Binance Founder Changpeng ‘CZ’ Zhao Wants To ‘Rebuild’ Cryptocurrency After FTX Collapse

Hong Kong
CNN Business

Binance founder and CEO Changpeng Zhao is once again in the global spotlight, this time as cryptocurrency’s self-appointed white knight as the industry is in crisis.

A Canadian billionaire made headlines this week for offering to come to the aid of cash-strapped entrepreneurs to help “rebuild” the sector.

Zhao, whose initials are “CZ,” made the remarks days after he scrapped a bid to rescue FTX, one of the biggest firms in the space. The company went bankrupt two days later.

Zhao announced on Monday that to mitigate further damage from the FTX collapse, his team would create “an industry recovery fund to help projects that are otherwise strong but in liquidity crisis.”

Binance, the world’s largest cryptocurrency exchange, will welcome other industry players who want to participate as cash investors. he said on Twitter.

“Crypto is not going away. We are still here,” Zhao added. “Let’s rebuild.”

Zhao launched Binance in China in July 2017 and gradually built it into the world’s largest cryptocurrency exchange.

In September of that year, according to a company blog, most of its employees left the country after the Chinese government issued a memorandum banning cryptocurrency exchanges. Zhao said this was before “Binance was properly established” or brought into the country.

Four years later, in September 2021, Chinese authorities outlawed all cryptocurrency-related business activities and vowed to stop illegal activities related to digital currencies.

According to the company’s blog posts, Zhao was born in China, lived in the central province of Anhui and immigrated to Canada in 1989 with his mother when he was 12 years old. He described waiting three days in front of the Canadian embassy for a visa. it rotates with its family at night to keep its place.

Zhao spent his teenage years in Vancouver and previously worked at McDonald’s to support his family.

After studying computer science at McGill University, he worked on trading software for the Tokyo Stock Exchange and Bloomberg.

“He learned about bitcoin during a poker game in 2013 and decided to dedicate his life to cryptocurrency,” Binance said. “He even sold his apartment to buy bitcoins.”

The road to success was not easy.

Like other exchanges, Binance has faced significant regulatory hurdles around the world in recent years, including a ban in the UK and other restrictions in countries including Canada.

The company is also on the investor alert list in Singapore central bank warned that it is not licensed or regulated locally.

Last week, Zhao addressed speculation about the company’s status in the city. writes on Twitter Binance “isn’t banned, it just doesn’t have a license yet.”

Zhao talked about some of the company’s challenges, saying that as a Chinese-born business leader, he faced undue suspicion.

“The bottom line is that we are secretly in the pocket of the Chinese government because we have ethnic Chinese employees and maybe because I am ethnic Chinese. We are easy targets for special interests, the media and even politicians who hate our industry,” he wrote in a recent blog post.

“I am a Canadian citizen.”

As of September, Binance has subsidiaries in countries including Spain, Italy, France, Bahrain and the United Arab Emirates, Zhao added.

Zhao attracted attention earlier this year as he became one of the richest people in the world.

In January, his estimated net worth reached at least $96 billion, putting him ahead of the likes of Oracle ( ORCL ) founder Larry Ellison and surpassing Indian tycoon Mukesh Ambani.

His projected wealth has since fallen to $16.9 billion, according to the Bloomberg Billionaires Index, due to the fall in the value of cryptocurrencies.

A Binance spokesperson previously told CNN Business that “CZ, like other entrepreneurs and founders, intends to give away most of his wealth, even 99% of his wealth.”

Zhao was under pressure to step up as one of the last few titans standing amid the industry’s worst turmoil.

The sector is currently in the middle of a so-called The “crypto winter” caused by the collapse of TerraUSD, an algorithmic stablecoin, a type of cryptocurrency that is supposed to be pegged one-to-one with the US dollar.

In May, TerraUSD lost its dollar peg, causing its sister token to collapse, ultimately creating a major global liquidity crisis in the crypto industry.

Last week, he offered a lifeline to his 30-year-old rival, Sam Bankman-Fried, who heads FTX, one of the industry’s top players.

The head of Binance said that his firm was asked to help FTX struggle with liquidity problems. In response, Binance announced that it would acquire its smaller competitor.

But in a dizzying sequence of events, Binance pulled out almost immediately after reviewing FTX’s finances, saying it concluded the company’s problems were “beyond our control or ability to help.”

The deal quickly fell apart, paving the way for FTX’s bankruptcy and Bankman-Fried’s resignation.

The news marked a stunning fall from grace for one of the industry’s most respected entrepreneurs, who himself was billed as the savior of cryptocurrency after working to keep a number of industry players afloat in a series of similar deals this year.

Since the trading halt, Zhao has been candid about the sector’s remaining challenges.

Speaking in Indonesia on Friday, he urged regulators to move beyond anti-money laundering and customer identification rules to focus instead on the operations, business models and stocks of exchanges like FTX.

Comparing the current crypto chaos to the 2008 global financial crisis is “probably an accurate analogy,” he said.

“This is devastating for the industry. A lot of consumer confidence is being shaken,” Zhao said. “We’ve gone back a few years.”

In separate appearances in Indonesia on Monday, Zhao doubled down on his call for more regulation.

He said that “there are many risks”. “We’ve seen things get crazy in the industry in the last week, so we need some regulation, we need to get it right.”

— CNN’s Matt Egan contributed to this report.

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