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Changpeng Zhao, the “normal guy” who conquered cryptocurrencies
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OK! Changpeng Zhao pleaded guilty to violating US anti-money laundering laws and agreed to step down as CEO of Binance.
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Changpeng Zhao pleaded guilty to violating US anti-money laundering laws and agreed to step down as CEO of Binance.
During his time at the helm of the world’s largest cryptocurrency company, former Binance boss Changpeng Zhao, who will be sentenced in the United States on money laundering charges next Tuesday, has perfected the humble executive exterior.
At parties, on stages and at meetings, he was rarely seen without his black polo shirt, emblazoned with his company insignia, complemented by the company logo tattooed on his arm.
It was crucial to consolidate the myth of a boy who came from the hardships of China and who once made burgers for a living in Canada, before amassing a fortune still estimated in the tens of billions.
“I’m a small business owner” and a “normal guy,” the man known in crypto circles as “CZ” told AFP in 2022, comparing himself to Elon Musk, whose takeover of Twitter (now X) Zhao later supported with $500 million.
Yet there was little normal about Zhao’s leadership of Binance, a company that largely monopolized the cryptocurrency trading market before falling foul of a series of charges including sanctions violations and illegal trading.
Zhao, who founded Binance in Shanghai in 2017, emerged as the most visible figure in the cryptocurrency world after his arch-rival Sam Bankman-Fried was arrested in 2022 for masterminding a giant Ponzi scheme.
During his rival’s downfall, Zhao was there to twist the knife, first suggesting that he might buy FTX before publicly retiring.
A year later, it was Zhao’s turn to repent.
He pleaded guilty to violating US lawmoney laundry laws and agreed to resign as CEO of Binance, authorities later announced that the company would pay compensation of $4.3 billion.
True courage?
The legal cases have painted a picture of Zhao as a ruthless operator pursuing growth at all costs.
It was very different from the popular legend he had promoted, which had become almost mythical in cryptographic circles.
Zhao’s early life in China was marked by hardship as his parents were sent to the countryside for a dose of peasant reality, a common punishment for those suspected of having capitalist sympathies during the Cultural Revolution of the 1960s and 1970s.
They emigrated to Canada in the late 1980s, where the young Zhao worked at a McDonald’s and a filling station to help the family survive, according to his account of his life and a 2020 blog on the Binance website.
This instilled “drive, grit and initiative” in the young man and helped create a “cryptocurrency leader,” the Binance blog said.
Zhao’s nomadic childhood has influenced his adult life, which has seen him pop up everywhere from New York to Tokyo.
Official legend has it that he discovered the bitcoin bug during a conversation around a poker table in Shanghai in 2013, giving birth to Binance in the Chinese city a few years later.
Beijing’s crackdown on cryptocurrencies accelerated its departure from China and began its journey across various jurisdictions, creating a number of complicated business structures along its way.
For years, he kept regulators at arm’s length by refusing to commit to a single jurisdiction for Binance’s headquarters, repeatedly saying it was a “complex issue.”
This stance has made him a popular figure among cryptocurrency purists who detest any form of regulation.
‘Good old days’
But the smell of scandal eventually became too strong for US market regulators, who labeled Binance’s compliance regime a “farce” and accused Zhao of orchestrating a “secret plot” to help VIP clients evade the law.
Then the police arrived.
Among other complaints, they accused Binance of failing to stop payments to the Islamic State militant group and other organizations banned in Iran and North Korea.
Unlike Bankman-Fried, Zhao was quick to admit guilt and avoid a high-profile trial.
But prosecutors are asking the Seattle court to give Zhao a three-year prison sentence.
In response to his problems, Zhao returned to his everyman persona.
In March he launched a start-up called Giggle Academy which he said would aim to bring free education to disadvantaged children around the world.
“Boot mode again. Like old times,” he wrote on X in early April, just weeks before the sentencing.
Among the subjects you intend to teach? Blockchain, artificial intelligence and finance.