Binance CEO Changpeng “CZ” Zhao has hit back at critics and conspiracy theorists who claim Binance to be a Chinese-based “criminal entity” that “secretly [belongs] in the pocket of the Chinese government.”
CZ’s response to critics came from a Thursday blog post via Binance, and stems from a Twitter spat with a former Washington Post journalist who asked him, “While I have you here, who’s Guangying Chen?”
He explained that the question is in reference to a conspiracy theory alleging that his personal friend and Chinese national Guangying Chen is the secret owner of Bijie Tech (a company he founded in 2015) and possibly also Binance.
However, CZ explains that Chen is a colleague of his that he met through a friend, which he hired to “manage the back office” at Bijie Tech before re-hiring her again at Binance, adding that conspiracy theorists then linked her as a secret owner of the firms given that she was one of the few to have initially remained in China.
Websites such as Scam Binance allege that Chen at one stage owned 93% of the shares in both Bijie Tech and Binance, among other things. CZ stated that such rumors originated from an “old campaign that a competitor launched via an anonymous microsite.”
“As a result, both she and her family have been targeted and harassed by the media and online trolls. Had I known how much of a negative impact this would have on her life, I never would have asked her to do what seemed like such an innocuous step at the time,” he said.
Links to China
CZ also strongly denied the claims that his company has close links to China and its government, and even went as far as discussing some of his troubling personal and business-related experiences with Chinese authorities:
“The greatest challenge that Binance faces today is that we (and every other offshore exchange) have been designated a criminal entity in China. At the same time, our opposition in the west bends over backward to paint us as a ‘Chinese company.’”
CZ is of the view that the ill-intended inferences come from the fact that he, along with a few other Binance employees are of Chinese ethnicity, making Binance “an easy target for special interests, media, and even policymakers that hate our industry.”
“The inference is that because we have ethnically Chinese employees, and perhaps because I am ethnically Chinese, we are secretly in the pocket of the Chinese government,” he said.
Views to that effect have been expressed by the media as recently as of Tuesday, with a Fortune India article describing Binance as a “Chinese-origin[ed] crypto exchange,” which claimed Binance and other Chinese-linked centralized crypto exchanges were “invading” India by freely operating their services within India through illegal means.
Chinese-infiltrated narratives continue to spread despite Binance never being legally incorporated in China and never operating like a Chinese company culturally, said CZ.
CZ added that Binance has subsidiaries in a number of countries, such as France, Spain, Italy, UAE and Bahrain, and has grown a team around the globe, adding that “we are active in pursuing top talent, no matter where they hail from:”
“Over the past two years, as we expanded into Europe and the Middle East and recruited a more senior leadership team, Binance’s executive team is now more heavily dominated by Europeans and Americans.”
“Our broader employee base is even more globally distributed. Despite these facts, some people insist on calling us a ‘Chinese company,’” he added.
Having fled from China to Canada at 12, CZ later returned to start a company in 2015, but was later shut down by the Chinese government:
“Two years before Binance, I started a company called Bijie Tech, providing exchange-as-a-service platforms to other exchanges. We got 30 clients on board, and business was good [...] Unfortunately, in March 2017, the Chinese government shut down all such exchanges. All of our clients went out of business.”
CZ said that he brought a few past Bijie Tech employees in to launch Binance in July 2017. However, the Chinese government again effectively shut it down six weeks later by issuing a memorandum stating that crypto exchanges were not allowed to operate in China, adding:
“They then blocked our platform behind the Great Firewall. At this point, most of our employees left China. Only a small number of customer service agents remained by late 2018.”
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Binance was legally incorporated in Cayman Islands in 2017, but currently has no formalized headquarters.
As of October 2021, Binance had accumulated an estimated 28.6 million crypto users, making it the world’s largest centralized crypto exchange. In November 2021, a former Binance executive said the company is worth over $300 million.