The richest prisoner in U.S. history
How long does it take to go from being an unknown person to becoming a billionaire? It took Binance founder Zhao Changpeng only 4 years.
In 1977, Zhao Changpeng was born into a teacher's family in Lianyungang, Jiangsu. After graduating from elementary school, he immigrated to Vancouver, Canada with his parents.
After graduating from McGill University with a degree in computer science, he joined Bloomberg, where he was mainly responsible for developing software for trading futures. At the age of 28, Zhao Changpeng decided to start a business in China. He founded Fuxun Information Technology Co., Ltd. in Shanghai to develop trading systems for securities companies.
Zhao Changpeng learned about cryptocurrency from a venture capitalist. At that time, one Bitcoin was only sold for $13. He was keenly aware that Bitcoin might be a hot spot in the future. Since then, he has started to get involved in cryptocurrency, and he invested all the money he earned from selling his house in Shanghai into the cryptocurrency market.
Everyone thought Zhao Changpeng was crazy. In 2015, Shanghai housing prices began to soar, but Bitcoin fell to one-third of its original price.
Even though his mobile phone was the only valuable thing left on him, Zhao Changpeng remained unshakable and insisted that Bitcoin would soar.
In the same year, he met He Yi and Xu Mingxing and joined OK Coin as technical director.
A year later, Zhao Changpeng had a conflict with Xu Mingxing and decided to resign. On June 24, 2017, he founded Binance, and his former colleague He Yi also announced that he would join Binance. One of them was responsible for technology, and the other was responsible for marketing. At the peak of Binance, the server was once shut down due to too many registered users.
Half a year later, Forbes published the world’s digital currency rich list for the first time, and Zhao Changpeng ranked third on the list, officially becoming a member of the billionaire club.
At the same time, Binance also announced that its profit has reached 200 million yuan, which is a record-breaking achievement.
In 2021, he became the richest Chinese with a net worth of US$94.1 billion, surpassing many famous billionaires such as Zhong Shanshan, Zhang Yiming, and Ma Huateng.
Zhao Changpeng is experiencing the most glorious moment in his life, but he is also facing challenges.
The US government took the lead, and multiple law enforcement agencies filed lawsuits against Zhao Changpeng, accusing him of multiple crimes including money laundering. If these charges are proven, he will face more than 10 years in prison and will become the richest prisoner in US history.
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Pay a huge fine and go to jail for four months
Following the U.S. Department of Justice, the U.S. Securities and Exchange Commission (SEC) also filed as many as 13 charges against Binance and Zhao Changpeng himself, including participating in false transactions, misusing customer funds, operating an unregistered exchange and many other charges.
More and more countries are tightening their regulation of cryptocurrencies, but some countries in the Middle East, South Asia and Africa are open to Bitcoin.
Binance has acquired WazirX, a well-known Indian cryptocurrency exchange, and announced that it will invest in a compliant crypto trading asset platform in Jakarta, Indonesia.
In April last year, Zhao Changpeng announced that Binance would start operations in six countries, including Egypt, South Africa, Israel, Saudi Arabia, the United Arab Emirates, and Nigeria.
He also said that he would not only be visiting but would also be based in the Middle East and North Africa.
Zhao Changpeng also obtained UAE citizenship.
Since there is no extradition agreement between the United States and the UAE, the United States cannot arrest him across borders as long as he does not leave the UAE.
In the past few years, Binance has never stopped its game with various governments, and Zhao Changpeng has rich experience in fighting. At the beginning, the attitude of this Bitcoin tycoon was very tough and he would never surrender himself.
A few months later, foreign media broke the news that the US government designed to trick Zhao Changpeng out of the UAE.
In the early morning of November 22, 2023, the official website of the U.S. Department of Justice issued an announcement stating that it had reached a plea agreement with Binance and its founder Changpeng Zhao. Binance paid a fine of US$4.32 billion, and Changpeng Zhao himself paid a fine of US$50 million and promised to resign as CEO of Binance.
The American media believes that Zhao Changpeng has reached a "historic settlement" with the US Department of Justice this time.
In March of this year, the US government not only unilaterally modified Zhao Changpeng's bail conditions, added restrictions and supervision measures, but also confiscated his passport to prevent him from leaving.
Zhao Changpeng paid a fine of up to $3 billion and a bail of $175 million.
The total amount of the two fines has reached 7.4 billion US dollars (about 53.1 billion RMB). No wonder some netizens joked that "Binance fell, and the United States was full."
The matter was not over after the penalty was admitted. The Seattle court in the United States found Binance guilty of money laundering and sentenced Zhao Changpeng to four months in prison. At the end of September, he regained his freedom.
After Zhao Changpeng was released from prison, he received good news one after another. Bitcoin reached a high of 100,000 US dollars in just two months, and Boss Zhao's net worth increased several times.
Now is not the time for him to be proud, because he has not yet settled the accounts with the US government.
3. The former richest Chinese man admits defeat but still can't buy peace with money
Zhao Changpeng paid the money and went to jail, and it seems that his account with the US government is settled. However, the reality is that the four words "compliant and legal" are like a tight hoop around his neck.
From the moment it was born, cryptocurrency was destined to be outside of regulation.
All you need is an email address, and you can easily open an account to trade cryptocurrencies regardless of who you are or where you live.
As for where the money came from and where it went, and who it belongs to, only the trading platform itself knows, and it is not subject to third-party supervision.
If Bitcoin was just a small-time affair like when it first appeared, Zhao Changpeng would not have been imprisoned. As the price of Bitcoin has skyrocketed, this completely unregulated trading behavior has not only become a major disaster area for money laundering, but also threatens the health of a country's financial system.
China became the first country in the world to ban virtual currency. Since then, many countries including Japan, Malta, the United Kingdom, Singapore and others have also strengthened the supervision of virtual currency and tightened policies.
Zhao Changpeng had tried to find office locations for the headquarters in these countries but all failed.
Good fortune and bad fortune go hand in hand. From the day he ascended to the throne of the richest Chinese man, he became a lamb to be slaughtered.
The US government has swung its regulatory stick and listed a host of crimes. Zhao Changpeng has only two choices: go to jail or pay for peace of mind.
There is a detail in the settlement agreement with the US Department of Justice that Zhao Changpeng promised to resign as CEO of Binance, and the latter allowed him to retain Binance shares. This means that as long as Bitcoin transactions exist, he can obtain a steady stream of benefits.
Now that Bitcoin has reached a high of $100,000, more and more investors are pouring into Binance hoping to make a fortune. Zhao Changpeng knows that his situation is not good, and he has repeatedly emphasized on his social media account that he is not Chinese, apparently worried that the United States will use this as an excuse to sanction him again.
He is like a frightened bird. The more the price of Bitcoin rises, the more likely he will be targeted by US regulators. A child with gold in his arms can never beat an adult with a stick. In the future, Zhao Changpeng may have to pay more protection fees, and Binance may become a long-term money bag for the US government.