Who Is Changpeng Zhao? – Forbes Advisor

Changpeng “CZ” Zhao is the founder and CEO of Binance, the world’s largest cryptocurrency exchange.

Well-known within the industry, Zhao began receiving more widespread news coverage when rival exchange FTX went bankrupt in November 2022.

Zhao was instrumental in breaking up FTX and even offered to buy the company during the liquidity crisis that ultimately led to its bankruptcy. The offer didn’t last long once the extent of FTX’s problems became clear.

In a November 9 post, CZ said, “Following the results of our corporate due diligence and the latest news reports regarding alleged mishandling of customer funds and investigations by our U.S. agents, FTX.com’s potential We have decided not to pursue an acquisition.” tweet.

After the demise of FTX, Zhao became one of the biggest names in cryptocurrency and Binance’s business now significantly outstrips all other crypto exchanges.

The 45-year-old Zhao is still ranked among the 600 richest people in the world, with an estimated net worth of over $4 billion, according to Forbes data.

Early life and education

Zhao was born in 1977 in Jiangsu, China. His parents are teachers and his father was once a professor at the University of Science and Technology in Hefei, a major university in China.

The 1980s in communist China were turbulent times for Zhao and his family. In a blog post on Binance, Zhao wrote about how he fled China at the age of 12 after the Tiananmen Square crackdown.

“On August 6, 1989, my mother and I left China and emigrated to Canada, thousands of miles away. Months later,” wrote Zhao.

Zhao and his family have been waiting outside the Canadian embassy for days for emergency visas to leave Canada following a bloody crackdown on critics of the Chinese Communist Party.

“I remember standing in line for three days outside the Canadian embassy. . “It changed my life forever and opened up endless possibilities.”

Zhao spent his teenage years in Vancouver and held various jobs, including working as a hamburger cook at McDonald’s.

Zhao was interested in computer programming courses even before he entered college. He then studied Computer Science at McGill University in Montreal.

After graduating from university, he interned at a Tokyo Stock Exchange subcontractor, then worked for Bloomberg Tradebook in New York for several years, developing software to match trade orders.

Zhao founded Binance

In 2005, Zhao returned to China and got involved in cryptocurrencies, trying his hand at several different tech startups before founding Binance.

“I was a serial entrepreneur trying to build a successful startup before I realized my passion,” he says of his life before Binance.

In September 2017, the Chinese government banned crypto exchanges from operating in China, just weeks after Mr. Zhao launched Binance. Almost 30 years after his first escape from China, Zhao was forced to leave China again.

The move did little to slow Binance’s growth, and by 2021, the peak year for cryptocurrencies, Binance reportedly processed more than $34 trillion in trading volume.

But it hasn’t always been smooth sailing. Binance has been involved in several notable incidents.

In May 2019, Binance was hacked to steal $40 million worth of Bitcoin (BTC). However, the episode ended well and the customer was fully compensated.

Most of Binance’s disputes are with regulators. Last year, the world’s largest exchange was banned by UK regulators. That same year, it faced a money laundering investigation in the United States in 2021.

For regulatory reasons, Binance has a US subsidiary, Binance. United States, a separate offshoot of the main Binance.

Presumably to appease regulators, Mr. Zhao reversed course last year, announcing that the company would ditch its nomadic structure.

“I am a technology entrepreneur and I am trying to make this reorientation into a fully regulated financial business,” he said of his plans to put down roots and establish a formal and fully compliant business.

Despite these plans, the company remains unconventional, with no standard company structure or formal headquarters.

Binance and FTX Collapse

Investors around the world are concerned that Binance’s dominant share of the global cryptocurrency exchange market poses significant risks to the industry. These risks increased only after implosion of FTX.

In fact, CZ played a big role in the decline and collapse of Sam Bankman-Fried’s crypto empire.

In early November 2022, CoinDesk reported that Bankman-Fried trading firm Alameda Research’s balance sheet was backed by FTX’s native token, FTT. Zhao tweeted that he was planning to sell his Binance position on the FTT “because of what has recently been revealed”.

Zhao’s company invested in FTX three years ago. In 2021, we cashed in our shares in exchange for a payment of $2.1 billion. Importantly, part of this payment was denominated in his FTT.

Binance received approximately US$2.1 billion worth of cash (BUSD and FTT) last year as part of its exit from FTX shares. Due to recent revelations, we have decided to liquidate the remaining FTT on our books. 1/4

— CZ🔶 Binance (@cz_binance) November 6, 2022

Ultimately, the move made the broader crypto market realize that the illiquid FTT token was supporting the bankrupt FTX-Alameda ecosystem.

There was a bank run and customers tried to withdraw money from FTX. However, by that time, the funds were not there as they had been transferred from FTX to Alameda for trading purposes. The deal didn’t go well.

Zhao stepped in and surprised the market by announcing that Binance would buy FTX. However, he went through a quick due diligence process and canceled his contract. He realized that the size of FTX’s losses—his $8 billion hole in the company’s balance sheet—was too great.

#1 Player in Crypto

Zhao is seen as the undisputed leader since the FTX debacle earlier this month.

“Well done; Bankman-Fried tweeted to Zhao, but it is clear that the debacle was caused by Bankman-Fried’s own vicious behavior, not Zhao.”

20) At some point, you may have more to say about a particular sparring partner, so to speak.

But hey, Glasshouse. For now, here’s what I say.

Well done; you won.

—SBF (@SBF_FTX) November 10, 2022

Zhao, the kingpin of the biggest companies in the space, has argued that exchanges need to promote transparency and help repair their damaged reputations.

Binance founder pushes reserve proof model after FTX scandal The system allows customers to prove their assets using a public blockchain.

But critics say even Binance remains worryingly opaque. If you don’t know what Binance is responsible for, having proof of reserves doesn’t really matter.

The future of binance

The future of Binance will definitely be tied to the future of cryptocurrencies as a whole, including the size of the company.

Regulation will undoubtedly be tough. Given the numerous scandals that have rocked the industry, this is a much-needed contingency in the industry.

Binance’s dominance of market share is also a concern no matter how you shake it.

Investors will close their eyes and hope Zhao and Binance do better than the myriad of other centralized players involved this year. They hope nothing is going on behind the scenes. Unfortunately, for now, that’s all they can do. It’s hope.

The collapse of FTX was a watershed moment for cryptocurrencies, and Zhao is the torch bearer.

So far, both inside and outside cryptocurrencies, Zhao has dealt with all obstacles calmly. Nothing is shown that he is incapable. However, the responsibility is great.