Crossing the Digital Storm: The Legend of Zhao Changpeng and Binance

"Those People Taught Me How to Play Chess and How to Think"#

In 1977, in a less noticed corner of Lianyungang, Jiangsu, the story of Zhao Changpeng began. He was born into an ordinary family, with both parents being teachers. However, his father, Zhao Shengkai, a teacher at the University of Science and Technology of China, was labeled as a "capitalist roadist" intellectual during the Cultural Revolution, a label that brought him endless suffering. Forced to leave urban life, he was sent to a remote village, where he experienced the most difficult years of his life.

At that time, rural schools were rudimentary and scarce, with only simple stone tables in the classrooms, which was very common in resource-poor rural areas. In winter, the learning conditions were even harsher. In this environment, Zhao Changpeng not only experienced a life of poverty but also learned to seek the power of knowledge in adversity.

At the age of ten, Zhao Changpeng and his family left the countryside and moved to Hefei, a small city and the location of the University of Science and Technology of China. This new environment was like an oasis of knowledge for Zhao Changpeng. Here, his world began to change. Zhao Changpeng often sat down to listen to debates among older students, discussing topics ranging from campus life to political issues. These older students sometimes taught Zhao Changpeng how to play chess and Go; through these games, Zhao Changpeng not only learned strategy and thinking but also gradually broadened his horizons.

Zhao Changpeng recalled, "Those people taught me how to play chess and how to think. Being with people seven to ten years older than me made my way of thinking different from that of my peers." In such an environment, Zhao Changpeng's way of thinking began to change. He not only learned critical thinking but also how to find his place in a broader world.

In 1984, seeking a better future, Zhao Shengkai left China to pursue a Ph.D. at the University of British Columbia in Canada. Five years later, in 1989, the outbreak of the Tiananmen Square incident made Zhao Shengkai feel the threat of political turmoil once again. For the future of his family, he decided to lead his family to immigrate to Vancouver, Canada, and start a new life. When applying for a visa, Zhao Changpeng recalled, "I remember the line outside the Canadian embassy was three days long. We had to take turns guarding our place in line at night."

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On the campus of the University of British Columbia, Zhao Shengkai continued his academic journey, pursuing a Ph.D. in geophysics. This decision was not only for his academic pursuit but also to provide a better educational environment for his children.

Humble Growth in a Multicultural Environment#

In the multicultural environment of Vancouver, Canada, Zhao Changpeng's adolescence was unique. The high school he attended was a microcosm of racial integration, with students from different cultural and economic backgrounds. Although he was surrounded by many Asian classmates, Zhao Changpeng was one of the few students from mainland China. Most of his classmates came from economically developed Hong Kong and Taiwan, and their lifestyles were significantly different from Zhao Changpeng's.

Zhao Changpeng deeply felt the wealth gap between himself and other students. He recalled that children from Hong Kong pursued brands and fashion, while classmates from Taiwan, although equally affluent, exhibited a more humble attitude. These experiences gave Zhao Changpeng a deeper understanding of different cultures and values, especially the humility he learned from Taiwanese families, which played an important role in his later life and career.

Zhao Changpeng's father, Zhao Shengkai, was his technical and academic mentor. The IBM 286 computer he purchased at great expense was not only a tool for Zhao Shengkai's research but also the starting point for Zhao Changpeng's programming learning. On this computer, Zhao Changpeng not only learned the basics of programming but also sparked his interest in technology, which played a key role in the technical foundation for his future establishment of Binance and the development of trading systems.

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At the same time, Zhao Changpeng's work experience during high school also had a significant impact on shaping his character. He worked not to try new things or meet his parents' expectations but genuinely relied on these part-time jobs to make a living. From working at a Chevron gas station to McDonald's, these experiences not only cultivated his independence but also instilled in him a sense of dedication to work.

Despite later becoming an important figure in the cryptocurrency field, Zhao Changpeng never forgot his beginnings. He openly shares photos of himself working at McDonald's, showcasing his respect for the past and his commitment to humility. This attitude stands in stark contrast to the ostentation and bragging of some in the cryptocurrency world.

During his days in Vancouver, Zhao Changpeng's life, though ordinary, was full of color. As the captain of the volleyball team, he participated in the national math competition in Canada. These experiences not only enriched his high school life but also laid the foundation for his future leadership and problem-solving abilities, earning him the nickname "Champion" (as "Changpeng" sounds similar to "Champion"). This period of life was not only a stage of growth for Zhao Changpeng but also a crucial time for forming his personal values and worldview. In this multicultural context, Zhao Changpeng learned how to find his place in different environments, laying a solid foundation for his future success on the global stage.

Rich Dad, Poor Dad#

In 1995, the young Zhao Changpeng bid farewell to the mild climate of Vancouver and moved to McGill University, 3,000 miles away, stepping into the French-speaking, bitterly cold Montreal. The city's underground tunnels seemed to foreshadow the winding and tortuous path Zhao Changpeng was about to embark on.

At McGill University, Zhao Changpeng's academic life was unremarkable; he switched from a biology major to computer science, a transition from dealing with people to conversing with code. College life seemed to pass quietly, with his free time spent roller-skating and enjoying Vietnamese pho with friends. At night, the campus computer lab became his refuge, where the basic Apple desktop computer bore witness to his initial explorations in programming.

However, it was here that Zhao Changpeng began to reveal his extraordinary talent. In 1999, he collaborated with Professor Jeremy Kubertstock to publish an academic paper on artificial intelligence—a cutting-edge topic that had not yet gained widespread attention. In a Montreal café, Kubertstock recalled that Zhao Changpeng was the only undergraduate student in his graduate seminar, and this unique status, along with his intelligence, left a deep impression on him.

At this turning point in his life, Zhao Changpeng read a book that would change his life—"Rich Dad Poor Dad." This book reveals the different paths of hard work and wealth creation through the stories of two fathers. After reading it, Zhao Changpeng began to question his father's traditional view of finding a respectable job. He started to yearn for owning his own business rather than merely pursuing professional respect.

Zhao Changpeng's father was an extraordinarily talented geophysicist. While working at GeoTech in Ontario, Canada, he collaborated with geophysicist Jean LeGoff for six years, achieving remarkable accomplishments. It was his original code that enabled GeoTech to create three-dimensional inversions of geophysical data using software, which became an invaluable tool for engineers. Even years later, the company still uses the user manual he wrote. LeGoff believed that Zhao Shengkai was fully capable of achieving great success in academia or business, but his humility and focus on the work itself hindered him from reaching higher career peaks.

Zhao Changpeng recalled that his father would spend every day delving into complex mathematical equations in the lab or at the family desktop computer, fully absorbed in his academic research. However, due to the immense historical changes and his status as an immigrant, Zhao Shengkai could only toil on the fringes of academia, unable to enjoy the reputation and achievements he could have attained had he been born in a different era or place.

As an intellectual, Zhao Shengkai always emphasized the importance of hard work and obtaining a respectable job. "Rich Dad Poor Dad" changed Zhao Changpeng's way of thinking; he began to realize that while professional respect is important, material wealth cannot be ignored either. This shift in mindset prompted him to make a significant decision: to abandon his studies and dive into his career.

In 2021, Zhao Shengkai passed away from leukemia in Toronto. When mentioning his father, Zhao Changpeng's tone was filled with deep regret, as if recalling his own youth. Zhao Shengkai spent his life immersed in his laboratory and computer world, missing every exciting moment of his son's volleyball matches. "I was the captain of the volleyball team, and we had two matches every week, but my parents never watched a single one," Zhao Changpeng recalled.

In this context, Zhao Changpeng began to reflect on the commonality between rich dads and poor dads—their complete dedication to work. Even for a billionaire, this focus comes at a cost. Zhao Changpeng worried that in his own role as a father, he might unconsciously repeat his parents' "neglect." "I do have this trait," he admitted.

Heading to Shanghai#

In 2000, after completing a summer internship at the Tokyo Stock Exchange, Zhao Changpeng chose not to return to McGill University. Although many media outlets mistakenly reported him as a graduate of McGill, in fact, Zhao Changpeng had begun his career before completing his studies. His mathematical and programming skills quickly gained recognition in the financial sector, especially in New York, where he developed futures trading software for Bloomberg, showcasing his technical talent.

However, even financial centers like Tokyo and New York could not satisfy Zhao Changpeng's growing ambition. The global economic center was shifting eastward, and Shanghai was becoming the new commercial focus. He decided to return to China—his first trip to mainland China in over a decade.

When Zhao Changpeng arrived in Shanghai in 2005, the city had become the locomotive of China's economic growth, its vitality and business opportunities starkly contrasting with the tranquility of Vancouver, Canada. Zhao Changpeng's return coincided with the arrival of the golden age of technology in the country, and with the rise of domestic tech companies and industry leaders like Li Yanhong, Jack Ma, and Pony Ma, he saw limitless possibilities.

Despite facing some challenges, Zhao Changpeng quickly achieved success in Shanghai. In 2005, he co-founded Fusion Systems with several other expatriates, a software-as-a-service (SaaS) company providing high-frequency trading systems. At Fusion Systems, he not only applied his mathematical and coding skills but also learned to "think like a salesperson," using his overseas background to bridge the gap between East and West.

However, a late-night poker game in 2013 completely changed Zhao Changpeng's fate. In this game, he met top Bitcoin evangelist Li Qiyuan and US-educated Chinese venture capitalist Cao Dayong, who introduced Zhao Changpeng to the world of cryptocurrency. Zhao Changpeng threw himself into it, selling his apartment in Shanghai and investing $1 million to buy Bitcoin (then priced at $600), but lost half of it during the subsequent bear market.

"I Am the One Who Brought CZ into Crypto Trading"#

This future billionaire left Fusion Systems in 2013 and first joined the cryptocurrency startup Blockchain.info—initially primarily a site for tracking Bitcoin transactions—as the technical lead. A year later, he was hired as the Chief Technology Officer of OKCoin.

Zhao Changpeng's entry into OKCoin was at the invitation of He Yi, who would later become a co-founder of Binance and Zhao Changpeng's life partner. Theoretically, He Yi's status as a cryptocurrency pioneer predates Zhao Changpeng's; later, in an interview with Bloomberg, she stated, "Even without considering personal relationships, I am the one who brought CZ into the cryptocurrency trading business."

Born in 1986 in a remote rural area of Sichuan Province, He Yi's parents were both teachers. While her peers were still in kindergarten, He Yi had already started first grade. Her childhood was lonely, which allowed her more time to read at home, exploring various books her parents had. It can be said that He Yi was somewhat precocious; she not only loved reading but also consistently ranked first in exams. In 2006, at the age of 20, He Yi was studying for a part-time master's degree in psychological counseling in Beijing, preparing to take the psychological counselor qualification exam, but soon realized that it was not a lucrative field. She then took a position as a homeroom teacher at a university where a friend worked. In 2012, after finishing her teaching stint, He Yi encountered a turning point in her life when a friend who worked in directing suggested she try being a host. Miraculously, He Yi stood out among numerous models, actors, and hosts, and was selected as the outdoor host for the travel channel's "Beautiful Destinations" and "Go as Far as You Can," traveling across the country with the production team. Later, she went to Beijing TV to host "Beijing New Discoveries."

In November 2013, when Bitcoin's price had just reached $1,100, OKCoin was newly established and preparing to launch a Bitcoin red envelope activity during the Spring Festival. At that time, OKCoin's investor Mai Gang approached He Yi, asking if she could help OKCoin distribute a red envelope and promote it for free on her social media. At that time, He Yi did not know what Bitcoin was, so she immediately searched for it online. After some understanding, He Yi found Bitcoin fascinating, so she went along with it and helped them distribute the red envelope. This led her to join OKCoin as Vice President, responsible for brand building and marketing.

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By then, she was already well-known as a travel program host and served as a judge on reality shows to promote OKCoin. He Yi recalled that in the same year (2014), she hired Zhao Changpeng as Chief Technology Officer because of his extensive experience in engineering trading systems, including work experience at Bloomberg LP. Zhao Changpeng and Xu Mingxing both had technical backgrounds, but they often had disagreements due to differences in decision-making logic and cultural backgrounds, leading Zhao Changpeng to leave OKCoin in 2015. After leaving the company, Zhao Changpeng had a significant falling out with OKCoin, and the resolution was not very dignified. In a lengthy 1,600-word Reddit post, Zhao Changpeng detailed how, under Xu Mingxing's guidance, the company used bots to inflate trading volume, fabricated reserve proof, and maintained opaque finances. In response, Xu Mingxing accused Zhao Changpeng of fabricating academic credentials and committing other fraudulent acts.

He Yi, caught in the middle, felt very awkward and chose to resign.

Due to a two-year non-compete agreement, He Yi could not join any cryptocurrency-related companies. Therefore, on the recommendation of Zhang Ling, an investment manager at Kleiner Perkins, she joined Yixia Technology as Vice President. At that time, Yixia Technology was very popular, having developed star products like Yizhibo, Xiaokaxiu, and Miaopai. At that time, Song Zhongji had become a sensation in China with "Descendants of the Sun," and his influence, along with his massive fan base, was a coveted prize for many live streaming platforms. He Yi secured a collaboration with Song Zhongji among numerous live streaming platforms, making Yizhibo leap to become a leading live streaming platform.

Who is Chen Guangying#

After leaving OKCoin, Zhao Changpeng founded Bijie Technology, another software-as-a-service company that provided software for exchanges and trading platforms. In the following two years, Bijie Technology's technology became the cornerstone for 30 Chinese exchanges and later became the driving force behind Binance.

Chen Guangying graduated from Shanghai University of Finance and Economics with a degree in accounting. Zhao Changpeng met Chen Guangying as early as 2010 when she was working at a friend's wine shop, providing wine for Zhao Changpeng's "Poker Night" in Shanghai. Later, Chen went to a large commercial bank for back-office management, responsible for HR, accounting, and daily operations.

In 2015, when Bijie Technology was established, Zhao Changpeng approached Chen Guangying and asked if she would be willing to join the company for back-office management. At that time, the team members were mostly engineers, and due to many restrictions imposed by the Chinese government on wholly foreign-owned and joint ventures (Zhao Changpeng being a Canadian citizen), having Chen Guangying as the nominal legal person made things much easier.

Chen Guangying agreed to this arrangement and gradually earned Zhao Changpeng's trust, later becoming the gatekeeper of Binance's treasury. However, no one knew that this arrangement would stir up a storm in the entire cryptocurrency industry. Because Guangying's name appeared on Bijie Technology's early documents, Binance's opponents seized this opportunity to spread a conspiracy theory, claiming that Chen Guangying might be the secret owner of Bijie Technology and even Binance, leading Forbes to write an investigative report on this. In a later blog post, Zhao Changpeng wrote, "Chen Guangying and her family have always been targets of harassment by the media and netizens. If I had known this would have such a negative impact on her life, I would not have asked her to do what seemed like a harmless thing at the time."

In 2015, the cryptocurrency market was still in a deep bear phase, but another tulip-like frenzy was unfolding in the "postal currency card" field. Investors were lured into investment chat rooms by so-called "stamp teachers" and "wealth consultants," investing in these seemingly promising collectibles, often resulting in huge financial losses. Although Bijie Technology did not directly participate in these stamp scams, its technology inadvertently fueled the spread of such fraudulent activities. This situation raised the Chinese government's alarm. In early 2017, the government quickly introduced new regulations to restrict the unrestrained growth of these digital platforms. By August of that year, many stamp and collectible exchanges were forced to shut down. Most of Bijie Technology's clients went bankrupt.

Digital Nomad#

Due to his experience at OKCoin, Zhao Changpeng understood the logic of the entire cryptocurrency exchange and the operation of the industry, and began to consider starting his own company that dealt exclusively with digital asset trading without involving cash. Not getting involved with financial institutions, former colleague Ver believed this would reduce risks and avoid regulation. Meanwhile, the significant rise in cryptocurrency prices attracted millions of new investors into the field and generated a new financing model in the industry—ICO.

On June 24, 2017, Zhao Changpeng began to create Binance and raised funds for the ICO of Binance Coin. The total supply of BNB was 200 million, of which 100 million was for the ICO, 80 million was held by the team (with the held BNB locked and released gradually over the years), and the final 20 million was held by angel investors. Zhao Changpeng invited He Yi to dinner and showed her the Binance project white paper. In July, Zhao Changpeng founded Binance and invited He Yi to join. She helped rewrite parts of the ICO white paper and agreed to join, thus becoming a co-founder and CMO of Binance.

Initially, it was thought that by only doing cryptocurrency trading and avoiding fiat currency trading, the exchange could evade regulation, but Binance's time in China was already running out. As early as 2013, China had first restricted banks from processing cryptocurrency transactions. To curb capital outflows, combat financial fraud, and tighten control over the national financial system, Chinese authorities banned initial coin offerings (ICOs) on September 4, 2017, and began shutting down cryptocurrency exchanges. In response to this move, Zhao Changpeng secretly and urgently migrated data hosted on over 200 Alibaba servers to Amazon Web Services and other servers within weeks. This work was successful, and Zhao Changpeng and other Binance employees moved to Tokyo, ending his 12-year entrepreneurial career in China.

From the beginning, Zhao Changpeng and Binance seemed destined to dance on the edge of global financial regulation. They preferred to operate outside government oversight, making it difficult for them to settle in any one country for the long term.

In 2018, a scam incident triggered by forged Google ads caused countless customers to lose their funds on Binance. Although Binance was not directly responsible for these losses, the incident drew significant attention from Japanese regulators. They demanded that Binance register as a formal exchange, which was clearly an unacceptable condition for Zhao Changpeng. Therefore, he decided to relocate his crypto empire to Malta, where Prime Minister Joseph Muscat was open to cryptocurrencies and welcomed related businesses.

However, Binance's time in Malta was also brief. Ultimately, Binance announced that it would no longer seek a physical headquarters but would choose a decentralized operating model. This level of decentralization was so high that for a time, it seemed even Zhao Changpeng himself was consciously avoiding the internet, as if he, like his empire, had become a global entity without a fixed address.

"We Are Not Just Defending, But Fighting for the Industry"#

In 2017, early in Binance's establishment, Zhao Changpeng began to engage with Sequoia Capital. In the August negotiations, Sequoia set a valuation of 500 million yuan for Binance in its Series A round and planned to invest 60 million yuan at this valuation for a 10.714% stake. On August 25, both parties reached a term sheet, and on September 1, they signed a contract. At the same time, Sequoia agreed to provide a bridge loan of approximately 30 million yuan to Binance's Japanese subsidiary. In the term sheet signed by both parties, they agreed to exclusive cooperation and further negotiations on financing, with the exclusivity deadline set for March 1, 2018, totaling six months.

However, three days later, on September 4, the situation changed dramatically. Chinese authorities banned initial coin offerings (ICOs) and began shutting down cryptocurrency exchanges, leading to a sharp decline in cryptocurrency prices. At that time, the entire market was in despair, with exchanges withdrawing and projects returning coins, and national policies led Sequoia to lose confidence in cryptocurrency exchanges. Under these circumstances, Sequoia had to reassess whether to continue investing in Binance, so they delayed the payment.

Within two weeks, Bitcoin began a dramatic rebound, and the cryptocurrency market entered a full bull phase. During this process, Binance earned a lot of money solely from transaction fees and listing fees, so Binance was no longer in a hurry. On December 14, Binance proposed to Sequoia that existing shareholders and angel investors believed that Sequoia's valuation in the Series A financing was too low. On December 17, Sequoia attempted to present a new proposal to Binance. However, in the early hours of December 18, Binance informed Sequoia that existing shareholders and founders were not very accepting of this new proposal.

On December 27, Sequoia unilaterally applied to the Hong Kong court for an injunction to prevent Binance from negotiating with other investors, and the Hong Kong court approved the injunction. Binance protested against the injunction, arguing that Sequoia's unilateral application for the injunction was an abuse of litigation procedures. This was the first round between Binance and Sequoia, resulting in the Hong Kong court approving the injunction. Binance was prohibited from negotiating with other investors. It wasn't until April 2018 that this situation changed, with Binance's defense stating that "the negotiations with IDG were for Series B financing and were not within the scope of the Series A financing signed with Sequoia." The Hong Kong High Court announced in its first-instance judgment that the injunction would be lifted, but this matter was not officially settled until the end of 2018, which also meant that Binance could continue negotiations with investors for financing. This was the second round between Binance and Sequoia, with Binance emerging victorious, but the time cost was enormous.

Out of dissatisfaction with Sequoia's actions, Zhao Changpeng sued Sequoia in June 2019 for compensation and posted nearly ten tweets on Twitter:

The arbitration tribunal rejected all of Sequoia's claims;
I won, the case was very destructive, and the injunction prevented it from raising funds for Binance at the end of 2017, which was a critical moment for the market;
Previously, the injunction and Sequoia's serious accusations were made public, but since the arbitration was confidential, I could not publicly defend myself.
The Hong Kong court later determined that Sequoia's actions in obtaining the injunction were an abuse of procedure. At the end of last year, the arbitration tribunal finally determined that all of Sequoia's claims were completely unfounded.
Sequoia China incurred a total of $2.4 million in related legal fees but lost the case. Even after winning the lawsuit, I was not allowed to make the results public, so I had to counter-sue to disclose the results.
I had to initially pay $779,000 in legal fees myself, which was ultimately paid by Sequoia. This is something that most entrepreneurs cannot do. Most entrepreneurs cannot secure additional funding for their startups when facing imminent lawsuits.
Many startups have no choice but to succumb to the unfair terms or practices adopted by venture capital firms, especially a very well-known venture capital firm;
We are not just defending, but fighting for the industry;
Fortunately, for today's entrepreneurs, there are now other options. I welcome people to use blockchain-based fundraising activities.

Faced with top-tier investment institution Sequoia Capital, Zhao Changpeng did not back down: "I believe that the voice should now be in the hands of entrepreneurs. Good projects and good teams will absolutely not lack funding." Ultimately, Zhao Changpeng not only did not take Sequoia's investment but also did not secure IDG's investment.

The Fork in Life#

During the cryptocurrency boom from 2020 to early 2022, Zhao Changpeng and SBF were the two most influential figures in the field. Their backgrounds and experiences had obvious similarities. Most notably, they were both children of academic families. However, while Zhao Changpeng's father was a scientist, he remained a marginal figure in academia. In contrast, SBF was the son of two law professors at Stanford University, possessing the highest level of resources and environment in academia. Despite starting from similar points, their life trajectories presented starkly different pictures.

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SBF was accused of a series of fraudulent crimes, including misappropriating user funds, and ultimately ended up in prison. In contrast, Zhao Changpeng actively sought reconciliation with regulators, admitted to violating U.S. anti-money laundering laws, paid fines, resigned as CEO, and further increased Binance's compliance (U.S. regulators did not accuse Binance of misappropriating any user funds or manipulating the market).

"I made mistakes, and I must take responsibility," Zhao Changpeng wrote on social media platform X (formerly Twitter), "This is the best for our community, Binance, and myself." Meanwhile, Zhao Changpeng was already a father of two.

Author's Note: This article is based on publicly available information and has not been reviewed by the parties involved. If there are any errors or omissions, please contact the author @hicaptainz for corrections.

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