Selling the house and founding Binance
Zhao Changpeng (also known as CZ) was born in Jiangsu in 1977. When he was 12 years old, he immigrated to Canada with his parents. He majored in computer science in college and started his programming career. After graduating from college, CZ joined several companies as a technical consultant, mainly designing and developing matching transaction order systems. It was not until 2013 that he heard about Bitcoin through his good friend Bobby Lee, and began to get in touch with blockchain. Bobby Lee once said to CZ that if you invest 10% of your net assets in Bitcoin, as long as it rises 10 times, your wealth will double, and if you lose money, you will only lose 10% of your assets. Because of this sentence, CZ became very interested in blockchain; then CZ began to get involved in blockchain projects and joined Blockchain.info as the third founding employee. During his 8 months of work there, he met Bitcoin evangelists Roger Ver and Ben CZ frequently came into contact with Reeves until June 2014, when he was invited by He Yi (known as the queen of the cryptocurrency circle, now the co-founder and CMO of Binance) to become the CTO of OKCoin. At this time, CZ sold his house in Shanghai and invested all his funds in Bitcoin. During his work at OKcoin, CZ mastered the logic of the operation of crypto asset exchanges and the entire industry. Later, due to a conflict of ideas with OKcoin's founder Mingxing Xu, he left OKcoin and chose to start his own company that does not involve cash and specializes in digital asset transactions. Thus, today's Binance was born.
Dishonest Sequoia, wandering Binance
Two-year planning On June 24, 2017, Binance was officially established and began to raise funds for Binance platform currency BNB. At that time, Binance raised $15 million in crypto assets in just about a week. Then on July 14, 2017, the Binance web terminal was officially launched, and BNB was listed for trading. The issue price of BNB was $0.15 at the time, and the lowest price after the launch was $0.23 USD. It is worth mentioning that Binance is the first exchange in the industry to promote coin-to-coin trading. If it were not for Binance, we might not be able to do it when cross-chain technology was not mature. Being able to convert Bitcoin into Ethereum, potential startups will naturally attract the attention of venture capital companies. In September of the same year, a Chinese venture capital company called Sequoia Capital set its sights on Binance. In the initial negotiations, the investment letter signed by Sequoia Capital and Binance valued Binance at US$80 million, and at the same time occupied about 11% of Binance's shares. Later, it attracted another top venture capital company IDG. This time, IDG negotiated successively and gave two rounds of valuations of US$400 million and US$1 billion. Later in December, the Binance team submitted a new valuation report to Sequoia Capital. This time, he was angrily accused by Sequoia Capital of breaking his promise. On April 25, Sequoia Capital sued Binance in Hong Kong because it believed that Binance violated the investment exclusivity agreement and played two games. Because the negotiations lasted for several months, the final investment contract was not signed, but Bitcoin rose. By December, Bitcoin had broken through $20,000, and it was at this time that Zhao Changpeng quit; Zhao Changpeng told Sequoia Capital that Sequoia's offer seriously underestimated the value of the exchange, and that IDG Capital offered a much higher price. The capital market is a business, and there is nothing wrong with that. The highest bidder wins, but the problem is that according to the agreement, Binance violated the exclusive agreement signed with Sequoia; this is a different time, and the original valuation and the later valuation are of course different, and this can be discussed. But it was you who signed the exclusive agreement before, and now it is you who tore up the agreement. Where is your credibility in the whole process? Whenever there is a better solution, he always disdains to adopt it. Just tear it up. Zhao Changpeng doesn't seem to care about his reputation. Before, he often said something contradictory.After that, the number of Binance user registrations experienced explosive growth. From December 2017 to February 2018, the number of registered users increased from 1 million to 7 million, making Binance the world's largest digital asset trading platform. Due to the rapid development of Binance, CZ also appeared on the cover of Forbes magazine at the time and was ranked third on the rich list with a net worth of 2 billion US dollars.
Policy crackdown, fleeing overseas
In September 2017, the central bank and seven other ministries and commissions defined ICO as illegal financing, and the price of digital currency plummeted. This was called the famous 9.4 moment by the currency circle, but what was unexpected was that the supervision was very strict and would be even stricter in the future; on January 20, 2018, the central bank issued another notice (Notice on Conducting Self-inspection and Rectification of Payment Services Provided for Illegal Virtual Currency Transactions), requiring all legal person payment institutions under its jurisdiction to conduct self-inspection and rectification, strictly prohibiting the provision of services for virtual currency transactions, and taking effective measures to prevent payment channels from being used for virtual currency transactions; a week later, the China Internet Finance Association issued a notice (Notice on Preventing Risks of Overseas ICO and "Virtual Currency" Transactions), informing that "according to relevant national management policies, domestic investors' network access channels, payment channels, etc. may be affected, and investors will suffer losses"; a series of regulatory policies, like a mountain pressing down on the top, attacked the entire domestic currency industry.
On February 1, Binance’s official website released an announcement “to Chinese users” with only one sentence: “In accordance with relevant Chinese policies and regulations, Binance will no longer provide services to users in mainland China”; the Binance team transferred personnel and servers overseas and dispersed them to more than a dozen different countries and regions. At the same time, exchanges such as OKCoin, Bitcoin China, and Huobi announced the suspension of domestic trading operations.
Zhao Changpeng and He Yi have since fled overseas. Many cryptocurrency tycoons who have made a lot of money, including Xue Manzi and Bao Erye, have moved to the United States, Canada, Japan and other places. Unexpectedly, after the Forbes report, Zhao Changpeng, who was pushed to the forefront of public opinion, did not enjoy the glory brought by the huge quota. Instead, he and his Binance fell into a situation of displacement.
In March 2018, Binance was hit by the Japanese government again. The Financial Services Agency of Japan issued a warning document to Binance, saying that Binance had conducted cryptocurrency trading business without registration, which violated relevant legal provisions. If it did not stop trading, it would file criminal charges with the police. Fortunately, on the day of this incident, CZ received an invitation from the Prime Minister of Malta, welcoming Binance to Malta to develop blockchain. So after the Prime Minister's meeting, CZ decided to move Binance to Malta. CZ firmly believed that Malta would be the next hotbed for blockchain companies and the center of the European blockchain system. Subsequently, Binance began its entrepreneurial journey in other countries. For example, it reached a cooperation with Uganda and established Binance Labs. It signed a cooperation agreement with Digital Jersey, the British Special Economic Zone Industrial Association. After Binance established a local legal and compliant exchange, it established the Binance Investment Protection Fund SAFU and acquired Trust wallet. At the same time, Vertex Ventures Network, a venture capital company in Singapore, announced a strategic investment with Binance to jointly establish Binance Singapore expanded Binance's development in Singapore. In 2019, Binance started the Launchpad section. The first Launchpad project was Bittorent (BTT). At that time, BNB and TRX were snapped up, which is what we call IEO. Soon after, Binance released a heavyweight news announcing a partnership with Israel's payment company Simplex. Binance users can use VISA Mastercard credit cards to purchase Bitcoin, Ethereum and other encrypted assets, greatly reducing the threshold for users to purchase encrypted assets. Subsequently, Binance launched the decentralized exchange Binance DEX and Binance Chain. As soon as the news came out, the trading volume of Binance Exchange took the first place in the entire ranking.
Hackers steal coins, it's scary to think about it
Late at night on March 7, 2018, Binance experienced a system failure, with multiple investors finding their accounts hacked and their virtual assets sold for Bitcoin without their knowledge, involving more than 20 types of currencies. Subsequently, the hacker used all the Bitcoins in the stolen accounts to buy another currency, VIA, at a high price, causing the market price of VIA to rise 110 times in an instant. However, the strange thing is that the hacker's attack stopped at that point, and the funds in the account were not transferred away, which can be called a heroic thief.
Around 2:30 a.m., Zhao Changpeng said on Twitter, "All funds are safe, hackers did not rob funds." According to Binance's explanation, this was a large-scale attempt to steal coins by obtaining user accounts through phishing; however, due to Binance's effective measures, all funds are safe and no funds have fled; the funds did not seem to have been transferred, so what was the purpose of the hackers? Just to show off their operations? But soon someone found doubts; the hackers who had planned in advance would of course think that the exchange would immediately stop all account withdrawals to recover losses, so they made a "feint to the east and attack the west" to attack Binance, but the biggest profit was not obtained from Binance. Instead, it came from: the digital currency short orders that had been posted on various exchanges around the world, so the real purpose of the black hands behind it was to make a profit from shorting? This is indeed the case. After the news of the Binance theft came out, a large number of virtual currencies were sold at market prices, and the virtual currencies of various platforms plummeted across the board.
Therefore, the hacker's purpose is not to steal the assets in the Binance account, but to spread panic and short sell one or more digital currencies to make a profit, which can be called a diversion. So who is the mastermind behind this? Since this unknown hacker has already hacked into the account, why did he go to the trouble of short selling to make a profit? So it is terrifying to think about it carefully. Some people suspect that this is a "self-directed" incident, and Binance is the actual beneficiary...
What is even more interesting is that Binance claims to have rolled back all abnormal transactions in order to solve the problem. Rollback refers to the act of restoring a program or data to its last correct state when a program or data is processed incorrectly. In layman's terms, it is "undoing a move". "The greatest spirit of blockchain is that data cannot be tampered with. Binance rolled back transactions and invalidated some transactions. Did it tamper with its own transaction data? This is obviously contrary to the spirit of blockchain," said Ding Peng, chairman of the China Quantitative Investment Society.
There is an even more shocking statement circulating in the industry, that Zhao Changpeng shorted the market based on the data held by the exchange?
Expand business and open leverage
Soon after, CZ began to acquire contract trading platform JEX, Indian digital asset platform WazirX, and Dapp Review, invested in crypto asset derivatives platform FTX, and Binance also opened its own contract leverage function; the maximum multiplier can be increased to 125 times. After that, Binance often experienced drastic price fluctuations, and users were unable to operate within Binance, resulting in account funds being liquidated. At that time, Binance was constantly involved in scandals, and Binance's behavior of cutting leeks was widely circulated among the people.
Over the years, Binance has been facing user rights protection due to various issues, including the embezzlement of 107 bitcoins from foreign users, the running away of multiple Binance Smart Chain projects, the suppression of 21 million bitcoin data, and the malicious liquidation of the contract market by pulling the plug, etc. It has been called a "harvester" by countless users.
In February 2020, Binance launched a cloud service, also known as Binance Cloud, which took over the technology and experience of the Binance team, and linked Binance's liquidity data to provide services for the entrepreneurs of the exchange. This also saved the entrepreneurs of the exchange the cost of technology research and development. They only needed to pay maintenance fees to the Binance Cloud technical team and subsequent profit sharing. For the launch of Binance Cloud, CZ expected that Binance Cloud's revenue will surpass blockchain exchanges in the next five years and become Binance's largest source of revenue. In addition, in September 2020, Binance launched the Binance Smart Chain.
Cut leeks ruthlessly and become the richest man
In 2020, Binance's single-day spot trading reached a new peak of 32.1 billion US dollars. On the same day, the single-day contract trading volume exceeded 27.4 billion US dollars, and the position accounted for the number one of global exchanges. CZ was also selected by Bloomberg in December, and became the first person in crypto assets in the list of the world's 50 most influential people in 2020. Now, Binance has only been established for four years and has become the world's largest cryptocurrency exchange, with a daily trading volume of 76 billion US dollars, which is more than the other four largest competitors combined. According to the current trading scale, Binance's valuation will reach 300 billion US dollars. Zhao Changpeng, who holds 30% of Binance shares, has become the richest Chinese; in a market where zero-sum games cannot be played, CZ has achieved today's achievements, but also caused many people to be broken up. During this period, CZ also tried to get a place to stay by showing goodwill to certain countries. In July 2018, western Japan was hit by heavy rains, causing large-scale floods and landslides. Zhao Changpeng announced on Twitter that Binance would donate $1 million to the flood-hit areas in western Japan, and the announcement happened to be on July 7. Because of this, Zhao Changpeng was dubbed the "traitor in the cryptocurrency circle" by netizens.
Today, although Zhao Changpeng is named the "richest Chinese", he and his wealth cannot live together
