Two days ago, I had never heard of Changpeng Zhao.
It’s a brave admission from a business writer, but I’m guessing that many of you were also unfamiliar with the man known as CZ. This will no longer be the case as the world’s media turns its attention to a new multi- billionaire.
On January 10, Bloomberg calculated CZ’s net worth as $96 billion, ranking him the 11th wealthiest person globally.
His true wealth is far higher than even that estimate, as it doesn’t include CZ’s personal holdings of Bitcoin or Binance. Including those investments, CZ could be worth as much as $135 billion– placing him on par with Bill Gates.
CZ was born in China’s Jiangsu province.
His father was exiled to the countryside during the Cultural Revolution — just like Zhong’s parents were — and they eventually moved to Canada when CZ was 12.
Jack Ma started as an English teacher. Zhong dropped out of school at the age of 12 and pursued odd jobs for ten years. CZ started his entrepreneurial journey at Mcdonald’s. He worked first as a burger cook at McDonald’s before working night shifts at a gas station. He was required to work to help support his family — and provide writers in the future a hook for their headlines.
CZ studied computer science at McGill University in Montreal and, after graduating, worked developing trading platforms for the Tokyo Stock Exchange and Bloomberg’s Tradebook.
His coding and trading genius were evident, and he quickly rose through the ranks. By the time he was 27, he was managing large teams across three continents.
However, despite his quick success, CZ felt underappreciated and moved to Shanghai to start his own business — Fusion Systems.
CZ’s story could have ended there.
Fusion Systems ran some of the fastest high-frequency trading systems for brokers globally, and CZ was a wealthy man. Perhaps not ‘Top 10 in the world wealthy let’s write an article on him’, but very successful nonetheless.
His destiny changed over a poker game in Shanghai in 2013.
Many fortunes have been won and lost in a game of poker. However, I’m willing to bet — pardon the pun — that few have come close to what CZ won that night. He was playing with the CEO of Bitcoin China, Bobby Lee, who convinced CZ to invest 10% of his net worth in Bitcoin.
CZ has attributed that poker game to changing his life forever.
After some research, CZ took the plunge and “decided to go all-in on crypto by dedicating his life to it.” He sold his apartment in Shanghai for Bitcoin and took a job as a technology leader at crypto wallet provider Blockchain — he was their third employee. He moved from Blockchain to the position of Chief Technology Officer at the crypto marketplace OKCoin.
After four years working in crypto, it was time to start his own company again. He built his own crypto exchange utilizing the tech performance of the trading platforms he had developed in the past.
Binance launched in 2017 on the back of a $15 million initial coin offering. Due to its speed, reliability, and 50% discount on trading fees, users quickly took to the exchange.
Within eight months, Binance was the world’s largest cryptocurrency exchange, and CZ was on the cover of Forbes Magazine alongside the headline, Crypto Overlord From Zero to Billionaire in 6 Months.
“Seven months ago, Binance didn’t exist. Since then, its 1.4 million transactions-per-second capability have attracted 6 million users, making it the world’s largest crypto-exchange,” the article raved as it fawned over its new hero.
A crypto star was born.
CZ believes the founders and leaders of businesses should be loyal for life.
He wanted to ensure that he and key Binance team members were fully committed to their projects.
There was nothing unusual in that, except CZ took it one step further — getting the company’s logo tattooed on his arm. He explained the decision in a blog post explaining the reason for his tattoo and even suggested that potential Binance employees should consider inking themselves.
It’s a key thing we look for. Now a simple question would do. Imagine if, on our listing application, we added a question:
“Are you committed enough to your project that you are willing to tattoo your logo?”
Or more simply:
“As a founder, have you tattooed your logo on your body yet?”
Savage, I know. But I do believe strongly that founders should be fully committed to their project before they do an ICO.
I’ve heard of companies trying to extract every last drop of blood from their employees — this seems even more extreme. I imagine it would also make it harder for employees to resign.
Like many Chinese entrepreneurs, CZ has fallen afoul of the Chinese government.
Binance was banished from China in a crypto crackdown and has since attracted regulatory interest worldwide. The U.S. Department of Justice and Internal Revenue Service are investigating Binance Holdings Ltd on alleged money laundering and tax evasion. In addition, the Commodity Futures Trading Commission is investigating possible market manipulation and insider trading.
Over in the United Kingdom, the Financial Conduct Authority ordered Binance to stop all regulated activity in the United Kingdom in June 2021. It has also been investigated in Japan, Canada, and Germany.
Binance’s global headquarters are currently listed as the Cayman Islands and Seychelles.
CZ seems unfazed by the multiple investigations and lack of a corporate “home.”
“I’m not an anarchist. I don’t believe human civilization is advanced enough to live in a world without rules.”
In July 2021, he wrote about the need for better compliance.
“Binance has grown very quickly, and we haven’t always got everything exactly right, but we are learning and improving every day. We hope to clarify and reiterate our commitment to partner with regulators and that we are proactively hiring more talent, putting in place more systems and processes to protect our users.”
CZ still lives a reasonably modest lifestyle despite his enormous wealth — at least by billionaire standards. And like Bill Gates and Warren Buffett, who started the Giving Pledge, CZ has vowed to give away most of his wealth.
“Personally, I’m financially free. I don’t need a lot of money, and I can maintain my lifestyle in this way. I do intend to give away most of my wealth like many wealthy entrepreneurs or founders did from Rockefeller until today. I do intend to give away 90%, 95%, or 99% of my wealth.”
Unlike most people who have invested in crypto, CZ has made his wealth on the back of building a business. He wasn’t just an early investor in Bitcoin; he spent time working in the industry and developing a company that could leverage the growing industry.
He is a builder and not just an investor.
According to Bloomberg, Binance generated at least $20 billion of revenue in 2021. To put that into perspective, it is triple what Wall Street analysts expect Coinbase Global Inc. will earn for 2021. And Coinbase is a publicly-traded firm with a market value of $50 billion.
The amount of transactions is staggering; recently, they completed $170 billion of transactions in one day. Again as a source of comparison, let’s look at Amazon. In 2021 on Amazon Prime Day, they did $11 billion worth of sales.
The figures are astounding and account for the exponential growth in CZ’s net worth.
But there is one crucial question.
“Crypto is still in its growth stage. It is susceptible to higher levels of volatility. Any number you hear one day will be different from a number you hear the next day,” Chengpeng Zhao.
I’ll make a confession.
As I’ve made it before, it’s not a new confession — I know very little about cryptocurrency. Sure, I’ve researched and read the headline-grabbing articles about the crypto rollercoaster, but I am far from an expert.
On January 1 this year, Bitcoin was approximately US$47,000 and one week later was US$40,672 after dropping below $40,000. It is too volatile for many investors.
I’ve been an entrepreneur — started several businesses, and invested heavily into the sharemarket, but for some reason, whenever I go to dip my toe in the crypto waters, I back out.
I keep asking whether the crypto bubble will continue to rise or will it burst spectacularly? The added threat for Binance is the ongoing investigations and the urgent need to put in place better compliance systems.
It all makes for an interesting future for Changpeng Zhao. He could continue his rapid ascent and reach the upper billionaire echelons of Musk and Bezos — or he could crash down and feature in a whatever happened to article next year.
Whatever happens, he will always have a tattoo to remind him on Binance.
Come and join all the cool people on my free mailing list to get more stories and updates if you enjoyed this. And if you haven’t signed up for Medium, you can support other writers and me by joining here.
Author: Ash Jurberg