Binance boss Zhao's story: From flipping burgers to landing in SEC's frying pan

IANS Photo

IANS Photo

Washington, June 11 (IANS): Changpeng Zhao, founder of Binance known by his initials CZ, has no intention to give in.

Since the lawsuit filed against him personally and his company Binance and related entities, by the US regulator Securities and Exchange Commission (SEC) last Monday, Zhao has fought back through a string of posts on social media along with a response to the charges.

Zhao has targeted Gary Gensler, the SEC chair, and his agency.

"Wonder if he ever reads the comments under his post, from the consumers he is supposed (sic) to protect," Zhao wrote, retweeting a post from Gensler detailing the charges.

In another tweet, he called for a poll on "Who protects you more? SEC or Binance?" The result was a whopping 85 per cent for Binance.

Zhao has also retweeted posts that describe the SEC lawsuit against Binance as an attack on the entire crypto industry in the United States and an attempt to finish it. He retweeted another post that called for the entire industry to "UNITE".

The American regulator filed a lawsuit on June 5 charging Binance, operator of the world's largest crypto exchange, Zhao and others with running unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and making unregistered offers and sales of securities.

The SEC has said that Zhao and Binance executives have "secretly" allowed high-value Americans to use the platform contrary to their public pronouncements.

They are also accused of having "secretly controlled" Binance.US at variance with their public claims that the two entities are autonomous of each other.

"We are disappointed that the US Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief," Binance said in response to the lawsuit.

It added: "While we take the SEC's allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously."

Zhao has come a long way from Jiangsu, China, where he was born to parents who were both teachers. The family immigrated to Canada when he was 12. They settled down in Vancouver and Zhao chipped in with the family income by flipping burgers at a local McDonald's and doing night shifts at a gas station.

After studying computer science at McGill University, Zhao went to work for a Tokyo Stock Exchange sub-contractor. In 2005, he moved to Shanghai and founded Fusion Systems, a company that, Forbes magazine said, was "known for building some of the fastest high-frequency trading systems for brokers".

In a Forbes profile of him in 2018, just seven months after he had founded Binance, Zhao was said to prefer black hoodies -- a mix, perhaps, of Mark Zuckerberg's hoodies and Steve Jobs's black turtlenecks. And he allowed himself no indulgences, except cellphones; he owned three.

In 2013, Zhao joined the founding team of (now, a company which says it started as the first Bitcoin blockchain explorer in 2011 and then created a cryptocurrency wallet that accounted for 28 per cent of Bitcoin transactions between 2012 and 2020.

Zhao left to found Binance in 2017. And by 2023, he was worth $10.5 billion. He is only 45 and lives mostly in Dubai.

A typical day for him, he said in a recent Twitter Spaces interaction, begins at 8 or 9 a.m. That's later. But he also goes to bed late: 2 a.m. He works with a trainer in the morning, makes calls, has lunch and takes a nap.

He said: "Waking up at 8:00 or 9:00 is helpful for coordinating with the teams in Asia. I wake up to a large number of messages and have to make calls while responding to messages at the same time.

"The teams will often see me on one call, but then I'm responding to messages in a different group. I do that a lot, but I'm pretty public about it."

By 8 or 9 p.m., according to Zhao, "things usually quiet down" and "I consider what to do with my free time. Usually, I end up staying home and listening to an audiobook. I listen at 2x or even 2.5x speed. That's why I talk fast, too. I often listen while playing very simple games.

"I'll play silly games that require no concentration, but they allow me to listen to the book. If I don't play these games, it's actually harder to concentrate sometimes. I end up listening to books for around an hour or two -- some days even longer. Doing this, I can easily finish one, two, or even three books a week."

That typical day probably includes a call or two with his lawyers now.