Note: On April 24, the U.S. Department of Justice stated that Binance founder and former CEO Zhao Changpeng should serve three years (36 months) in prison. According to the reasons given, U.S. Department of Justice lawyers believe that Zhao Changpeng helped Binance violate federal sanctions and money laundering laws, and said that he must pay a greater price, so his sentence should be increased.
Just before the trial, CZ apologized for his "bad decision" in a letter to Judge Richard A. Jones, who was presiding over the case, and acknowledged that he took full responsibility for his actions.
In addition to CZ's apology letter, there are 161 letters of support from his family, friends and others, which restore the real CZ Zhao Changpeng from different angles. CZ's sister, Jessica Zhao, former managing director of Morgan, said that although her brother made mistakes, he tried to help others in his life. At the same time, she mentioned the FTX incident and emphasized that CZ ensured that Binance never abused any customer funds. Zhao Changpeng's children, Rachel and Ryan, who are studying in American universities, hope that the judge should not define Zhao Changpeng's personality only through this incident.
Among them, the most special letter came from He Yi, the co-founder of Binance and the mother of three children. She wrote in the letter:
“If the cryptocurrency industry is the Wild West, then CZ is the keeper of the wilderness.”
“For CZ, whether he is rich or poor, he takes charity seriously and takes social responsibility because he is kind and has a humanitarian spirit.”
Finally, He Yi said, "Today, it was his sense of responsibility that made him choose to face the trial, but he should never be considered the same as those evil murderers, robbers, and fraudsters. I sincerely hope that Judge Jones can open God's eyes, be omniscient, and make a fair judgment after seeing a more complete CZ."
The following is the full text of He Yi's letter: Dear Judge Jones:
Thank you for taking the time to read this letter. I am the working partner of Changpeng Zhao (abbreviated as CZ) and the mother of his three children. I hope this letter can help Mr. Judge understand a more real Changpeng Zhao.
In the spring of 2014, I met Zhao Changpeng at a school blockchain public event. Everyone called him CZ. Unlike the anonymous name used by many people, this is the initials of his real name. CZ was immediately invited to the stage to share impromptu after arriving that day because the organizers found out that he worked for the most popular Bitcoin wallet at the time (blockchain.info). He enthusiastically explained blockchain technology and Bitcoin principles to everyone. At that time, he had just sold his house to buy Bitcoin. Due to the decline in Bitcoin prices, his assets shrank significantly, but this did not hit his obsession with blockchain technology. His speech was full of idealism about how blockchain technology can bring positive changes to the world, which also greatly influenced and inspired me. Later, CZ chose to get involved in the encryption field and founded Binance. He certainly hopes that the company will succeed, but he is not a person who takes making money as the ultimate goal. He sincerely hopes to use technology to promote the progress of the world.
In the summer of 2014, CZ’s years of accumulated matchmaking and trading technology background could not be fully utilized in Blockchain. After I invited him many times, he joined OKCoin, the crypto trading platform where I worked. At that time, the cryptocurrency circle had entered a downward cycle. Amid the wailing of the industry, a community member unfortunately suffered from leukemia. He could not afford his medical expenses, so he publicly launched a fundraising campaign. CZ actively participated in the donation even though his personal assets had shrunk greatly, but unfortunately, this community member still died in the end. Inspired by this incident, CZ and I jointly launched the "Love BTC" charity project. He built a website and a public Bitcoin wallet address. We raised funds through social media auctions of clothing, etc., and then directly exchanged BTC for goods to the beneficiaries. For this purpose, CZ also wrote a paper on how blockchain technology can achieve 100% transparent charity, ensure that the final beneficiaries receive 100% of the benefits, and ensure that no donations are eroded by middleman management fees. This paper can be found on Github, with a timestamp of April 2014
(https://github.com/cpzhao/bitcoin_charity/blob/master/Bitcoin_Charity.md), which is the predecessor of Binance Charity.
This was three years before Binance was founded, when CZ was not rich. Many people think that charity is just for fame, some use it as a means to offset taxes, and some say they will do charity when they are financially independent. But for CZ, whether he is poor or rich, he takes charity seriously and assumes social responsibility because he is kind and has a humanitarian spirit.
In August 2017, my first month in Binance, a young user came to me and said that he had transferred thousands of dollars to Binance’s wallet address, but Binance did not support this token, so Binance could not receive the token; this was a very common mistake in the early days of the industry.
According to the industry practice at the time, you have to take responsibility for your own mistakes. However, for this kid in his early 20s, those thousands of dollars might be his family's annual income, his annual college tuition, and his hope for the future. After a brief discussion between me and CZ, he mobilized our limited development resources and quickly helped the user recover the assets. This was the first case in the industry to help users recover assets from the wrong address. With the first time, there will be countless times later. Under CZ's guidance, Binance has helped more than 180,000 users recover assets with a total value of more than 441 million US dollars. This is a project that consumes a lot of resources and is not worth doing in terms of ROI, but we can ignite hope for our users in despair. To this day, publicly listed trading platforms such as Coinbase still do not support this service. In this emerging Wild West, countless practitioners play the role of predators, and CZ has always insisted that we should do the right thing: protect users.
At the beginning of 2018, the price of Bitcoin rose to more than $20,000, and the enthusiasm of investors also spawned a large number of frauds. One day, a group of Chinese users came to me and pointed out that they were lured by an account on social media to invest in a project. After transferring the money, the person disappeared, but according to the public on-chain information tracking, the money had just been transferred to Binance. According to the law enforcement process of most platforms today, users need to find the police first and report the police, and the police can only freeze the money after providing a letter of cooperation. At that time, China banned cryptocurrency transactions, and the Chinese police did not handle such cases. CZ said to us: "Do the right thing", we temporarily froze the stolen money, and then organized multiple calls between the victims and the scammers. In the end, the scammers returned the money to the users, and the scammers also closed their accounts. This is just one of countless examples of CZ's persistence in cracking down on evildoers. In the past 2023, Binance cooperated with law enforcement agencies in various countries in more than 58,000 case investigations, many of which were initiated by Binance to promote law enforcement agencies. This is why even though the mainstream media tries to portray CZ as an evil villain, millions of community users and ordinary people regard him as a hero in the industry, because CZ has always insisted on justice. If the cryptocurrency industry is compared to the Wild West, then CZ is the guardian of this wilderness.
Starting in 2019, the company's staff began to grow rapidly, and the team composition is very global and full of diversity. During this period, there are Wall Street elites who graduated from Ivy League schools, dropouts from Europe, female NGO fighters active on the front line in Africa, and young men in rural Southeast Asia who do not want to be fishermen. It can be said that CZ really treats everyone equally regardless of race, belief, gender, education, or family background. Whether it is a junior employee's house in Southeast Asia destroyed by a fire, or Covid sweeping the world causing employees to lack epidemic prevention supplies, or even the war between Russia and Ukraine posing a danger to employees, CZ helps employees regardless of cost. For a company boss, it is not uncommon to spend millions of dollars to help scarce talents in distress lead their families away from an unstable living environment and continue to pay allowances. When CZ made these decisions, he did not consider their background or job level, which also covered a large number of junior employees who were just starting out. These employees are generally easy to find replacements, but there is only one reason for CZ's decision: they need support.
CZ’s leadership style may not conform to traditional expectations of a good CEO. His commitment to transparency and fairness at Binance often clashes with the power expectations of a small group of employees accustomed to a meritocratic corporate environment. This has led to some employees leaving the company in anger and making false accusations to the media. While these reports sometimes frustrate me, CZ has shouldered this burden and continues to support fairness and equality because he understands that true fairness is sometimes unfair to the privileged few.
On a weekend in November 2022, FTX was facing a crisis, and Sam (SBF) made his last call for help to CZ. Before getting any valid reports and documents from SBF, CZ convened a management meeting to decide whether to rescue FTX. He said: "We don't need FTX as a company. We save FTX to save the industry. We should save FTX." Although he eventually gave up the deal, subsequent public information showed that multiple companies associated with FTX were misappropriating user assets, which stunned CZ. CZ believes that transparency is a better solution, so he disclosed the wallet address of Binance's trading platform, and launched products that allow users to verify their account funds and online wallet addresses to demonstrate Binance's transparency, which further promotes industry self-discipline.
So far, CZ and I have experienced ten years of ups and downs in this industry. These ten years have been a decade of dramatic changes in the industry. In these ten years, Bitcoin has risen from a low of hundreds of dollars to more than 40,000 US dollars now. We have seen countless former celebrities lose their reputations and countless well-known institutions collapse in an instant. Most of the time, these people are self-proclaimed smart and talented, but they regard the law as nothing, thinking that they can deceive the public or get away with it. But CZ is not: he is upright, kind, sincere, smart and very, very hardworking; CZ underwent two spinal surgeries in 2020 alone due to work reasons, and he did not stop working for a day even if he was repeatedly lying in bed for 18 months. In the past six years, as CEO and the largest shareholder, he has received a salary lower than that of multiple executives introduced by the company later, and has not made a single dividend or cash out for himself. This time, in order to keep Binance running, he chose to fly to the United States to plead guilty; between personal interests and public interests, CZ always chooses to sacrifice himself to achieve Binance, and when between Binance and users, he will choose users.
As a partner of CZ, I know clearly how CZ won the respect of the community; it may be when the Chinese government banned Bitcoin trading platforms and other project parties took the opportunity to make a fortune, CZ chose to clear out users at a higher price; it may also be that Binance was stolen, and CZ was the first to disclose the information and take full responsibility; it may also be that when countless project parties issued coins just to sell coins to get rich, CZ was helping users track down scammers and hackers in the industry, and some cases even had nothing to do with Binance, just because of his sense of mission and responsibility for the industry.
As CZ's life partner, I have known CZ for nearly ten years, so I know his unknown side better. He knows nothing about the jewelry, luxury goods, luxury cars, and art auctions that the rich are keen on. He lives a simple life. He buys affordable clothes on Amazon, he rides a balance bike to meetings, he enthusiastically showed his Toyota 6-seater van to reporters and was later publicly ridiculed by reporters. He buys things out of efficiency and interest, he has no fanatical desire for money, fame, and enjoyment, and he hopes to live a meaningful life.
At the same time, he always tries to be considerate of his friends, regardless of their occupations and social status: he also tries to take time out of his busy work schedule to maintain high-quality interactions with his three young children, who are very close to him and now always ask: Why is Daddy not home? When can Daddy come back?
Of course, I am not saying that CZ did not make mistakes, but his biggest mistake was ignorance. As a startup without a fancy background, the founding team members had no legal background, and even most of the early management team members, except CZ, could not even read English, such as myself. In the absence of experience and legal knowledge, CZ won users with fairness, integrity and sense of responsibility to the industry, but also made mistakes. In any case, the mistakes have been made, and both Binance and CZ have paid a huge price.
CZ once said: "No one wants to be a hero, because no one is born to rush to the front to block the arrows. Heroes are just in that position to protect their families, communities, ethnic groups, and countries to do the right thing, and they have to become heroes in the process."
I humbly hope that Judge Jones can take into account that in the early and chaotic cryptocurrency industry, there is no consensus on how to regulate the industry and how to define the United States. As a founder who has never managed a company of this size, he will definitely encounter blind spots. If CZ knew the severity of the matter, he would have been on guard from day one and blocked any American users. He does not want to be a hero, and certainly has no intention of becoming a criminal. All his actions follow universal humanitarian principles and he does his best.
Today, it is his sense of responsibility that made him choose to face the trial, but he should never be considered the same as those evil murderers, robbers, and fraudsters. I sincerely hope that Judge Jones can open God's eyes, be omniscient, and make a fair judgment after seeing a more complete CZ. If necessary, you can contact me at any time to get more details.
