Perhaps due to the increased risks and severe inflation, the assets of many wealthy people have shrunk significantly. The biggest victim among them is CZ Zhao Changpeng, the founder of Binance.
2021 may be the highlight of Zhao Changpeng. At the beginning of the year, he once had a net worth of nearly 100 billion US dollars, becoming the new richest man in Asia. However, with the cryptocurrency market entering a bear market and Binance encountering various challenges, CZ's net worth has evaporated significantly. In the recently released 2023 Hurun Rich List, Zhao Changpeng ranked 97 with a net worth of 45 billion yuan. In other words, he is now worth less than 7 billion US dollars.
In this way, 2022 to 2023 will definitely be a difficult year for Zhao Changpeng. We can't help but wonder, from the richest Chinese to the 97th, what exactly did Zhao Changpeng go through.
Uncovering CZ’s history of success: from having nothing to ascending to the top.
In 1977, Zhao Changpeng was born in a teacher's family in Lianyungang, Jiangsu. He then followed his father to Canada to study computer science at the prestigious McGill University. After graduation, Zhao Changpeng successfully entered the financial technology industry and became a software developer. In less than 2 years, Zhao Changpeng became an important member of Bloomberg, the world's largest financial information company, and served as a team leader in branches in New Jersey, London and Tokyo, which also shows Zhao Changpeng's excellent business ability.
While working at Bloomberg, Zhao Changpeng gained diverse cross-border work experience. At the same time, he realized the high fees and complicated procedures for cross-border remittances, which laid the groundwork for his subsequent exposure to Bitcoin.
In 2013, Zhao Changpeng learned about Bitcoin from a venture capitalist. The unique encryption, convenience, and liquidity of Bitcoin aroused Zhao Chengpeng's strong interest. After that, he began to get involved in cryptocurrency projects and joined Blockchain.info as the "third founding employee". In 2014, Zhao Changpeng, who had appreciated the unique charm of Bitcoin, sold his house in Shanghai to invest in Bitcoin despite his family's opposition. During this period, he met Xu Mingxing, the founder of OKCoin, and became the technical director of OKCoin, and left a year later.
In 2017, Zhao Changpeng ushered in the most important turning point. In June of that year, Zhao Changpeng officially founded Binance, and in July of the same year, he launched his own blockchain currency - Binance Coin (BNB), with a total issuance of 200 million and a circulation of 100 million.
Binance mainly makes profits by charging fees for platform transactions and withdrawals. The biggest feature of Binance is that it not only supports the trading of mature currencies such as Bitcoin, but also provides a stage for the growth and development of a series of emerging currencies, which is also an important business opportunity for cryptocurrencies. Binance seized the opportunity and grew rapidly, and soon became the mainstay of the cryptocurrency exchange industry.
To join the quality community, please add 3172309138 or xycxh1003, and follow the public account: An Zhiyu's Joy
As of August 28, 2017, the total number of Binance users exceeded 120,000, covering more than 180 countries around the world, with 60,000 daily users and 4,000-6,000 new users per day; by January 2018, in just half a year, the number of registered users of Binance exceeded 6 million, covering more than 180 countries around the world, of which 97% of users were foreign users; by July 2022, the number of Binance users has grown to an astonishing 120 million.
In November 2021, Forbes magazine estimated that Zhao Changpeng's net worth reached 90 billion US dollars, or about 573.3 billion yuan, which is higher than the 424.4 billion yuan of Zhong Shanshan, chairman of Nongfu Spring, and the 382.5 billion yuan of Zhang Yiming, founder of ByteDance. In an instant, Zhao Changpeng became the undisputed "richest Chinese" and was in the limelight.
However, the valuation of crypto assets is highly uncertain. As he himself said, "valuation without liquidity doesn't make much sense." This has been well confirmed now. In this year's Hurun Rich List, Zhong Shanshan topped the list with a net worth of 450 billion yuan, while Zhao Changpeng's ranking dropped to 97.
With constant lawsuits and declining performance, Binance is in trouble because a big tree attracts the wind.
Today, Binance is still a very powerful leading exchange in the industry, but it is undeniable that Binance's influence in the industry is declining.
In March of this year, the U.S. Commodity Futures Trading Commission, or CFTC, filed a lawsuit against Binance and Zhao Changpeng, accusing the company of providing cryptocurrency derivatives, such as futures or options contracts, to U.S. customers without registering as a futures commodity merchant. The Commission accused Zhao Changpeng and his former compliance executives of deliberately evading U.S. laws "while implementing a calculated regulatory arbitrage strategy for commercial gain." The lawsuit also alleges that for most of the time, Binance did not require its customers to provide any identity verification information before trading on the platform, despite its legal obligation. In addition, Binance also failed to implement basic compliance procedures designed to prevent and detect terrorist financing and money laundering.
In response to this, Zhao Changpeng made a statement. He said, "Although we have cooperated with the CFTC for more than two years, the CFTC filed an unexpected and disappointing civil complaint. After preliminary review, the complaint appears to contain an incomplete statement of facts, and we disagree with the characterization of many of the issues alleged in the complaint."
What followed was the highlight of June. On June 5, local time, the U.S. Securities and Exchange Commission, also known as the SEC, filed 13 charges against Binance and its founder Zhao Changpeng, including operating an unregistered exchange broker-dealer and clearing agency; providing false trading control and supervision statements on the Binance.US platform; and offering and selling securities without registration. In this 136-page document, the U.S. Securities and Exchange Commission filed 13 charges against Binance.
The SEC alleges that Zhao Changpeng and Binance exercised control over the assets of platform customers, mixing or transferring customer assets at will, including to an entity called Sigma Chain owned and controlled by Zhao Changpeng, which engaged in manipulative trading and artificially inflated the platform's trading volume. In addition, Binance mixed billions of dollars of customer funds and secretly transferred them to another company, Merit Peak Limited, which is also controlled by Binance founder Zhao Changpeng. The SEC also stated that Zhao Changpeng and Binance created BAM Management and BAM Trading in September 2019, claiming that BAM Trading independently operated the Binance.US platform for use by U.S. customers in order to comply with U.S. regulatory requirements. In reality, however, Zhao Changpeng instructed Binance to allow and conceal many high-net-worth U.S. customers to continue to access the Binance global exchange platform.
As for the details and causes and consequences behind this matter, we have already sorted them out in detail when we analyzed the complex relationship between Zhao Changpeng, SBF and the Chairman of the SEC. Those who are interested can review it.
In short, just halfway through 2023, Binance and Zhao Changpeng have been bombarded by major US regulatory agencies. It is indeed a bad year. And we all know that the cryptocurrency circle has always been a domino effect. As soon as the SEC's accusation against Binance was exposed, the cryptocurrency market fell. Not only did Bitcoin fall below the $26,000 mark, but BNB also fell by more than 9% that day. Since then, BNB's performance has been sluggish, and there has been no chance to rise or counterattack.
Once upon a time, Binance was the undisputed largest cryptocurrency exchange, with a size and trading volume ten times larger than the second largest exchange. But now, this gap is gradually narrowing. According to inquiries from multiple data websites, the 24-hour trading volume between Binance and the second largest exchange has shrunk to just over 2 times. In other words, Binance's assets have shrunk by nearly 90% from more than 70 billion US dollars in reserves to only 7.357 billion US dollars today.
At this stage, Binance has attracted worldwide attention. It was initially based on the Chinese market, and then turned to the expansion of the European and American markets after 2020. However, with the intensification of US regulation, Binance's US business has been greatly affected, and Binance US's market performance has almost returned to zero, which has also dealt a heavy blow to Binance's overall business. In this case, Binance's future path is indeed full of challenges, and it needs to find room for survival and development in a strict regulatory environment.
As the founder of Binance, Changpeng Zhao has experienced many ups and downs of the company. He knows that only by continuous efforts and adaptation to changes can Binance remain competitive in a complex and changing market environment. His famous saying "if you can't hold you won't be rich" reflects his confidence and determination for the future development of the industry. Although facing many difficulties at present, Changpeng Zhao and his team are still looking for new market opportunities and looking forward to the next rise. In the context of the ever-changing global cryptocurrency market, Binance will need to continue to innovate and adapt to the new regulatory environment to maintain its market position and continue to develop.
