Changpeng Zhao pleaded guilty
The fantasy drifting of the former "richest man in China".
Written by | Liu Xingzhi
Edit | Wang Jing
Changpeng Zhao, the former "richest man in China" and CEO of Binance, should be Altman the most envious now.
Over the weekend, OpenAI CEO Sam Altman was ousted by the board of directors of a company he founded, and Altman said on the X app that "it feels like reading your own eulogy while you're alive."
Changpeng Zhao retweeted and commented on the tweet: "When to let go of the company you started is one of the hardest decisions. There was a sense of sympathy between the tones, and the feeling of hurt was something like that.
However, this sympathy lasted only two days.
In the early morning of November 22, Beijing time, Changpeng Zhao suddenly announced his resignation as CEO of Binance, and was replaced by Richard Teng, the former global head of regional markets at Binance.
As Altman returns to his loyal OpenAI, the "palace fight" nature of this big drama becomes clearer and clearer. In contrast, Changpeng Zhao's resignation was not so simple, as he was forced to resign amid multiple charges from regulators.
According to media reports, Changpeng Zhao reached an agreement with the U.S. Department of Justice to agree to plead guilty to criminal and civil charges, in exchange for which the deal could preserve the company's ability to continue operations. In addition, Changpeng Zhao will retain a majority stake in Binance.
Since March this year, Changpeng Zhao and Binance have been accused by the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) of intentionally violating federal laws.
When the SEC decided to submit legal documents to Changpeng Zhao, it found that he could not find this influential figure in the currency circle at all, and his whereabouts remained a mystery until Tuesday, when people familiar with the matter revealed that Changpeng Zhao pleaded guilty in federal court in Seattle.
Changpeng Zhao found his way and no longer "fled", leaving Binance's burden and crisis to his successor, and believers left a message under the tweet of his resignation, "Thank you for everything you have done for the industry".
At the moment, they feel more confused: where is Binance going, where is the cryptocurrency industry going, and where should they go?
A
Changpeng Zhao finally surrendered, and this was foreshadowed half a year ago.
In June, He Yi, a Binance executive who had been trying to avoid the spotlight, was uncharacteristically interviewed by Bloomberg to show goodwill to regulators.
He Yi is indeed the most suitable person.
He Yi used to be a TV host and has a good image, and her relationship with Changpeng Zhao has always been talked about by the outside world. She said that she and Changpeng Zhao are in a "CP" relationship, and that she is both a partner in Changpeng's business and his date — she is the mother of at least two of Changpeng's children.
Ho one
In addition to the anecdote with Changpeng Zhao, He Yi revealed two important information about Binance in the interview. He Yi said that she and Changpeng Zhao each have backup executives to be trained, just in case. Regarding the tightening supervision, she said: "If you can't beat them, you have to surrender." ”
The softening of Binance's attitude has been expected for a long time. Back at the end of last year, when Binance's biggest rival, the FTX exchange, collapsed, there was speculation that Binance, which stood out from the crowd, would be the next target of regulatory crackdowns.
Sure enough, less than half a month after FTX declared bankruptcy, the Singapore Police Force launched a financial crime investigation against Binance, and in March and June this year, the US CFTC and SEC sued Binance and Changpeng Zhao one after another.
His career is in jeopardy, and Changpeng Zhao's life is not safe.
At the same time as the collapse of FTX and the turmoil in the cryptocurrency circle, three cryptocurrency founders died unexpectedly within a month. The first, Nicola Mushegian, was a few hours before he drowned on Ashford Beach in Puerto Rico, when he tweeted that his personal safety was threatened by the CIA.
The second was named Tian Tian Kurland, a billionaire who died in his sleep at the age of thirty.
The third, Vyacheslav Taran, was killed in a crash in southern France in "very mild" weather with an experienced pilot who was familiar with the conditions along the route.
It is difficult not to associate three accidental deaths in succession with conspiracy theories, perhaps out of personal safety concerns, or out of evasion of supervision and delay, for the past year or so, Changpeng Zhao's whereabouts have been a mystery.
According to media reports, Binance's competitors had hired private investigators to track down his whereabouts, and the team "has made great efforts to track down Changpeng Zhao without success, and he suspects that Binance has hired others to cover up Changpeng Zhao's past and whereabouts, making him almost impossible to detect."
The SEC also wants to know where he is. When S.E.C. officials tried to deliver legal documents to the elusive billionaire, they found they couldn't find Changpeng Zhao's real-world location, while Mr. Zhao had been venting his frustration with the SEC on Twitter.
As for where he is, some say he's in France, where Binance received regulatory approval in 2022, others say he's in Singapore, pedaling an electric scooter to work every day, and others are in Dubai, where it's rumored to be building its headquarters in a desert oasis.
B
Before actively or passively starting a "fugitive" career, Changpeng Zhao was used to wandering.
Born in Jiangsu in 1977, Changpeng Zhao had seen rural China under rationing. At the age of 12, he traveled to Vancouver, Canada, with his mother and sister. From arriving in Vancouver in 1989 to graduating from high school in 1995, this was almost the most stable period of Changpeng Zhao's life.
In 2000, Changpeng Zhao gave up his studies at McGill University after a summer internship at the Tokyo Stock Exchange, then moved to New York to work for Bloomberg Exchange, and in 2005, he returned to China after a decade of absence, landing in Shanghai, where he began his crypto life.
Looking back at Changpeng Zhao's experience, he has had a subtle but subtle intersection with some of the richest people in the world today.
Changpeng Zhao
Changpeng Zhao and Elon Musk went to Vancouver to join their father in the same year, but his father was more reliable than Musk. In addition, he is also Musk's ex-girlfriend and Canadian musician Grimes is an alumnus of McGill University.
As for his experience of dropping out of McGill University, it's hard not to be reminded of Microsoft's Bill Gates and Meta's Zuckerberg.
Even in physiognomy, he is somewhat similar to Wang Xing of Meituan, but his figure is longer.
As a child, Changpeng Zhao saw the barren rural China and the developed Western societies of his time, and as an adulthood he worked with Canadians, Americans, and Japanese, and made his first pot of gold in Shanghai, which flourished at the turn of the century. These restless experiences continue to shape his character and career.
Changpeng Zhao used to dealing with people with different faces, and he said that Americans would think of him as Asian, and Asians would think of him as American. "I'm in between," Mr. Zhao said.
This experience and personality have allowed Changpeng Zhao to skillfully use his status as a returnee to act as a broker between the East and the West, and Binance's success has made him one of the most powerful "intermediaries" in the world.
Despite having lived in several countries, Changpeng Zhao insists that he is a Canadian in law and character. "I think like a Canadian. We are kind people, not aggressive, not overly competitive and generally helpful. Changpeng Zhao said.
C
Whether Changpeng Zhao is a "kind, non-aggressive" person is unknown to the outside world, but his business is clearly not like that. In the eyes of many ordinary people, his business is full of fraud, and in the eyes of regulators, cryptocurrencies pose a huge threat to financial security.
After a breakdown with another Chinese crypto bigwig, Xu Xingxing, who left OKCoin, who founded the company, Changpeng Zhao ripped off the fig leaf of the company and its founder, in a lengthy essay citing the company's use of bots to boost trading volumes, falsify proof of reserves and opaque finances.
In response, Xu accused Changpeng of falsifying academic qualifications and committing other frauds. In the wake of the dispute, China has become increasingly regulative of the cryptocurrency industry.
After leaving OKCoin, Changpeng Zhao founded Bijie Technology, a company whose business is hardly good. The exchange, supported by the technology of Big-Jet, has become a hotbed of stamp collectible fraud. According to the Securities Times, ordinary investors lost hundreds of millions of yuan in these transactions, some of whom lost their entire pensions, and the exchange was immediately suspended.
In 2017, Changpeng Zhao founded Binance after the failure of Bijet, but in September of that year, domestic regulators banned ICOs and began shutting down crypto exchanges, forcing Changpeng Zhao and Binance to relocate to Tokyo.
Few sovereign countries would tolerate an exchange like Binance, which is considered a "state within a state" in the eyes of regulators. Rumors have spread that hard-to-trace cryptocurrencies are widely used in terrorist acts and geopolitical conflicts.
Changpeng Zhao laughed at this: "Decentralization is grayscale, not black and white. ”
But as the regulators of various countries came down and a series of accusations flew like snowflakes, the gray area in which Changpeng Zhao was able to stay became narrower and narrower, and the race against supervision became more and more difficult, so Changpeng Zhao decided not to run.
On Tuesday, Changpeng Zhao, who has long been uncertain, appeared in federal court in Seattle to plead guilty, and Binance paid a $4.368 billion fine in exchange for continuing operations. Binance will admit to operating unlicensed money transfers, violating the Bank Secrecy Act, and engaging in prohibited transactions with Iran, according to documents released by the U.S. Department of Justice.
Later that day, Mr. Zhao paid $175 million and was released on bail. The sentencing hearing is scheduled for February 24, 2024, at 1 a.m. Beijing time.
It is worth noting that Binance has not been mentioned as misappropriating user funds and manipulating the market. It remains to be seen whether the regulators will be challenged in the future.
D
Compared with other peers, Changpeng Zhao is undoubtedly one of the lucky ones.
In a tweet announcing his resignation as CEO, Changpeng Zhao said that he would take a break before becoming an investor or an entrepreneur mentor.
This is already the best ending that the outside world can imagine. Just a month before Changpeng Zhao's confession, FTX founder Sam Bankman-Fried was convicted of seven counts of wire fraud, conspiracy to defraud, and conspiracy to launder money, with a maximum sentence of 110 years. Federal prosecutors called it "one of the largest financial fraud cases in U.S. history."
Whether Binance, the same top exchange, has engaged in similar behavior, and whether the more than $4.5 billion fine and bail has saved Changpeng Zhao and Binance from more serious charges?
What is certain is that with Changpeng Zhao's "surrender" to the SEC, which has mastered his whereabouts, and Binance has also promised to cooperate fully with the government, the era of Changpeng Zhao and Binance is over. And this ending may have been doomed when he was hung up with the title of "the richest man in China".
Resources:
"$4.3 Billion Sky-High Settlement: 175 Million Bail Witnesses the End of the CZ Era, Who is the Next Binance?", China Times
"Dialogue with Binance Changpeng Zhao: In the Middle Ground of Cryptocurrency" is late LatePost
"What Shaped Changpeng Zhao?"
"Where Did Changpeng Zhao Go" alphabet list
"The richest genius of the post-90s generation will be sentenced! 190 billion net worth has returned to zero" Shangguan News
"Looking for the former richest Chinese man Zhao Changpeng" is the most talked about FunTalk