Changpeng Zhao, better known as CZ, is the co-founder of Binance, the cryptocurrency exchange with the largest trading volume globally. Zhao is a multifaceted character who has served as a software engineer, investor, businessman and speaker. Although its history had a humble beginning marked by exile and emigration, currently it is one of the richest men in the worldwith a net worth of 57.8 billion dollars. We tell you more details about this figure in our cryptopedia.
1 Who is Changpeng Zhao and how did he get interested in cryptocurrencies?
CZ was born in 1977 in Lianyungang, a Chinese city located in Jiangsu province. His father, a university professor, was accused of promoting “bourgeois ideals,” so he had to move to rural areas shortly after the birth of his son. When Zhao was just 12 years old, his family decided flee the country and take refuge in Canadashortly after the massacre of the Tiananmen Square.
During his adolescence in Vancouver, CZ had to help his family by doing various service jobs; He was a fast food employee at McDonald’s and also worked at a gas station. Later, he was able to attend McGill University in Montreal, where He majored in Computer Science.
After graduating as a computer technician, Zhao was selected for an internship in Tokyo, Japan, where he had the opportunity to work for a subcontractor of the Tokyo Stock Exchange; there he was in charge of develop a software that had to match trade orders. He then started a full-time job at Bloomberg Tradebook, where he developed software for futures trading.
In 2005, CZ returned to China, after sixteen years in exile. He settled in urban Shanghai to begin his business career. There he founded his first technology company called Fusion Systems, a company that offered high-frequency trading systems for brokers. Later, in 2013 he was part of the team that developed Blockchain.infoa cryptocurrency financial services company. He was also chief technology officer of OKCoin.
Zhao currently resides in Dubai and is married to Yang Weiqing, with whom he had two children. However, he had a parallel romantic relationship with Yi He, who is his business partner and co-founder of Binance. Yi He has also been responsible for social media management and brand management, as well as public relations for the company. With her he had three children.
A risky bet
Changpeng Zhao first heard about Bitcoin technology in 2013, when he was playing poker with Bobby Lee, the brother of Charlie Lee, founder of Litecoin. He advised him to invest at least 10% of his money in Bitcoin, but Zhao took a riskier stance by selling his apartment in Shanghai and investing all his capital in Bitcoin, which generated discontent among his relatives.
2 Creation of Binance and CZ’s success as founder
In July 2017, the Binance project saw its launch. In an initial coin offering (ICO), the exchange was able to raise $15 million and, in less than eight monthsCZ surpassed all its competitors and made Binance the cryptocurrency exchange largest globally by volume of operations. The company was founded in China, but moved its headquarters to Japan in anticipation of the cryptocurrency trading ban which came into force in 2017.
Under CZ’s leadership, Binance became one of the most influential platforms in the world of digital money, contributing to the adoption of cryptocurrencies in an easy and accessible way for thousands of people around the planet.
In addition, the exchange has built an entire ecosystem around it, as it serves more than 180 countries and has Binance Labs, a platform that provides project financing and technical teams from the industry in order to promote the use of blockchain.
Additionally, in 2017, Zhao launched Binance Coin, which is a utility token that offers users various benefits, such as discounts on trading fees. Currently the token is no longer called Binance Coin, as in 2022 it was “renamed” to BNB. This is with the aim that BNB Chain (previously Binance Smart Chain) expands and can become a “multichain” that encompasses others, as is the case with Ethereum.
How does Binance work?
Simply put, Binance works as a marketplace where you can sell, buy and exchange different types of cryptocurrencies. To be able to use it you must create an account and verify your identity, then you can deposit fiat money (dollars, euros…) or cryptocurrencies that you already have in other wallets. On the other hand, if you want to buy cryptocurrencies, the platform shows you the prices in real time and allows you to carry out the transaction easily.
3 How Binance Became the World’s Largest Cryptocurrency Exchange?
Binance has had a notable impact on the crypto industry by several reasons: First, it made cryptocurrency trading more accessible to people of all experience levels; That is, it has worked as a door for users who are not so experienced in the world of digital money. Furthermore, its platform is relatively easy to use. Also important is the wide variety of cryptocurrencies it offers compared to other platforms.
Likewise, the exchange has been a pioneer in the introduction of new services and productslike futures trading. The popularity of Binance has allowed it to expand in such a way that it even created its own cryptocurrency, BNB, which is already among the most valuable on the market. In the beginning, the network was called Binance Smart Chain, but shortly after it changed its name in order to separate both projects: on the one hand, offering the cryptocurrency network and on the other, maintaining the exchange business.
CZ’s opinion on cryptocurrencies
At a conference in Madrid, Zhao mentioned the following about cryptocurrencies: “Four or five years ago cryptocurrencies were not taken seriously. They saw them as too small an industry that could disappear. Now they understand that this is a technological evolution that is not going to disappear. “Cryptocurrencies are here to stay.”
4 Drawbacks and legal background of Binance
Binance’s monumental success also brought with it the beginning of legal problems. In 2021, the authordbritish ades They banned the exchange’s operations in their territory. This is because the FCA (Financial Conduct Authority) had asked all cryptocurrency-related companies to register and demonstrate that they complied with anti-money laundering regulations, something that Binance did not do.
On the other hand, in 2023 it will open the first investigation in the United States for alleged illegal operations through the platform. In March of last year, US regulators attempted to ban Binance on the grounds that the company had carried out illegal operations in the US.
The Commodity Futures Trading Commission (CFTC) lawsuit stated that the company did business without properly registering with the authorities. Binance was also accused of violating several US financial laws, including rules intended to prevent money laundering.
However, at that time both Binance and CZ were willing to defend their practices. The company assured that “significant investments” had been made so that users in the United States were not active on the platform; in fact, a block was created for users identified as US citizens or residents.
Faced with so much pressure, on November 21, 2023 Changpeng Zhao made public his resignation as CEO from Binance via Xstating that he had made mistakes and that it was time to assume the consequences of his decisions. In that same statement he announced that Richard Teng, former global director of regional markets for the company, is now the new CEO of the exchange.
5 Why was CZ in jail?
On April 30, 2024, CZ was sentenced to four months in prison for having allowed Binance to commit various crimes, including violation of the Banking Security Law. According to the charges, the platform allowed operations that violated US sanctions.
This included transactions related to ISIS, Al Quaeda and Iranalong with other groups considered by the United States government as terrorists. Likewise, Binance also did not prevent transactions between persons in sanctioned jurisdictions and US users.
Faced with this accusation, Zhao stated in court that he had “nono excuse” for having money laundering allowed through the platform, despite the fact that Binance has, since 2022, strict controls against money laundering. For these reasons, Changpeng Zhao pleaded guilty. It is worth noting that prosecutors requested a three-year sentence, while CZ’s lawyers asked for conditional release.
An agreement was finally reached with the Department of Justice, the Treasury and the Futures Market Commission (CFTC): Binance had to pay a record fine of 4,368 million dollars in exchange for reducing the sentence from three years to four months. Zhao’s lawyers also argued that CZ’s return to the United States from the United Arab Emirates to plead guilty was a sign of cooperation, a factor CZ’s defense said should be taken into account when choosing a sentence.
Changpeng Zhao ya He served his time in prison and is currently free.. Although he is no longer CEO of Binance, his fortune was not affected by the authorities’ accusations or by the time he spent in prison. Likewise, CZ is still interested in participating in the development and optimization of virtual currencies, or at least that is what it tells us in your X account.
