Who is CZ? Changpeng Zhao’s Binance emerges as ultimate white knight
Changpeng ‘CZ’ Zhao, founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, is being viewed as crypto’s white knight after stepping in to acquire FTX following a bailout deal with the cryptocurrency derivatives exchange.
Prior to Binance announcing its acquisition of FTX, Sam Bankman-Fried, CEO of FTX, was labelled crypto’s white knight by Forbes. A white knight is a person who comes to someone’s aid.
The accolade for Bankman-Fried came after FTX successfully bought the assets of bankrupt crypto lender Voyager Digital in September 2022.
It followed numerous rounds of bidding “in a highly competitive auction process” with an FTX bid worth roughly $1.422bn (£1.246bn). At the time, Binance also placed a bid to purchase the assets of Voyager Digital.
Additionally, in June 2022, FTX signed a deal to bail out the crypto bank BlockFi . As well as providing financial assistance to BlockFi with an injection of $250m (£219m), FTX also partnered with the crypto bank.
Bankman-Fried revealed in a series of tweets he chose to financially aid BlockFi because it “has careful risk management and great leadership” and that “sometimes leadership means acting decisively and that’s what BlockFi did”.
He concluded his tweets by adding: “We take our duty seriously to protect the digital asset ecosystem and its customers.”
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Now CZ is the white knight
On 8 November 2022, Binance announced it was buying FTX. Zhao said that FTX had asked it for help due to “a significant liquidity crunch”.
Zhao stated Binance would fully acquire FTX, but not FTX.US. Separately, Bankman-Fried said FTX.US was a separate company and should not be impacted by this.
However, Zhao did add that as part of the deal Binance had the “discretion to pull out from the deal at any time”.
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Who is CZ?
According to a blog post from CZ, he was born in China in 1977. However, when he was 12, CZ and his entire family left China two months after the 1989 Tiananmen Square protests.
Although it usually took four years to obtain a passport and then another three years to get a Canadian visa, the Canadian embassy fast-tracked the family’s visas in the light of Tiananmen Square. Zhao then grew up in Vancouver and went to McGill University in Montreal.
He returned to China in 2005 to launch an IT start-up together with five other expats. Between 2005 and 2015, Zhao tried to set up several different projects before entering the crypto space.
Two years before setting up Binance, he started a company called Bijie Tech, which provided exchange-as-a-service platforms to other exchanges.
Then in 2017, China shut down all exchanges, and Bijie Tech shut down as well. However, Zhao took a few people from Bijie Tech to set up Binance on 14 July 2017. In September 2017, the Chinese government issued a ruling that crypto exchanges were not allowed to operate in China.
The Binance CEO said in his post the irony was not lost on him of being “forced to leave China” once again, 30 years after he fled the country with his family in 1989. After the Chinese government ruling, the Binance leadership team opted to work remotely.
As part of the post, Zhao made it clear that “Binance was never incorporated in China”. He added: “We don’t have any legal entities in China, and we do not have plans to.”
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