“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great.”
Changpeng Zhao, better known as “CZ,” is the founder and CEO of the cryptocurrency exchange Binance. He was born in the Chinese province of Jiangsu in 1977 but moved to Canada at 12 years old. In his teens, Zhao worked at McDonald’s and a service station to support his family. He later went on to study computer science at Montreal’s McGill University before going on to develop trading software for the likes of the Tokyo Stock Exchange and Bloomberg Terminal. He got his start in the crypto industry in 2013 on the development team for the Bitcoin blockchain explorer Blockchain.com and was also the chief technology officer of the cryptocurrency exchange Okcoin.
Binance was founded in 2017 and has since become a massive player in the crypto space, not only processing the lion’s share of exchange volume but also launching blockchains, creating a nonfungible token marketplace and offering crypto custody solutions, among other ventures.
CZ arguably made the biggest waves in 2022 with his Nov. 6 announcement that Binance would sell nearly $600 million worth of FTX Token after catching wind of the financial situation behind FTX and Alameda Research. The move is believed to have kicked off the bank run on FTX, leading to a liquidity crisis that eventually led to the exchange’s collapse. CZ has denied that he intended to cause FTX’s collapse, saying “no one won” with the bankruptcy of Binance’s peer exchange. The FTX fiasco saw CZ and Binance later leading the charge for exchanges to issue proofs of reserves, a way of verifying its crypto holdings.
2022 also saw CZ unveil Binance’s many expansion plans, such as diversifying its revenue streams by buying up companies “in every economic sector and try[ing] to bring them into crypto.” Making Bloomberg’s list as the world’s richest crypto billionaire in 2022, CZ used his reported $96 billion net worth to pitch in $200 million to media outlet Forbes to boost crypto education. He also wired Elon Musk $500 million for his takeover of Twitter, saying the platform is important for free speech.
It wasn’t all roses for the Binance boss. Reuters outlined serious allegations against the exchange in two investigations, claiming that CZ denied regulators’ requests for financial and corporate structure information on Binance, avoided proper user background checks, and processed around $2.3 billion in transactions originating from hacks, investment frauds and narcotics sales between 2017 and 2021. Binance labeled the allegations as misinformation. The U.S. Securities and Exchange Commission also opened a probe in June 2022 into whether Binance broke securities laws over the launch of its token in July 2017.
What’s on the cards for CZ in 2023? A good guess might be that Binance continues its global expansion, opening entities in new markets, investing in non-crypto firms and providing new crypto-related offerings to cement its top spot. Any growth would, of course, see Binance subject to more regulatory scrutiny in the jurisdictions it operates, especially with many governments on the path to implementing legal frameworks for crypto — notably, the U.S. and European Union.
It’s impossible to predict if 2023 will be the year the officially headquarters-less Binance finally settles on a home jurisdiction. Equally as challenging is to speculate where that headquarters could be. The exchange has “offices” around the world, and CZ seemingly isn’t in a rush to give the massive organization an HQ. Potentially, CZ is correct to say that no one won from the FTX collapse, as it sparked worries surrounding centralized platforms in crypto. CZ had to deal with tough questions surrounding Binance’s own liquidity at the tail end of 2022. If uncertainty continues into this year, it could trigger centralized exchange users to leave such platforms simply due to prevailing fears and opt for self-custody instead.
