Who is Binance’s Chanpeng Zhao aka CZ, the latest ‘crypto czar’ to fall from grace

Changpeng Zhao, widely known as CZ, the Founder and CEO of Binance, the world’s largest cryptocurrency exchange, has resigned from his position after pleading guilty to violating US anti-money laundering laws, according to a Reuters report.

The development follows a $4.3 billion settlement deal reached in a Seattle court on November 21, with Zhao agreeing to a personal payout of $50 million, marking one of the largest corporate penalties in US history.

As part of the settlement, Binance is set to pay $1.81 billion within 15 months, followed by another $2.51 billion forfeiture. Despite the significant setback for the cryptocurrency sector, legal experts view the deal as a favourable outcome for Zhao personally, allowing him to retain his wealth and stake in Binance, although, he won’t have any control over the platform.

Binance quickly became the world’s largest cryptocurrency exchange under Zhao’s leadership, making him the richest person in the sector. And with that, CZ developed a cult of personality around him. For his literally followers and staff members, he was nothing short of a rockstar — a recluse but an all-important figure, a supposed maverick and Einstein-like genius in the world of crypto. However, he was not always this rockstar figure. Like most crypto titans, Zhao’s origins in crypto started as a simple guy who was interested in technology and the internet.

Who is CZ?
Born in Jiangsu province, China, Zhao’s life journey has been characterized by resilience and a pursuit of technological innovation.

In 1989, at the age of 12, Zhao’s family moved to Vancouver, Canada, seeking a new life after his father, a university professor, faced challenges during China’s Cultural Revolution. Zhao’s exposure to technology began early, and he later pursued a degree in computer science at McGill University. Soon, Zhao entered the professional field, gaining experience in building trading systems in New York and Tokyo.

Getting into crypto
His foray into the world of cryptocurrency occurred in 2013 during a poker game in Shanghai, where fellow players advised him to invest in Bitcoin. Subsequently, Zhao sold his apartment for Bitcoin, marking the beginning of his deep involvement in the crypto space.

Before founding Binance in 2017, Zhao worked at crypto companies OKCoin and Blockchain.info. Binance, a portmanteau of “binary” and “finance,” swiftly grew to become the largest cryptocurrency exchange globally under Zhao’s leadership. Known for its user-friendly interface and extensive range of supported cryptocurrencies, Binance played a crucial role in shaping the crypto industry.

A crypto giant
Changpeng Zhao’s entrepreneurial vision and strategic leadership made him one of the wealthiest individuals in the cryptocurrency sector. According to the Bloomberg Billionaire Index, at his peak Zhao ranked among the world’s richest people, with a wealth of $23.5 billion.

Fall from grace
Zhao has been associated with a high-profile case involving money laundering allegations. Binance has been under a US Justice Department investigation since 2021, and the US Securities and Exchange Commission filed a separate action against the exchange and CZ earlier this year.

As part of the settlement, Zhao agreed to a personal payout of $50 million and stepped down from his role as CEO. The case stems from Binance’s alleged violations of anti-money laundering regulations, which raised concerns about the exchange’s compliance practices. The settlement represents one of the largest corporate penalties in U.S. history.

Despite the recent challenges, including Zhao’s resignation following a guilty plea related to U.S. anti-money laundering laws and a substantial settlement, his impact on the cryptocurrency landscape remains indelible. Zhao’s journey reflects the transformative power of blockchain technology and the dynamic evolution of the crypto industry over the past decade.

(With input from agencies)