He Yi: Replacing Changpeng Zhao in Binance's "First Sister in the Currency Circle"

Introduction: He Yi, a former talk show host, has extensive control over the crypto giant's marketing and investment arm, as well as the long-term romantic partner of founder Changpeng Zhao.

The US authorities crushed the "king" of the crypto world, but the "queen" still stands.

Changpeng Zhao was forced to end his leadership at Binance early for violating anti-money laundering laws. The government's allegations show that the world's largest crypto exchange became a conduit for international money transfers for terrorists, drug traffickers, and sanctions violators.

In this turmoil, He Yi was unscathed. She co-founded Binance with Changpeng Zhao and has been his main partner in running the exchange. She is also Changpeng Zhao's romantic partner and has three children.

Since Changpeng Zhao resigned last month, Mr. He, 37, has taken over the role of Binance's defender, calling critics "mediocre and hopeless" on the X site, once known as Twitter. She recently led an open communication with the platform's new CEO, Richard Teng, to reach the platform's Chinese users, which showed her status.

For some former Binance executives, she represented the company's strategy to resist regulation, leading to the company pleading guilty and paying a $4.3 billion fine, the highest ever imposed on a crypto company. In addition, Binance is also battling over another lawsuit with the U.S. Securities and Exchange Commission.

In Mr. Zhao's absence, He Yi became the company's largest shareholder, with broad control over its marketing and investment arm. Despite the cautionary tale in the judicial department's case, Binance remains the most powerful platform in the crypto space, processing billions of dollars in transactions every day. People familiar with the board's hiring process said Ho used her influence in electing Binance's new independent majority-owned board.

Binance executives have recently approached a number of candidates, including Ella Zhang, a close friend of Ho's and previously headed Binance's venture capital division. It was unclear whether Ms. Zhang would respond to a request for comment.

Like Mr. Zhao, Mr. Ho ignored the importance of the rules set by regulators to combat financial crime, some former executives said. Although she was not named, she was mentioned in Binance's plea agreement for helping to find ways for U.S. users to illegally trade on the platform.

In early settlement discussions, the Justice Department had hoped that Ho would leave, but it was unclear why that was ultimately not achieved, according to people familiar with the negotiations.

A spokesman for the Justice Department declined to comment.

A Binance spokesperson did not comment on Ho's role in the case, but said the company had acknowledged mistakes in the past and made improvements. The spokesman said Ho Yi supported the change.

"I fully support the company's new direction, and I aspire to turn the page on this challenging, but also learning Xi and growth," He Yi said in a statement. ”

When asked if she was involved in recruiting new board members, Binance said the process included "vetting of potential candidates by relevant stakeholders."

Mr. Zhao's lawyer did not respond to an invitation for comment.

This article's description of how Ho Yi shaped Binance is based on interviews with current and former employees, court documents, Binance insiders, and the company's previous public statements.

Crypto Love

He is a Chinese-born and Canadian-educated software programmer. She is a Chinese travel presenter who grew up in a village in Sichuan Province to a poor teacher's family.

Their love stems from the crypto realm.

He Yi first met Changpeng Zhao at a crypto conference in 2014. At the time, Changpeng Zhao was working for a company that developed digital wallets and impressed He Yi during a presentation about the potential of crypto. She later mentioned this in an interview with a British journalist. Subsequently, she invited Changpeng Zhao to join OKCoin, a new crypto exchange in China that she founded, as the chief technology officer.

The couple started dating while working together in Shanghai. At the time, Changpeng Zhao was also in a relationship with another woman, and they had children. Later, they broke up.

In 2017, Changpeng Zhao founded Binance, and He Yi joined him as co-founder and chief marketing officer. She played a crucial role in Binance's early growth and is more well-known in China's crypto community than Changpeng Zhao. The Chinese media called her the "first sister" of the crypto world.

She has told employees that even if there is even the smallest problem on the exchange, they should do their best to reassure users. In a message, she told employees to give their full attention to fighting any negative publicity.

She told a Chinese media outlet: "Even Changpeng Zhao looked at me and said, 'You don't have any hobbies. I replied, 'My hobby is working for Binance.'" ’”

In difficult times, she sent messages aimed at encouraging employees, which some people thought were a bit exaggerated.

In a 2019 letter, she wrote: "War is not just 'an arrow piercing through the clouds, thousands of armies meet each other,' but also bloody battles and the conquest of cities and territories." This quote was quoted by her from the movie "Kung Fu".

He Yi recruited a group of volunteers, known as "Binance Angels," to spread Changpeng Zhao's message that crypto would liberate people from the traditional financial system. The move was successful, but it also came with risks, as some former Binance executives, as well as complaints from the Commodity Futures Trading Commission, alleging that Binance Angel instructed users on how to circumvent trading restrictions in the United States and China.

A spokesperson for Binance said the company insisted that Binance Angel "comply with applicable laws."

He led the marketing strategy of an independent U.S. exchange that launched in 2019, when Binance claimed that the exchange was completely independent. One employee sent a message to another employee that year: "Ho Yi is calling the shots. The Justice Department said the exchange, known as Binance.US, was a ploy to distract U.S. authorities from major Binance.com platforms.

As her marketing efforts attracted a large number of users, He Yi also amassed a fortune of her own.

People with knowledge of the exchange's finances said she holds at least 10 percent of Binance's Cayman Islands holdings. She once told a Binance business associate that her stake made her one of the richest women in the world. At the peak of the crypto market in 2021, former executives valued Binance at more than $300 billion. A spokesperson for Binance said that as a private company, the company would not share these details.

At the time, Ho Yi and Changpeng Zhao were living together in a mansion on Singapore's Sentosa resort island. He Yi hosted a small wedding for two colleagues on their $11 million yacht, which was called "Da Moon." A Binance employee wrote on Instagram: "Crazy rich Asians get married on the yacht of a very beautiful lady. ”

Employees generally believe that within the company, He Yi is regarded as the No. 2 person after Changpeng Zhao.

However, in front of the employees, Changpeng Zhao treated He Yi like an employee, to show that he did not give her special treatment. During a company call, the former executive said he had told her that she needed to improve her English.

Signed Cristiano Ronaldo

In 2021, Binance brought in executives from outside the crypto industry to reinvent its compliance and marketing efforts.

The new marketing team told Ho that Binance needed to build partnerships with respected institutions and run traditional advertising campaigns to gain credibility with the public and regulators, people with knowledge of those campaigns said.

Ho Yi hopes Binance will follow the lead of other crypto exchanges and run a massive advertising campaign in the SuperBowl the following year. However, the executives told her that it was risky given that Binance's global exchange business was unlicensed in the United States. Eventually, the company decided not to do the Super Bowl commercial.

In 2022, Binance signed football star Cristiano Ronaldo. According to former executives involved in the project, the contract is worth about $60 million for three years and includes costs such as player time, promotions and appearances.

A spokesperson for Binance said those details about Ronaldo's contract were inaccurate, but did not provide further clarification.

Binance's VP of Global Marketing drove an aggressive campaign aimed at maximizing the return on this expensive deal, including TV advertising in key markets.

After the launch of Ronaldo's campaign, which took place on Twitter and television, Ho complained to her team about the lack of immediate returns in terms of the number of users and the cost of the project. The Vice President subsequently left the company.

This is an example of what former Binance executives called Ho Yi's "grave project." The former executive, along with other former executives, said she often blames the people who lead her projects when they don't meet her expectations.

A Binance spokesperson said Ronaldo's campaign exceeded the company's goals, including new user sign-ups, generating "billions of media exposure."

The spokesman denied the description of Ho's project. "We encourage trying new things, making mistakes and constantly improving," he said.

A spokesman for Ronaldo did not respond to a request for comment.

"Build Block"

Another of Ho's projects plans to create a Netflix-like movie studio. She offered to make a series similar to the Marvel Cinematic Universe, featuring Binance's early employees as the main heroes. The idea was shelved.

Under He Yi's leadership, Binance produced a series called "Building Blocks," in which crypto entrepreneurs fought for Binance's investment, similar to Shark Pool. The show's contestants and judges appeared as computer-generated avatars, which Binance says is the first metaverse-based reality show.

Ho served as a guest judge on the premiere show, which garnered 4,400 views on YouTube. One of the producers responsible for producing the show was made redundant.

In 2022, Ho has been pushing Binance to support a project that plans to sell digital identities from the Pacific island nation of Palau to the outside world for $248. The project will enable residents of Binance's banned countries, including China and the United States, to access its trading platform.

Executives have warned Ho that the Palau plan could pose reputational and legal risks. However, according to some former Binance executives, she stuck to the push because she wanted to provide a backdoor avenue for Chinese users. When WSJ reported on the project earlier this year, Binance stopped accepting Palau ID cards.

A spokesperson for Binance said the company did not work with any partners after conducting due diligence on the project.

Later in Mr. Zhao's tenure, as negotiations with the U.S. Department of Justice deepened, a former Binance executive said that He took over more of the day-to-day management of the exchange.

A few weeks after Binance laid off more than 1,000 of its more than 8,000 employees this summer, she criticized employees on the company's chat platform for reacting emotionally rather than rationally to the layoffs. She tried to motivate employees, saying that Binance would emerge from yet another "rebirth."

When the U.S. Department of Justice announced Changpeng Zhao's plea agreement, He Yi made more succinct remarks. She wrote on Twitter: "A new page, move on. ”（WSJ）

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