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Changpeng Zhao, a just announced he’s buying his biggest competitor in the crypto world

  • Changpeng Zhao, also known as CZ, is the richest person in cryptocurrency.
  • Binance was founded by the Chinese-born Canadian Mongolian in 2017.
  • On November 8, CZ announced that Binance would buy its largest competitor, FTX.

Changpeng Zhao is the founder and CEO of Binance, the world’s largest cryptocurrency exchange.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Changpeng Zhao, CEO of Binance. 
Antonio Masiello/Getty Images

Zhao – often known as CZ – is one of the most prominent people in the cryptocurrency space, as well as the richest person in the industry.

His net worth is $16.4 billion as of November 9, and he is the 87th richest person in the world, according to the Bloomberg Billionaires Index.

But the crypto winter has had a negative impact on the industry, and Zhao is no exception. His estimated real-time net worth is a far cry from his peak personal wealth: He had a net worth of $95.9 billion earlier this year, according to the Bloomberg Billionaires Index.

Zhao’s interest in cryptocurrency began in 2013 when he first learned about Bitcoin, according to a 2018 Forbes report. His career in the emerging digital currency industry began at Blockchain.info, where he served as head of development.

Zhao founded Binance in 2017 and backed it to become the largest cryptocurrency exchange by trading volume. The exchange handles about $76 billion in daily trading volume, according to the protocol. In 2021 alone, Binance generated more than $20 billion in revenue, according to Bloomberg. Binance’s platform is larger than its four largest competitors combined, according to Bloomberg.

Zhao was born in a rural village in Jiangsu Province, China, in 1977 to a family of teachers.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Nanjing, Suzhou, China. 
Fang Daqing/VCG/Getty Images

Zhao, a Chinese Canadian, moved to Vancouver in the late 1980s with his family, according to Forbes magazine.

Zhao’s father, Shengkai, was a professor who was exiled to the countryside during China’s Cultural Revolution, Maclean reports.

Zhao said in a blog post in September that his family had to wait in line outside the Canadian embassy for three days to get the visas. “He was lucky to be able to leave at that time,” he added.

Shengkai immigrated to Canada to earn a Ph.D. from the University of British Columbia, according to MacLean. After the Tiananmen Square protests in 1989, Zhao and his family followed his father and moved to Vancouver.

Zhao said he experienced food rationing while growing up in rural China. “You get a ticket to buy meat,” Zhao told Fortune in an interview in March. Zhao told Maclean’s that he only drank fresh milk after he moved to Canada, because it was very rare to find in China.

When Chow moved to Canada, he held a number of part-time jobs, MacLean reports.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
McDonald’s in Richmond, BC, Canada. 
Cheng Feng Chiang/iStock/Getty Images

He started working at McDonald’s when he was 14 and worked there for two years, Dewey Mustajab, a spokesperson for Binance.

Chow also worked at a Chevron gas station and as a referee for teenage volleyball games to earn money, both for McLean.

In the blog post, Zhao said moving to Canada “changed my life forever.” He added that he spent his “best years as a teenager” growing up in Vancouver.

Zhao is known to be frugal: he does not own cars, yachts, or luxury watches. Instead, he has digital watches like the Apple Watch, and he recently bought a Toyota Velfire, a respondent said.

Zhao studied computer science at McGill University in Montreal, the same school where his father worked as a visiting scholar.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
McGill University. 
JHVEPhoto/iStock/Getty Images

Zhao’s interest in technology was backed by a US$14,000 DOS computer that his father — a “mathematician and programmer” — bought when Zhao was in his teens, according to MacLean. Before joining McGill, Zhao took coding classes in high school and started coding when he was just 16, according to Bloomberg.

After graduating from college, Zhao first worked on the Tokyo Stock Exchange, and from 2001 to 2005 worked on the Bloomberg Trade Book, a respondent said.

In 2005, Zhao left the life of the company and moved to Shanghai to become a partner in the trade system company Fusion Systems. According to Zhao Linkedin’s page, he left the company in December 2013.

The vast majority of Zhao’s multibillion-dollar fortune comes from his controlling stake in Binance Holdings, according to Bloomberg.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Cryptocurrency exchange Binance founder and CEO Changpeng Zhao speaks at a Binance fifth anniversary event in Paris, France, July 8, 2022. 
Staff/Reuters

While Bloomberg estimates that Zhao is worth about $30.6 billion from his largest stake in the cryptocurrency platform, it’s not a complete picture of his wealth. Bloomberg said it did not directly include the cryptocurrency that Zhao holds in his net worth, because the amount is not publicly available.

Zhao has personal holdings of Bitcoin and Binance Coin cryptocurrencies, according to a September report by Bloomberg. Bloomberg reported, citing an estimate from Zhao, that in 2021, Binance had more than 90 million users.

Zhao is said to have a significant amount of wealth from Bitcoin, having bought $1 million worth of digital currency when it was only $600 per unit, per Maclean’s.

Respondent refused to confirm Zhao’s net worth and source of wealth.

But Zhao’s journey on Binance has been far from a smooth sailing – the company has been embroiled in numerous controversies.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Changpeng Zhao, CEO of Binance. 
REUTERS/Darrin Zammit Lupi

In October, $570 million worth of cryptocurrency circulating on Binance was stolen in a blockchain hack, according to the New York Times. Zhao told CNBC in an interview in October that no users lost money in the attack, and that “the program’s code is never without bugs.” The Binance hack is one of the biggest cryptocurrency hacks ever.

Binance said in a blog post that if a hack occurs in the future, the auditors will decide whether to freeze the hacked funds. The decision will be made through a series of “on-chain governance votes” – the system that manages and implements changes on the blockchain. Binance added that they will also consider implementing a “bug bounty system,” so users are encouraged to report bugs.

“Approximately $570 million was hit and taken by the hacker, the hacker did not recover $100 million and took it off the chain. Neither the users nor the users’ money was affected,” a respondent said.

Binance has also been criticized for its ties to China. Binance delisted only Chinese yuan-based trading pairs on the exchange in 2021, serving clients in China for several years, according to a September article from Brutus. Chinese authorities banned all crypto-related transactions in September 2021.

Zhao responded to the allegations in a blog post published in September, where he explained that Binance had never been incorporated in China and said it “doesn’t operate like a culturally Chinese company.” He added that he was a “term Canadian citizen.”

Binance platform has also sparked controversy over Iran-based users being able to trade cryptocurrency on the exchange despite sanctions imposed by the United States, according to a Reuters report in July. Binance notified traders in Iran to liquidate their accounts in November 2018, but seven traders continued to use the account until September 2021 even after the ban. Binance did not respond to Reuters requests for comment at the time.

Zhao is best known for his rivalry with FTX CEO Sam Bankman-Fried. But in November, FTX experienced what Zhao described as a “liquidity crunch” and decided to buy Binance the exchange.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Zhao Changpeng and Sam Bankman-Fried. 
Horacio Villalobos/CorbisAlex Wong/Getty Images

Binance has signed a non-binding agreement to acquire FTX, Zhao said in a Twitter post on November 8. FTX is the third largest cryptocurrency exchange by trading volume after Binance and Coinbase.

The acquisition comes as a shock to the $1 trillion cryptocurrency industry. It all started with a public brawl on November 6, when Zhao announced on Twitter that Binance would liquidate FTT tokens, the cryptocurrency for FTX.

Bankman-Fried responded via a Twitter post, saying that Zhao was “trying to go after us with false rumours,” and that FTX and its assets were “fine.”

Following the public controversy, $6 billion worth of cryptocurrency has been pulled from FTX, according to Reuters.

Citing Zhao, Reuters said Binance then signed a non-binding agreement to help cover FTX’s “liquidity crunch.”

“This afternoon, FTX asked for our help,” Zhao wrote in his November 8 post. He added that Binance will conduct due diligence as a first step in the acquisition process.

However, the merger will only affect non-US companies on both exchanges, according to CNBC. FTX’s US operations account for only 5% of the exchange’s total revenue.

FTX is also expected to continue operating independently of Binance, CNBC reports.

Respondent said that Zhao currently divides his time between Dubai and France. He previously resided in Singapore.

Changpeng Zhao, a just announced he's buying his biggest competitor in the crypto world
Marina Bay Sands in Singapore. 
Marielle Descalsota/Insider

Zhao moved to Dubai in late 2021, where he rented an office to run what Bloomberg called a “new phase” of Binance. The bulletin said Zhao also owns an apartment and a minibus in the city, the publication reported. 

“I’ve always loved being with diverse cultures,” Zhao told Gulf News in an August interview. He described the city as “very pro-cryptocurrency,” according to a 2021 Bloomberg interview.

Previously, Zhao lived in Singapore from 2019 to 2021. The city-state has spent hundreds of millions of dollars investing in the sector amid a crackdown on industry in the US, UK and China.

Smith

Tricare west is a global news publication that tells the stories you want to know.

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