Changpeng Zhao also known as CZ, has experienced a rollercoaster journey in the world of cryptocurrency. From establishing Binance in 2017 to admitting guilt to money laundering accusations in 2023, CZ has encountered both successes and setbacks. Despite the legal challenges he has encountered, including requiring him to pay $4.3 billion in fines, CZ retains his status as the wealthiest individual in the crypto sphere and ranks among the top 50 wealthiest individuals globally.

The question is, how did this man do it? How did CZ went from flipping burgers in Canadian McDonald's to running a crypto empire worth billions of dollars?

Early Life

Born in 1977 in Jiangsu, China, CZ spent his early years in China before his family made the move to Vancouver, Canada. His father worked as a university instructor before he was branded a "pro-bourgeois intellect" and was exiled to rural areas in China shortly after CZ's birth. During his teenage years in Canada, CZ helped to support his family by holding down a number of service jobs, including working as a fast-food clerk at McDonald's restaurant and a gas station.

CZ pursued his education at McGill University in Montreal, Canada, focusing on computer science. His fascination with computers ignited when his father made a significant investment in a state-of-the-art $7000 286 DOS machine. The exposure to the world of computing piqued his curiosity and set him on a journey of research and discovery. The expensive and complex computer became the trigger for his early engagement with technology, giving him a platform to delve into programming, software creation and the boundless possibilities of the digital realm.

Following that pivotal moment, CZ enthusiasm for computers and technology only intensified, leading him a step closer to the creation of Binance. Upon completing his education, CZ delved into various entrepreneurial ventures, including the development of trading software for renowned entities like the Tokyo Stock Exchange and Bloomberg Terminal from 2001 to 2005. He eventually joined some friends to start an information technology (IT) consulting company, and moved to Singapore to launch Fusion Systems.He also started a few more ventures, including Bijie Tech, which offered cloud-based services to exchanges. While the business grew, China's crackdown on cryptocurrency exchanges in March 2017 prompted Zhao to launch his own crypto exchange.

His first encounter with cryptocurrency was in 2013, when he discovered Bitcoin and its potential to revolutionize banking and create a more inclusive global economy. Intrigued by its decentralized nature, he became a fervent supporter, actively engaging in crypto communities to promote adoption. Zhao's passion for blockchain technology drove his mission to have a substantial impact on the cryptocurrency sector.

Power Crypto Couple

CZ has always been private about his personal life, but it was made known to public that he had a romantic relationship with former Chinese travel television show host and Binance co-founder, Yi He, for several years. Including his previous relationship, CZ now has a total of 3 children. Her role in Binance is somewhat complicated and unknown. Her biography on the company's website says she leads business, marketing, and branding strategy. For years, her official title was Chief Marketing Officer, however she preferred to be called Chief Customer Service Officer.

Binance

Binance was launched in July 2017, only to face China's ban on all crypto exchanges in September of the same year. In response, Zhao opted for a fully remote setup for the company instead of relocating to another country.

Binance rapidly expanded to become one of the largest cryptocurrency exchanges based on daily trade volume. Currently, it operates on a global scale, boasting a daily trading volume of $76 billion and serving 90 million customers worldwide. As the majority stakeholder in Binance Holdings, CZ has witnessed a substantial growth in his net worth. His wealth peaked at nearly $100 billion during the cryptocurrency bull run in 2021. By the end of 2023, his net worth soared by approximately $25 billion, aligning with a period where Bitcoin's value more than doubled.

Trouble In Binanza

Not everything went smoothly for CZ and Binance. Accusations were made that between August 2017 and October 2022, Binance and its founder were engaged in a “calculated and deliberate effort” to operate in the United States without respecting the relevant regulatory standards. The $50 million fine for CZ and $4.3 billion for Binance, agreed with the Department of Justice, culminates a saga of legal battles that have plagued the popular cryptocurrency exchange during that period.

Furthermore, a Reuters investigation in February 2023 unveiled that Binance had undisclosed access to a bank account of its purportedly independent US operator. Internal messages and bank records indicated that the company transferred over $400 million from this account to a firm controlled by CZ during the initial months of 2021. A few months later, sources warned that Binance was failing to segregate its funds from those of its customers, in breach of the US financial regulatory framework that requires customers' money to be kept separate. Unable to independently verify the amounts and frequency of the transers, a source familiar with Binance's financial operations revealed that these transactions, totaling billions of dollars, occurred nearly every day in accounts at Silvergate Bank.

The authorities' growing concern about Binance's operations was evident when the New York State financial regulator urged Paxos, the issuer of BUSD (one of the most popular stablecoins on the market) managed by Binance, to cut all ties with the platform and to stop issuing the token, after finding out that it could not do so in a "secure" manner. To make matters worse, Binance was hit with another lawsuit in June 2023. The SEC alleged a host of securities law violations and accused the crypto exchange of engaging in an "extensive web of deception."

When the charges were announced, SEC chair Gary Gensler commented: "As alleged, Changpeng Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied.They attempted to evade US securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value US customers on their platforms."

By late November of 2023, Binance agreed to pay $4.3 billion in fines and forfeitures to resolve a long-running investigation by the US Department of Justice and other federal entities. CZ admitted to breaching anti-money laundering charges and stepped down as CEO. Subsequently, Richard Teng, Binance's head of regional markets, took over as the new CEO.

Binance was accused by the Department of Justice for helping users bypass sanctions across the world and making it easy for criminals and terrorists to move money. The department commented: "Between August 2017 and April 2022, there were direct transfers of approximately $106 million in bitcoin to Binance.com wallets from Hydra. Hydra was a popular Russian darknet marketplace, frequently utilised by criminals, that facilitated the sale of illegal goods and services.”"I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself," CZ posted on X after resigning.

Despite CZ's resignation, it does not mean he has officially cut all ties with Binance, as he still holds majority of the shares in Binance. However, trouble still follow suit. As of March 2024, CZ was ordered to surrender his Canadian passport to a third-party custodian employed by his lawyers. He isn't able to apply for new passports or travel documents either.

Additionally, Zhao must also remain in the continental US and must inform “Pretrial Services” before any travel. CZ has plans to travel back to the UAE, which is his primary residence with his family, to accompany a undisclosed person in his life for "hospitalization and surgery” purposes and he offered to post his Binance equity as security for his return to the U.S. But his request was later denied. The equity was worth $4.5 billion, based on Binance’s last round of fundraising two years ago.

His lawyers disclosed in a letter to Judge Jones to allow him to travel to Abu Dhabi in January 2024 for a period of one to four weeks, so he could be present for the hospitalization, surgery, and subsequent recovery period of a person whose name is redacted in the letter, as well as details of the medical procedure were also blacked out. The judge stated that CZ's "enormous wealth" made him a significant flight risk, hence, rejecting his request to travel out of the US.

Where is CZ now?

After CZ stepped down, some thought that Binance's reputation would not be able to recover or make a comeback. However, when Richard Teng stepped up as the new CEO, not only did he manage to keep the company afloat but has also led BNB to reach near all-time highs (ATHs).

The resilience of BNB and Binance has allowed CZ to reatain a large portion of his wealth. As of April 2024, his net worth is around $33 billion, according to Forbes. Majority of his wealth is based on his stake in Binance, which is estimated to be 90%, or around $32.5 billion. CZ stands to be the richest person in crypto, nearly three times more wealthy than Coinbase CEO Brian Armstrong, who is the second richest person in crypto. Other names on that list include MicroStratefy chairman Michael Saylor and the Winklevoss twins.

Giggle Academy

Despite criminal sentencing scheduled for April 30th 2024, CZ took on X to announce that he has launched an education-centric project called "Giggle Academy". This seemingly philanthropic effort aims to provide free basic education to children around the worldMany wonder if this new project of his is a publicity stunt as this is not the first time CZ has launched a project post-resignation. Giggle Academy tends to use new techniques, technologies, and other methods to teach while working on no economic model.

The project is not intended to replace existing educational systems but rather focus on reaching children in regions lacking basic education. It aims to address the pressing need for accessible education, particularly in regions such as South Asia, West Asia, and sub-Saharan Africa. It will cover all the core subjects of maths, science, and literature, as well as some more modern subjects for senior levels. These include, perhaps unsurprisingly given its founders background, finance, blockchain, AI, and others. Interestingly, however, there will be no courses on "history, religion, etc." as there is too much "potential debate on a global platform."

Regardless, Giggle Academy will use AI, automation, and even non-fungible tokens (NFTs) to bring a gamified and adaptive curriculum to the next generation.CZ has also expressed a commitment to hiring a small team that will work closely with him, and made the job application link accessible on their website. CZ's reason for creating Giggle Academy, is because, he says, it is the most “impactful thing” he could do with “the next chapter of his life.”

He said: “I could try to help fight corruption, world hunger, climate change, etc. But I have no expertise there. My effectiveness will be low. I believe as more people become better educated, they will indirectly help with these issues.”

Though CZ says there will be no crypto involved, there will be non-fungible tokens (NFTs), which will act as badges that represent how far a student has come.

It has raised eyebrows for many that CZ is launching Giggle Academy just a little over a month before facing a criminal sentencing that could result in an 18-month jail term. With his passports and travel documents confiscated by court order, along with restrictions on leaving the US, the announcement of Giggle Academy has sparked curiosity about his optimistic outlook.

Some may view this move as an attempt to improve his public image before his trial, while skeptics might see it as a strategic maneuver to provide his legal team with additional leverage during the hearing. Nevertheless, now that Giggle Academy is public knowledge and actively recruiting and involving relevant stakeholders, CZ will be under pressure to deliver on the project to avoid further damage to his reputation.

With CZ's sentencing looming, it will be interesting to see what the future for the richest man in crypto has in store.