Changpeng Zhao. Who is the visionary, boss, and founder of Binance?

Who is Changpeng Zhao, also known as CZ? What information do we have about him? We attempted to raise the veil of the mystery that surrounds the quiet and restrained CZ in this article.

Who is Changpeng Zhao?

• First name: Changpeng
• Name: Zhao
• Nationality: Canadian
• Date/Place of birth: September 10, 1977 / Jiangsu, China
• Personal net worth: $65 billion
• Occupation: Founder of the cryptocurrency exchange Binance

Biography of Changpeng Zhao

• Born in China on September 10, 1977.
• Leave for Canada in 1980
• Returned to China in 2005, this time to Shanghai. Fusion System Development
• Changpeng Zhao discovers Bitcoin in 2013 and buys his first bitcoins in 2014.
• Binance and BNB are born in 2017.
• The Binance Smart Chain is born in 2020.

The origins of Changpeng Zhao

It all started on September 10, 1977, in the Chinese state of Jiangsu. Later, towards the end of the 1980s, while he was still a toddler, the Tian’anmen Square protests flipped the CZ’s life upside down. This protest movement of Chinese students, intellectuals, and workers attempted to expose the country’s corruption. The ensuing crackdown drove his parents, both professors and “pro-bourgeois intellectuals,” to leave for Canada and settle in Vancouver, British Columbia.

CZ had various jobs during his adolescence to help support his parents financially. At some point he was a chef at the well-known burger restaurant McDonald’s. He also worked as a night watchman at a petrol station. Following that, he studied computer science at McGill University in Montreal, Quebec. Perhaps it was on this occasion that he became acquainted with French, a language he learned how to speak in his youth but has since lost due to a lack of frequent practice.

Following the graduation, he started the career at the Tokyo Stock Exchange (TSE). He was then in charge of designing software to match trade orders with each other and then spent four years as a trading software engineer at Bloomberg Tradebook. In less than two years, he was promoted three times and led brunches in New Jersey, London, and Tokyo.

He relocated to Shanghai in 2005 to start his own business. There he founded Fusion Systems, which is notable for supplying some of the quickest high-frequency trading systems for brokers. As he himself says:

“I’m actually a bad trader, but I know how to do trading systems. I think of myself more as the blacksmith who provides people with their swords“

2013, Changpeng Zhao and his discovery of Bitcoin

And then… Bitcoin. CZ initially learned about Bitcoin from Bobby Lee and Ron Cao during a poker game in 2013. Bobby Lee was the CEO of BTC China at the time, one of the original bitcoin exchanges that have since closed down. Ron Cao is an institutional investor who formerly worked at Lightspeed Ventures. He presently serves as the CEO of Sky9 Capital. Both were CZ’s close buddies, whom they had known since 2008-2009.

“CZ, you should consider converting 10% of your capital into Bitcoin. There is a small chance of it going to zero but a bigger chance of your investment being multiplied by 10.” “Basically, it was like discovering the Internet in 1989.”

During a poker game CZ, took his friend’s advice seriously and dug into the Bitcoin whitepaper. He felt the idea was brilliant.

However, he did not take action at this specific moment. The true turning point for him occurred in December 2013, at the Inside Bitcoins conference in Las Vegas, which at the time drew approximately a hundred enthusiastic early adopters. This conference provided him with the opportunity to speak with some of them, who are destined to be the future leaders in this emerging field:

• Vitalik Buterin, Ethereum’s co-founder
• Charlie Lee, the Litecoin founder
• Matt Roszak, the creator of the Bloq firm
• Brock Pierce, venture capitalist and Bitcoin Foundation chairman

CZ, who had previously got knowledge on the power of cryptographic technology, then said to himself: “If such a community supports Bitcoin, then I too must be part of the adventure.“

He was now certain that this technology will be utilized to construct the future. He quit his start-up at the end of 2013 to devote himself entirely to the realm of cryptocurrencies, which was still referred to as “the Bitcoin business” at the time. He sold his condo in early 2014 and used the proceeds to purchase Bitcoin. At the time of purchase, bitcoin was worth roughly $600. Unfortunately for him, Bitcoin’s value decreases to $200 a few months later:

“Suddenly, I lost two-thirds of the price of my apartment immediately” says CZ. “And I still hold those bitcoins today.”

During the same time period, the real estate market prices skyrocketed. Something to really test your beliefs! The price of the first cryptocurrency on the market will take two long years to recover, never to dip below that level again.

“Quite honestly, by this time I had come to a point where I understood Bitcoin really well. I knew this was going to be the future. I had a very strong belief in his future.“

CZ was already involved in the bitcoin sector. He was quick to find work and was highly compensated for it. As a result, the downturn has had little impact on his way of living. He claims that it was the social pressure, particularly from his environment, that was the hardest to handle. CZ’s strength of belief helped him to absorb the shock and continue his path when many of us would have given up.

His first crypto job? He got it through Blockchain.info. As a development manager, he joined the cryptocurrency platform. Following that, he worked for OKCoin, another well-known cryptocurrency exchange, as Chief Technology Officer. However, he only stayed there for a year.

CZ grasped the logic of the crypto-asset exchange as well as the functioning of the whole business while working with OKcoin. Later, due to some disagreements with OKcoin’s creator, Xu Mingxing, he quit OKcoin and decided to start his own company. Company that specialize in cash-based digital asset transactions, like today’s Binance. Indeed, CZ has a new plan in mind – to make his own cryptocurrency exchange!

Changpeng Zhao, the birth of Binance

The ICO craze of 2017 resulted in massive financial inflows and record volumes. It was finally time. Changpeng Zhao made the decision to act. He began his ICO by taking advantage of still-flexible regulations and the allure of Bitcoin, whose dramatic spike caught all eyes at that moment. He raised $15 million in July 2017 through the public sale of 200 million tokens for his upcoming Binance platform. The BNB token was born.

After detailed planning for two years, Binance was initially created on June 24, 2017, and began issuing Binance platform currency BNB.
The platform raised $15 million in crypto assets in less than a week at the time. Later, on July 14, 2017, Binance’s web terminal became life, and BNB was made available for online trading. At the moment, the BNB issue price was 0.15 USD, while the lowest price following the debut was 0.23 USD. It didn’t matter that Binance is the industry leader. If it weren’t for Binance, we wouldn’t be able to convert Bitcoin to Ether. The wind was about to change and naturally attract potential entrepreneurs.

Binance was discovered in September of the same year by Sequoia Capital, a Chinese startup capital firm. Initial discussions between Sequoia Capital and Binance’s investment letter of intent valued Binance at $80 million USD, while aquiring around 11% of Binance’s shares, and eventually attracted another major venture capital company, IDG.

After two rounds of assestments, the Binance team presented a new value report to Sequoia Capital in December. Sequoia Capital chastised him fiercely this time, but CS was adamant. Sequoia Capital sued him in Hong Kong on April 25th, claiming that Binance broke the investment exclusivity agreement and wanted to sit on two chairs. The hearings had lasted several months, and the final investment contract has yet to be signed. But then the price of Bitcoin started to increase. Bitcoin has surpassed the $20,000 mark by December. Changpeng Zhao told Sequoia Capital at this time that Sequoia’s quote severely undervalued the value of the exchange, as did the price suggested by IDG Capital. It’s significantly higher. The market was the perfect proof of his words.

The price of a Bitcoin continued to rise, but the problem stayed – Binance broke the exclusive deal made with Sequoia. Of course, the original value and the earlier evaluations were obviously different, but the company signed the exclusive deal previously, and now they were the one who tore it apart. Zhao Changpeng appeared to be unconcerned about the trustworthiness subject.

“When we started, if you had asked me, I would have told you that my goal was to make Binance the #1 platform in the market within 3 to 5 years.“

Only 6 months after its creation, Binance already took the lead in the rankings. “We were very lucky,” says CZ, “but we also worked really hard for it.”

The rise was super rapid, almost too fast. “At Binance, all of the issues we faced were in maintaining this quick growth.” Binance, like any new start-up, was struggling to acquire the trust of existing organizations to get fundamental necessities like finding a place to open the office. Binance was unable to rent big offices in Japan since it lacked a track record of substantial activities.

Cz, his most difficult challenge at Binance

However, don’t think that Binance had it all easy from the start. A few challenging decisions set the route for Binance’s early months of existence. CZ recalls one in particular vividly. He even calls it “the most difficult obstacle he had to confront as an entrepreneur.”

The Chinese government prohibited ICO fundraising in September 2017 because it believed that more than 90% of projects were in breach of current fundraising rules or were fraudulent. The state mandated the refund to the investors who participated in ICOs. Binance had hosted four initial coin offerings (ICOs) on its platform at the time.

Projects who obtained funding through token distribution were supposed to issue complete refunds. However, as CZ points out:

“The projects spend a lot of this money raised by investing on the development of their activities. They were often unable to repay investors in full.”

After the accounts were emptied, there was still a $6 million disparity in favor of the investors. CZ then taked the initiative to make up the gap. He received a lot of help from the community for this.

Nonetheless, this sum was substantial to him at the time. To refresh your memory, it was $6 million to supply, two months after he raised $15 million to launch his firm with Binance. That was more than one-third of the funds. According to CZ, the most difficult problem for an entrepreneur is “making the proper judgments with a limited quantity of knowledge about the circumstance.”

A Dazzling adoption

Despite the hardships that came with starting a business, he settled in Taiwan as his career grew. He took advantage of the chance to hire additional staff by making an announcement on his Twitter account. It had 33,000 followers at the time. There are currently over 5.4 million people that follow him on a daily basis. He then relocated the headquarters to Malta due to a missing official licenses in Japan.

Binance expanded its activities between 2018 and 2020 in order to attract users and build its platform further. Everyone was using to Binance because it was so simple to buy cryptocurrency. Binance quickly became the preferred exchange for people. CZ describes one of the greatest revolutions that took place at the time on its crypto exchange:

“One of the significant improvements implemented in recent years is customer service. On many exchanges, this service has improved drastically. When Binance started [in 2017], if you contacted a cryptocurrency exchange, you could wait weeks or even months for a response. Even though your money could during that time be blocked on the platform. Binance decided to change that and many competing exchanges copied us on this aspect.“

Binance offered over 120 different cryptocurrencies and 240 trade pairings as of 2018. They received thousands of applications from various projects desiring to be included on the site.
Having a spot on Binance was already the certainty of placing the odds on its favor at the moment. It meant your project would be able to find its customers and get financed. And the selection process was complex and demanding; only 3% of companies that applied were able to get golden grail. A tremendous accomplishment for the people behind the projects, but especially for Binance, after just a few months in operation. Everything in cryptos was moving so quickly!

Everything seemed to be moving in the right direction… Then catastrophe hit.
Binance was hacked on May 7, 2019, loosing 7,000 BTC, or 2% of the total amount of BTC owned by the exchange at the time. Changpeng Zhao then made a decision that changed the future of the world’s first crypto-stock exchange: Binance was willing to compensate any customer losses through its SAFU fund. Binance established this Security Fund for Users (Secure Asset Fund for Users) as a safety reserve in the case of such an incident. CZ used to tweet “Funds are safe” throughout different platform maintenance operations for the record. 

The bull run of the Binance Smart Chain in 2021

Binance accelerated its growth in 2020. The company predicted what customer would want and created its new product in response to the DeFi (Decentralized Finance) craze of summer 2020. The Binance Smart Chain has been launched, driving tiny carriers into the center of the world of farming and insane rewards. CZ executed his brilliant plan by taking advantage of the fact that the Ethereum blockchain has been made nearly useless due to high transaction costs. It did put Binance and its blockchain in the spotlight for the whole first quarter of 2021. The price of the BNB token skyrocketed as a result of the buzz, rising from $25 to over $600 in a few months. CZ recalled his objectives on this occasion.

“A lot of people see Binance only as a cryptocurrency exchange. […] This is one of our businesses, yes, the first that has grown. But first, we want to increase cryptocurrency adoption and use cases. […] I see a completely decentralized future. In 5 or 10 years, Binance may be gone but BNB will continue to exist and Binance will have made its mark in the decentralized world.“

How does CZ manage Binance so massive and spread around the globe? In this fast-paced world of cryptocurrency, how could he not feel overwhelmed? A world in which the product that is trending now may become obsolete in a year? What exactly is his secret? CZ responds mischievously, “the secret?” “There are no hidden secrets.”

Binance’s organization chart, according to Changpeng Zhao, is quite flat. Many workers are allowed to take whatever measures they see suitable under the circumstances. As a result, Binance is extremely adaptable and sensitive to market conditions and upcoming technology breakthroughs.

“We operate through a multitude of small teams and each of them does what they deem to be best for Binance. And sometimes, with this operation, things happen, as if by magic.“

CZ also aims to turn Binance into and organization that would no longer be dependent on him and would run totally autonomously, without his intervention. Of course, he would continue to contribute 100 percent to Binance’s operations. His contribution, though, would be voluntary. Would CZ try to follow Satoshi’s example? “This is the next task I’d like Binance to take on… I want to be able to continue my way without relying on Binance.”

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Cz’s vision of the future of Blockchain

According to CZ, in the guessing game, our guesses will not be better than everyone else’s. However one should feel free to practice. Over the next five years, he predicts a generalization of bitcoin use cases across communities.

This tendency appears to be reaffirmed today. The most visible and recent example is the tremendous inflow of bitcoins delivered in support of the Ukrainians within hours. In this case, only government could assess the funds and use a new mechanism of transmission. The Russian-Ukrainian war highlights the issues of fiat currencies and the power games between the euro, dollar, yuan, and ruble. Today, we see that a part of the predictions given by CZ in 2020 are becoming reality.

Changpeng Zhao, Binance and the democratization of cryptocurrencies

The core objective of Binance is not to focus on its controlled exchange business. On the contrary, according to his comments, CZ’s ultimate goal has always been to enable the free circulation of money.

“Today we have freedom of opinion in many countries, to a certain degree. We have a free flow of data and information with the internet in most parts of the world. We have freedom of the press, and prohibition of slavery. Whenever the humanity has the opportunity to strengthen its freedoms without sacrificing other aspects, our civilization advances. But today, our currency remains not free.”

When transferring big sums of money, you are being asked questions. You’ll have to pay a lot of fees too. “Today, we have the possibility to increase our financial independence without losing other factors like security or convenience of usage.” In fact, we will be able to improve this usability. Changpeng Zhao is seen as an entrepreneur who started a Binance platform. But, without a doubt, we may look at him as a visionary, deeply committed to the crypto world. According to CZ, the majority of today’s financial services will be decentralized in the future, corporations will gradually shift toward teams formed and scattered around the world. In this future environment, CZ envisions Binance transitioning from a controlled exchange to an infrastructure provider in the cryptocurrency sector. The leaders of today’s crypto world may turn out to be the leaders of tomorrow. 

Did Changpeng Zhao resign?

Changpeng stated his intention to collaborate with foreign regulators during a virtual news conference on Tuesday, following a series of crackdowns by authorities across the world on the world’s largest cryptocurrency exchange.

This is why the corporation is seeking for a replacement for Zhao who has solid regulatory experience.

As part of its aim to become a regulated financial institution, Binance is seeking to obtain licenses in numerous jurisdictions. The Cayman Islands-based corporation will build multiple regional headquarters throughout the world, the sites of which have yet to be identified. Binance will also increase its hire of compliance professionals globally, with intentions to quadruple its workforce by the end of the year. A request for comment was not returned by the corporation.

Binance is altering its operations as it attracts increased scrutiny from worldwide regulators. The United States Justice Department, the Internal Revenue Service, and other organizations are looking into the corporation for possible money laundering and tax violations. Binance was barred from engaging in “any regulated activity” in the United Kingdom last month by the country’s finance authority. When it was unable to fulfill anti-money laundering criteria, the firm withdrew its application to register with the UK authorities in May.

Recently, Japan’s Financial Services Agency issued a warning to Binance for operating without a license, while Thailand’s Securities and Exchange Commission filed a criminal complaint against the firm for the same offense. Binance was even cautioned by the Cayman Islands’ financial regulator that it is not permitted to operate a cryptocurrency exchange from its jurisdiction.

On Tuesday, Zhao reaffirmed the company’s commitment to regulatory compliance, adding, “Longer term, playing within the rules, 100 percent compliant.” It’s far preferable to stay inside those parameters. That trade-off is quite evident.” In a blog post earlier this month, the CEO stated that the exchange hasn’t “done everything perfectly right… but [we] restate our commitment to collaborate with regulators.” Compliance is a struggle, especially in emerging industries like cryptocurrency.”

Binance has consistently maintained a more permissive regulatory stance than its competitors and provides riskier products such as crypto derivatives. Coinbase and Huobi, two of the top three crypto exchanges in the world, along with Binance, have regulatory licenses. The SEC regulates Coinbase, which is based in the United States and does not function as a derivatives exchange. Huobi has valid operating permits in Japan, South Korea, Thailand, and Gibraltar, among other places. Kraken, located in the United States, is the fourth-largest exchange and is regulated by authorities in the United States, the United Kingdom, Canada, Australia, and Japan.