Changpeng Zhao’s Net Worth
Changpeng Zhao, also known as “CZ” in the cryptocurrency community, is a Chinese-Canadian business executive with a net worth of $42 billion. He founded Binance, the world’s largest cryptocurrency exchange, and served as its CEO until 2023. In November 2023, Zhao agreed to step down after pleading guilty to violating U.S. anti-money-laundering laws. As part of the settlement, Binance will also plead guilty and pay $4.3 billion in fines.
In 2018, Binance became the largest crypto exchange by trading volume, surpassing competitors like Coinbase and FTX. Zhao’s journey from modest beginnings to immense wealth is notable. He reportedly went from having virtually no assets to a net worth exceeding $100 billion within a year.
In January 2022, at his peak, Zhao was the wealthiest person in the crypto industry, the richest Canadian, and among the top 10 richest people globally. However, his net worth plummeted from $97 billion in early January 2022 to $11 billion by May 2022, marking one of the largest personal losses in history, a record later broken by Elon Musk.
Besides Binance, Zhao contributed to Blockchain.info and served as Chief Technology Officer of OKCoin.
Early Life
Changpeng Zhao was born on September 10, 1977, in Jiangsu province, China. In the 1980s, his family moved to Canada, and he settled in Vancouver at age 12. Zhao’s teachers had taught in China, and his father had been exiled to a rural area due to his political stance. As a teenager, Zhao took various odd jobs, including working at McDonald’s, to help support his family. After high school, he attended McGill University in Montreal, where he studied computer science.
Early Career
After graduating from McGill University, Changpeng Zhao interned with a subcontractor at the Tokyo Stock Exchange, where he developed trade order matching software. He then joined Bloomberg Tradebook, working for four years as a developer of futures trading software. In 2005, Zhao moved to Shanghai, China, and founded Fusion Systems. The company became renowned for creating some of the fastest high-frequency trading systems for brokers.
Cryptocurrency and Binance
Changpeng Zhao began his involvement in cryptocurrency in 2013. Over the following years, he worked on Blockchain.info and served as the Chief Technology Officer at OKCoin. In 2017, Zhao left OKCoin to start his own cryptocurrency exchange, Binance. After raising $15 million through an initial coin offering, Binance rapidly grew and became the largest crypto exchange by trading volume within eight months. Zhao also launched Binance Smart Chain to further support the finance industry’s decentralization.
Originally launched in China, Binance moved its main headquarters and servers to Japan after China announced a ban on cryptocurrency trading in 2017. Despite strong competition, Coinbase has remained the top exchange by trading volume since 2018. Binance explored various locations for its headquarters due to increasing regulations in Japan and China, considering places like Malta and eventually signing a Memorandum of Understanding with the Government of Bermuda.
Binance has expanded into Europe with entities like Binance Jersey and trading platforms on the Malta Stock Exchange. Binance Jersey offers fiat-to-crypto pairs such as the pound and the euro. In 2018, Binance also collaborated with other major exchanges to raise $12 million for a stablecoin project aimed at reducing the volatility commonly associated with cryptocurrencies like Bitcoin.
Binance’s Developments and Controversies
In 2019, Binance partnered with the Israeli payment processor Simplex to enable cryptocurrency purchases with debit and credit cards. This allowed users to buy Bitcoin, Ethereum, and Litecoin. That year, Binance suffered a significant cyberattack, resulting in the loss of $40 million worth of Bitcoin. Despite this setback, Binance launched its first perpetual futures contracts with up to 125x leverage and acquired the Indian exchange WazirX.
In 2020, the Malta Financial Services Authority clarified that Binance was not based in Malta and was not authorized or regulated by them. Binance faced further controversy when leaked documents suggested the company might be deceiving U.S. regulators by allowing U.S. residents to bypass IP address restrictions and trade on the platform.
Although Binance officially blocks U.S. IP addresses, there were questions about the effectiveness of this restriction. In 2021, the IRS and the Department of Justice began investigating Binance for potential money laundering and tax offenses.
In November 2023, Changpeng Zhao (CZ) and Binance agreed to plead guilty to violating U.S. money laundering regulations. As part of the deal, CZ stepped down as CEO, and Binance agreed to pay a $4.3 billion fine. CZ and Binance continue to face separate criminal charges from the Securities and Exchange Commission.
FTX and Sam Bankman-Fried
Before November 2022, Binance and FTX were seen as rival but relatively friendly exchanges. Binance was an early investor in FTX, and as their competition grew, Binance requested that FTX, led by Sam Bankman-Fried, buy out its equity stake for $2 billion. Instead of using cash or Bitcoin, FTX paid with $2 billion worth of its own token, FTT.
In November 2022, Changpeng Zhao (CZ) tweeted a cryptic message hinting at concerns about FTX’s financial health and announced that Binance planned to sell off hundreds of millions of dollars in FTT. This tweet triggered a rapid chain reaction of problems for FTX. Within 12 hours, FTX and Bankman-Fried were left in ruins. SBF, once worth over $12 billion, faced house arrest and charges of fraud and money laundering. FTX filed for bankruptcy, and SBF was arrested and extradited from the Bahamas to the U.S., marking a dramatic fall from grace.
Real Estate
In 2021, Changpeng Zhao purchased a home in Dubai, signaling his support for the city’s favorable stance on cryptocurrency. He stated that buying the apartment was a way to demonstrate his commitment to establishing a presence in Dubai. Earlier that year, Zhao had claimed he didn’t own a house or a car because he viewed these assets as “illiquid.” It appears that Zhao’s approach to real estate is more of a strategic business decision rather than personal luxury.