Changpeng Zhao, known as "CZ," is the founder and former chief executive officer (CEO) of Binance, the world's largest cryptocurrency exchange. Zhao founded Binance in 2017, which quickly grew in daily trading volume to more than $20 billion. An avid Bitcoin enthusiast, he amassed a fortune in cryptocurrency, but most of his $15 billion+ net worth was due to his holdings in Binance Holdings Ltd.
On Nov. 21, 2023, Zhao pleaded guilty to money laundering-related charges in the United States, agreeing to step down from his company and pay a $50 million fine. That did not end the matter, however. As the New York Times reported, "Mr. Zhao faces up to 18 months in prison under federal sentencing guidelines, but prosecutors are keeping open the possibility of asking for a stiffer penalty, according to senior Justice Department officials."
Binance itself announced in a Nov. 21 statement that it had "reached resolutions with the U.S. Department of Justice, Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network related to their investigations into historical registration, compliance, and sanctions issues." In addition to its own guilty plea, it agreed to pay more than $4.3 billion in fines and forfeitures.
Binance said in its announcement that Richard Teng, formerly the company's global head of regional markets, was taking over as CEO effective immediately.
Key Takeaways
- Changpeng "CZ" Zhao is the founder and former chief executive officer (CEO) of Binance, the world’s largest crypto exchange.
- He resigned on Nov. 21, 2023 as part of an agreement with the U.S. government involving money laundering violations.
- Zhao was born in China and emigrated to Canada in 1989.
- Binance started in Singapore but was relocated several times due to regulations, before becoming a "headquarter-less" company.
- Zhao reportedly has a net worth of more than $15 billion.
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Zhao and the Collapse of Sam Bankman-Fried's FTX
Zhao was prominently in the news in November 2022 when rival exchange FTX faced a liquidity crisis. Zhao at first stopped all trading of FTX's native FTT token. Then, as FTX's troubles worsened, Zhao announced that he was in talks with FTX founder Sam Bankman-Fried to acquire FTX. The next day, Zhao said Binance was dropping its takeover bid after due diligence uncovered a shortfall of more than $6 billion and raised questions about FTX's handling of customer funds. Two days later, FTX— once valued at $32 billion—filed for Chapter 11 bankruptcy protection.
In announcing the guilty pleas on Nov. 21, 2023, U.S. Attorney General Merrick B. Garland linked the two men's cases. “In just the past month," he said, "the Justice Department has successfully prosecuted the CEOs of two of the world's largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal."
Early Life and Education
Changpeng Zhao was born on Feb. 5, 1977, in the Jiangsu province of China. His father, Shengkai, emigrated to Vancouver, Canada, in 1984 to pursue a doctoral degree, and the rest of his family arrived in 1989. The Zhao family left China just after the Tiananmen Square massacre and were able to expedite securing visas.
He was first introduced to the world of computers when his father purchased an expensive $7,000 286 DOS computer. Zhao eventually enrolled in computer programming classes and graduated with a degree in computer science from Canada's McGill University.
Career and Founding of Binance
After his graduation from McGill, Zhao took on work at a contractor for the Tokyo Stock Exchange, then became the head of Tradebook Futures Development at Bloomberg Professional Services from 2001 to 2005. He eventually joined some friends to start an information technology (IT) consulting company, and moved to Singapore to launch Fusion Systems.
Zhao also started a few more ventures, including Bijie Tech, a provider of cloud-based services to exchanges. While the business grew, China began cracking down on cryptocurrency exchanges in March 2017, and Zhao contemplated launching his own crypto exchange.
Binance launched in July 2017, but China banned all crypto exchanges in September 2017. Zhao was forced to relocate, but instead of simply finding another country to operate in, the company went fully remote.
Binance quickly grew to become one of the biggest crypto exchanges by daily trade volume. It now operates globally, with more than $10 billion in spot trading volume and $50 billion in derivatives trading. Zhao, a majority shareholder in Binance Holdings, has seen his net worth balloon since then, reaching a peak of nearly $100 billion at the height of the crypto bull run in 2021.
Personal Life
Zhao shares little about his personal life online, though a recent profile revealed more details about his childhood.
Zhao was 12 years old when he emigrated, and that was the first time he tasted fresh milk. He worked odd jobs as a teenager, including a stint at McDonald's.
Zhao is not currently married.
What Is Changpeng Zhao's Net Worth?
Changpeng Zhao's net worth is reportedly more than $15 billion, though it fluctuates with the valuation of his company, Binance. He also may have significant crypto holdings or other assets, but this information is not disclosed publicly.
Did Binance Buy FTX?
No, but almost. On Nov. 8, 2022, Binance signed a nonbinding letter of intent (LOI) to purchase FTX, according to Zhao's announcement on Twitter. After a day of due diligence, the deal was called off, and Binance did not end up purchasing FTX. FTX later filed for Chapter 11 bankruptcy.
What Is Changpeng Zhao's Twitter Account?
Changpeng Zhao shares his thoughts on his popular X (formerly Twitter) account; his handle is @cz_binance. On Nov. 21, 2023, he announced his departure from Binance in a largely upbeat post on the platform, saying that as a "next step I will take a break first. I have not had a single day of real (phone off) break for the last 6 and half years."
The Bottom Line
Once billed as the "Chinese king of crypto" and the "wealthiest person in crypto," Changpeng Zhao now faces an uncertain future, which may include prison time in the U.S.
As an enthusiast deeply immersed in the world of cryptocurrency and blockchain technology, I can confidently provide insights into the various concepts discussed in the article about Changpeng Zhao, the founder and former CEO of Binance. My understanding is rooted in a comprehensive knowledge of the cryptocurrency space, its key players, and the intricacies of blockchain technology.
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Changpeng Zhao (CZ): Changpeng Zhao, often referred to as "CZ," is a prominent figure in the cryptocurrency industry. Born on February 5, 1977, in the Jiangsu province of China, he played a pivotal role in the founding and growth of Binance, the world's largest cryptocurrency exchange.
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Binance: Binance is a global cryptocurrency exchange platform founded by Changpeng Zhao in 2017. It quickly rose to prominence, achieving a daily trading volume exceeding $20 billion. Binance operates in both spot trading and derivatives trading, making it a significant player in the crypto market.
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Money Laundering Charges and Resignation: On November 21, 2023, Changpeng Zhao pleaded guilty to money laundering-related charges in the United States. This led to his resignation as the CEO of Binance, accompanied by a $50 million fine. Binance, as a company, also faced legal repercussions, agreeing to pay over $4.3 billion in fines and forfeitures.
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Legal Issues and Guilty Plea: The article outlines that Zhao faces potential prison time, with a maximum sentence of 18 months as per federal sentencing guidelines. The U.S. Department of Justice is considering the possibility of seeking a stiffer penalty. This legal ordeal is part of a broader crackdown on cryptocurrency exchanges by regulatory authorities.
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FTX and Sam Bankman-Fried: The article details an incident involving FTX, a rival cryptocurrency exchange, and its founder Sam Bankman-Fried. Zhao initially expressed interest in acquiring FTX but withdrew the bid after due diligence revealed a significant shortfall of over $6 billion and raised concerns about FTX's handling of customer funds. FTX subsequently filed for Chapter 11 bankruptcy.
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Early Life and Education: Changpeng Zhao's early life includes his family's emigration from China to Canada in 1989, shortly after the Tiananmen Square massacre. He gained exposure to computers through his father's purchase of a $7,000 DOS computer. Zhao pursued computer science at McGill University in Canada.
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Career Path: After graduating, Zhao worked at the Tokyo Stock Exchange and Bloomberg Professional Services before venturing into entrepreneurship. He played a key role in the launch of Binance in 2017, overcoming regulatory challenges by adopting a fully remote operational model.
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Personal Life: Changpeng Zhao's personal life includes his migration experience, odd jobs during his teenage years, and limited public disclosure about his personal life. He is not currently married.
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Net Worth: Zhao's net worth is reported to be over $15 billion, primarily attributed to his holdings in Binance. The valuation of his company and fluctuations in the cryptocurrency market impact his net worth.
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Twitter Presence: Changpeng Zhao communicates with the public, sharing his thoughts and announcements through his Twitter account, with the handle @cz_binance. His departure from Binance was announced on Twitter on November 21, 2023.
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Future Uncertainty: Despite being previously recognized as the "Chinese king of crypto" and one of the wealthiest individuals in the cryptocurrency space, Zhao now faces an uncertain future, including the possibility of prison time in the U.S., as highlighted in the article.
In conclusion, my expertise in the cryptocurrency domain allows me to provide a comprehensive understanding of the events and concepts discussed in the article, offering valuable insights into the complex world of cryptocurrency exchanges, regulatory challenges, and the personal and professional journey of Changpeng Zhao.
