Changpeng Zhao, also referred to as “CZ,” is the creator and former CEO of Binance, the biggest cryptocurrency exchange in the world. In 2017, Zhao launched Binance, which saw a rapid increase in daily trading volume to over $20 billion. He was a fervent fan of Bitcoin and made a fortune in the cryptocurrency space, but Binance Holdings Ltd. was the primary source of his wealth. Zhao’s estimated net worth as of March 2024 is $39.8 billion, making him the 35th richest person in the world. 6 billion.
On Nov. 21, 2023, Zhao entered a guilty plea to charges in the US related to money laundering. He agreed to pay a $50 million fine as well as resign from his firm’s leadership position as part of his plea deal. However, this plea deal did not mean that his legal issues were resolved. According to federal sentencing guidelines, Zhao may receive a sentence of up to 18 months in prison, as reported by the New York Times. Senior Justice Department officials have stated that prosecutors have not ruled out the possibility of seeking a more severe sentence. Sentencing is now expected in late April.
Binance itself announced in a Nov. 21 statement that it had “reached resolutions with the U. S. the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, the Department of Justice, and the Commodity Futures Trading Commission regarding their inquiries into previous registration, compliance, and sanctions issues It also entered a guilty plea on its own and consented to pay more than $4 3 billion in fines and forfeitures.
Richard Teng, who was previously Binance’s global head of regional markets, will take over as CEO of the company effective immediately, the company announced.
Binance, the world’s largest cryptocurrency exchange by daily trading volume, boasts a complex ownership structure that has evolved over its six-year history. This article delves into the intricacies of who owns Binance, exploring the roles of its founder, Changpeng Zhao (CZ), and other key players.
Binance’s Founder: Changpeng Zhao (CZ)
Changpeng Zhao, often referred to as “CZ,” is the founder and former CEO of Binance. He holds a significant stake in Binance Holdings Ltd., the company that owns and operates the exchange. Though the exact percentage of his ownership remains undisclosed, estimates suggest it could be as high as 90%.
CZ’s journey began in China, where he studied computer science and later worked for Bloomberg and other tech companies. He became fascinated by Bitcoin in 2013 and subsequently founded Binance in 2017. Under his leadership, Binance rapidly grew to become the dominant force in the cryptocurrency exchange landscape.
However, in November 2023, CZ stepped down as CEO following a guilty plea to money laundering charges in the United States. He remains a major shareholder and continues to play an influential role in Binance’s operations.
Other Key Players in Binance’s Ownership Structure
While CZ holds the majority stake, other individuals and entities also play crucial roles in Binance’s ownership structure. These include:
- Yi He: Co-founder of Binance and a close associate of CZ. He is believed to hold a significant stake in the company.
- Early Investors: Several early investors, including venture capital firms and angel investors, contributed to Binance’s initial funding rounds. Their ownership percentages remain undisclosed.
- Employees: Binance has a large and growing employee base, with some employees holding stock options or other forms of equity in the company.
Binance’s Legal Structure and Regulatory Challenges
Binance operates as a complex network of entities across various jurisdictions. The company’s legal structure has been a subject of scrutiny, with regulators in several countries questioning its compliance with local regulations.
Binance has faced regulatory challenges in the United States, the United Kingdom, and other countries. These challenges have primarily focused on issues related to anti-money laundering (AML) and know-your-customer (KYC) compliance, as well as concerns about the exchange’s lack of a clear headquarters.
In November 2023, Binance reached a settlement with the US. Department of Justice, Commodity Futures Trading Commission, and other regulatory agencies, agreeing to pay over $4 billion in fines and penalties to resolve investigations into historical compliance issues.
The Future of Binance’s Ownership
The future of Binance’s ownership structure remains uncertain. With CZ stepping down as CEO and regulatory scrutiny intensifying, the company may face pressure to restructure its ownership and operations to comply with global regulations
It is possible that Binance could seek to go public through an initial public offering (IPO) in the future. However, the company’s complex ownership structure and regulatory challenges could pose obstacles to such a move.
Binance’s ownership structure is a complex and evolving landscape. While CZ remains the majority shareholder, other individuals and entities play significant roles. The company’s legal structure and regulatory challenges have raised concerns, but Binance continues to operate as the world’s leading cryptocurrency exchange. The future of Binance’s ownership remains uncertain, but the company’s success will likely depend on its ability to navigate regulatory hurdles and adapt to the evolving landscape of the cryptocurrency industry.
Frequently Asked Questions
Who is the CEO of Binance?
Richard Teng is the current CEO of Binance, having taken over from CZ in November 2023.
Is Binance a publicly traded company?
No, Binance is not currently a publicly traded company.
Where is Binance headquartered?
Binance does not have a formal headquarters and operates as a decentralized organization with offices in multiple countries.
What are the biggest challenges facing Binance?
Binance faces challenges related to regulatory compliance, competition from other cryptocurrency exchanges, and the volatility of the cryptocurrency market.
What is the future of Binance?
The future of Binance depends on its ability to navigate regulatory hurdles, adapt to the evolving cryptocurrency landscape, and maintain its position as a leading cryptocurrency exchange.
Additional Resources
- Binance Wikipedia Page: https://en.m.wikipedia.org/wiki/Binance
- Investopedia Article on Changpeng Zhao: https://www.investopedia.com/who-is-changpeng-zhao-6828869
- Binance Official Website: https://www.binance.com/
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Did Binance Buy FTX?
No, but almost. On Nov. 8, 2022, Zhao announced on Twitter that Binance had signed a nonbinding letter of intent (LOI) to buy FTX. Following a full day of due diligence, the agreement was canceled, and Binance did not ultimately acquire FTX. On Twitter, Zhao allegedly referred to former FTX CEO Sam Bankman-Fried as “one of the greatest fraudsters in history.” FTX later filed for Chapter 11 bankruptcy.
Career and Founding of Binance
Zhao began working as a contractor for the Tokyo Stock Exchange following his graduation from McGill. From 2001 to 2005, he headed Tradebook Futures Development at Bloomberg Professional Services. Eventually, he moved to Singapore to launch Fusion Systems after starting an IT consulting business with a few friends.
Zhao also launched a few other businesses, such as Bijie Tech, which offers exchanges cloud-based services. As the company expanded, Zhao considered starting his own cryptocurrency exchange when China started to crack down on cryptocurrency exchanges in March 2017.
In September 2017, China outlawed all cryptocurrency exchanges, despite Binance’s July 2017 launch. Zhao was compelled to relocate, but the business went completely remote rather than just looking for a new place to operate.
Binance expanded swiftly, ranking among the largest cryptocurrency exchanges based on daily trade volume. With 90 million clients worldwide and a daily trading volume of $76 billion, it currently conducts business globally. Zhao, who owns the majority of Binance Holdings, has seen a notable rise in his net worth over the years. In 2021, amidst the cryptocurrency boom, his net worth peaked at almost $100 billion. By the end of 2023, Zhao’s net worth had increased by nearly $25 billion, roughly matching the time that the price of Bitcoin had more than doubled.