped rewrite parts of the white paper for Binance's $15 million initial coin offering.
time.[23] Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks."[24] Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)".[25][26] Withdrawals resumed by 19 May.[27][better source needed]
In June 2019 the company announced it would prohibit US passport holders as well as anyone residing in the US, and would set up a new entity binance.us to support those customers.[28] Later in 2023 Forbes leaked a document allegedly from Binance titled "TaiChi" that proposed this regulatory solution to reduce US regulatory risk.[29] Binance subsequently denied the document, sued Forbes for defamation, and subsequently dropped the lawsuit.[30]
In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts.[31] In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed.
2018–2019: launch of stablecoin and security breach
In January 2018 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion,[12] a title it had retained as late as April 2021, despite competition from Coinbase, among others.[13]
In March 2018, Binance announced its intentions to open an office in Malta after stricter regulations in Japan and China.[14] In April 2018, Binance signed a memorandum of understanding with the government of Bermuda.[15] Months later, a similar memorandum was signed with the Malta Stock Exchange to develop a platform for trading security tokens.[16] In 2019, the company announced Binance Jersey, an independent entity from its parent Binance.com exchange, with the aim to expand its European influence. Jersey-based exchange offers fiat-to-cryptocurrency pairs, including the Euro and the British pound.[17]
In April 2018, Binance launched the Binance Charity Foundation. The charity's goal is to support the advancement of blockchain-enabled philanthropy with a focus on third-world countries
In August 2018, Binance along with three other big exchanges raised $32 million for a "stablecoin" project. The idea of stablecoins is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital assets.[21]
In January 2019, Binance announced that it had partnered with Israel-based payment processor Simplex to enable cryptocurrency purchases with debit and credit cards, including Visa and Mastercard. The purchases are subject to Simplex's local bank policies and are limited to Bitcoin, Ethereum, Litecoin and Ripple's XRP.[22]
On 7 May 2019, Binance revealed that it had been the victim of a "large scale security breach" in which hackers had stolen 7,000 Bitcoin worth around $40 million at the time.[23] Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks."[24] Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)".[25][26] Withdrawals resumed by 19 May.[27][better source needed]
In June 2019 the company announced it would prohibit US passport holders as well as anyone residing in the US, and would set up a new entity binance.us to support those customers.[28] Later in 2023 Forbes leaked a document allegedly from Binance titled "TaiChi" that proposed this regulatory solution to reduce US regulatory risk.[29] Binance subsequently denied the document, sued Forbes for defamation, and subsequently dropped the lawsuit.[30]
In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts.[31] In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed
not their policy, and also pointed to their donation of $10 million for humanitarian needs in Ukraine.[44]
In April 2022, Reuters reported that, in 2021, Binance shared information with Rosfinmonitoring about funds raised by late Russian opposition leader Alexei Navalny's network.[45][46]
However, in March 2023, the exchange banned Russian residents from buying euros and dollars through its p2p service. European users, in turn, lost the opportunity to buy rubles.[47]
In September 2023, Binance announced it was leaving Russia and selling its business to the CommEX platform. Accounts of Russian users will be transferred to the new platform within a year.[48]
On 27 May 2022, Binance announced the registration of its legal entity in Italy, and has plans of opening offices and expanding the local team in the area. CEO Changpeng Zhao also shared information regarding Binance's registration with France's market regulator. At the time, the company was also seeking registration in more European countries, such as Switzerland, Sweden, Spain, Netherlands, Portugal and Austria.[49] Binance registered to operate in Spain in July 2022,[50] and in Sweden in January 2023
