1. Poker Game
In 2013 in Shanghai, several middle-aged men were sitting together playing cards, but Zhao Changpeng had a vague feeling that his life might take a turn for the better.
Thinking of this, before the cards were played, Li Qiyuan actually took the initiative to talk to him. Li Qiyuan is the founder of Bitcoin China, China's first Bitcoin exchange (the one who wanted to give Lang Xianping 100 Bitcoins, but Professor Lang refused to accept them).
Zhao Changpeng only had a vague understanding of Bitcoin at the time, but Li Qiyuan's opening words, "Bitcoin is the future," made him throw away the cards in his hand.
Imagine a currency that is not controlled by any country or organization, but is completely in everyone's hands. It can circulate freely around the world, without worrying about exchange rates or inflation. And through encryption technology, it can be absolutely safe. In a word, it punches the financial crisis and kicks inflation! If these concepts are put in today's context, everyone may just laugh when they hear them. But 10 years ago, it was absolutely beyond the scope.
Zhao Changpeng was stunned on the spot. He was so excited that he felt like he had found a martial arts secret book. In particular, the core concept of Bitcoin's decentralization allows everyone to become a truly unique individual. This completely fits his vision of the future world.
Zhao Changpeng was so engrossed in listening that he didn't even realize why Li Qiyuan said so much to a fellow poker player. I guess Li Qiyuan himself didn't know. Maybe it was because of his extraordinary talent, or maybe he had a hunch that this young man could shine in this industry.
The game was over, and the bosses went home. Li Qiyuan forgot about this conversation in a few days. To him, it was just an ordinary "sermon" that he had given to countless young people who wanted to join the game. But a seed had been planted in Zhao Changpeng's heart. A seed that would shock the world in the future.
2. The Wisdom of Soha
After returning home, Zhao Changpeng dreamed of Li Qiyuan's words. Although all his knowledge came from a card game, he was already firmly optimistic about Bitcoin. For him, now is the best time to enter the game.
It has to be said that Zhao Changpeng is a ruthless person. He directly gave up his own startup company and chose to start from scratch, entering the Bitcoin industry and becoming a worker.
At first, he joined an overseas company called "blockchain". There, Zhao Changpeng met many big names in the virtual currency industry, and became the third in command of the company with his own abilities. Later, he was invited by OK Coin, a well-known domestic virtual currency trading platform, to serve as the technical director.
In 2014, more and more people paid attention to the Bitcoin track. Zhao Changpeng has become a senior and experienced figure in the industry because of his decisiveness and strong execution. It took him less than a year to go from a young boy to debut as a "Bitcoin superstar".
During this year, as his understanding of virtual currency deepened, Zhao Changpeng's belief in Bitcoin became stronger and stronger. At the same time, he also felt that he had figured it out. I have been immersed in this for many years, and I have also done international financial transactions and currency trading. Isn't it a master? With confidence in himself and belief in Bitcoin, Zhao Changpeng was obsessed.
He made a decision that made everyone call him "crazy". He sold his property in Shanghai and bet all his money on Bitcoin. This behavior shocked even the people in the industry. There are many ruthless people in the cryptocurrency industry, but this is the first time that Langmie dared to bet all his wealth on Bitcoin. But everyone felt that there must be a reason for the big guys to take action. Could it be that the price is going to change?
Everyone just waited and watched, and guess what happened? The price did change. Less than a year after Zhao Changpeng went all-in, the price of Bitcoin was cut in half. And the housing prices in Shanghai doubled. In three words, it was a loss. It is said that if you win, you will get a young model in the club, and if you lose, you will go to work in the adult industry. If a normal guy loses as much as Zhao Changpeng, he probably won't go to the adult industry, and will just queue up on the rooftop to save trouble. What kind of faith is this? It's better to just die.
The cryptocurrency world is in turmoil. It’s over. The big guys are going crazy again. But Zhao Changpeng is not an ordinary person. After losing so much money, he didn’t go to the rooftop or the sea. Instead, he became more determined to believe in Bitcoin.
Why? It's very simple. I am a young genius and a veteran in the industry, but I can be ripped off. Whose leeks can't be ripped off by Bitcoin? No matter how you think about it, there is definitely a way. Everyone knows that there is a top secret book called Sunflower Manual. If you want to practice this skill, you must castrate yourself first.
Zhao Changpeng was similar. He cut himself first, and thus achieved the evolution of faith. Just this reverse thinking has reached the fifth level. According to the general script, when the divine power is perfected, it should be invincible. Zhao Changpeng just deepened his faith and prepared to become bigger and stronger, and then the accident happened.
Not long after he started working at 0K Coin, the "Bitcoin Team" had an internal conflict. Zhao Changpeng and the company's CEO Xu Mingxing had a disagreement on the future development direction. No one knows the specific reason, but they started cursing on the Internet. One said that the CEO relied on robots to fake the trading volume and the performance was all exaggerated.
One person said that Zhao Changpeng had faked his academic qualifications and cheated the company. As the matter became more and more serious, Zhao Changpeng saw that he could no longer stay in the company, so he simply chose to leave. After going solo, he continued to start his own business, but he did not touch Bitcoin again. It was not because he gave up his faith, but because Zhao Changpeng was waiting for an opportunity to create his own Bitcoin exchange.
Soon, in 2017, the opportunity came.
3. Takeoff
In 2017, the fire of cryptocurrency finally reached the cognition of most people.
The duck knows when the river water warms up in spring. There is no need to do research. Zhao Changpeng, an old duck, knows that this will be a crazy year. The stories of getting rich overnight by speculating in cryptocurrencies are becoming more and more common in the conversation after drinking. When buying vegetables, you can hear grandpas and grandmas talking about this coin or that coin. When a track is even discussed in the vegetable market, it means that countless leeks will appear.
Zhao Changpeng knew that now was the best opportunity. In July 2017, he founded Binance, a cryptocurrency exchange in Shanghai.
Users can trade various virtual currencies on Binance and then withdraw them into US dollars or other currencies. What Zhao Changpeng earns is the handling fee for each transaction.
The profit model looks simple, but it is actually quite difficult. Why do people come to trade with you? At that time, there were at least three exchanges ranked among the best in the world. Huobi, 0K Coin, and Bitcoin China, which was founded by Li Qiyuan, the mentor of the time.
Binance, which Zhao Changpeng had just founded, could only survive in the cracks. But no one expected that Binance would start to make money as soon as it went online. Because no one understands the power of "belief" better than Zhao Changpeng. When he first entered the industry in 2013, he had no experience in the industry. But as long as you enter the industry early, there will always be a day when you can become a senior.
Now that the trend has exploded in 2017, in the eyes of newcomers, Zhao Changpeng is the big boss who expanded the territory with Li Qiyuan and others. The brand he has created is backed by time and qualifications. Besides, it is really impossible to find someone with more faith than Zhao Changpeng. After all, he really sold his house in 2014 and bet all on Bitcoin. He can be said to be the first person in China to "hold 99% of his assets in Bitcoin." With this story as a support, players burst into tears and had no choice but to choose Binance.
Everyone knows that the "believers" are the easiest to harvest. Zhao Changpeng used his faith to bring a group of loyal fans to Binance. In just half a year, Binance attracted 6 million users. With its 1.4 million transactions per second, it has become the world's largest cryptocurrency exchange. Whether it was his former colleagues or opponents, Zhao Changpeng left them far behind. This was his first peak in life, but it did not last long.
In July 2017, Zhao Changpeng just founded Binance. In September of the same year, the People's Bank of China, the Cyberspace Administration of China and seven other ministries and commissions jointly issued an announcement. It clearly defined virtual currency issuance and financing activities as "illegal financial activities" and required all related trading platforms to clean up and close transactions before the end of the month. With a ban, the world's largest cryptocurrency exchange directly became an illegal institution. Several other domestic exchanges raised the white flag and shut down their services. Even Li Qiyuan gave up his business and turned to blockchain.
For the first time, Zhao Changpeng was a little shaken. Even his mentor chose to abandon Bitcoin. Is it really necessary to persist? In the end, for the belief he had back then, he was ready to give it another try. It was this completely different decision that made the fate of Zhao Changpeng and Li Qiyuan very different. He absorbed the lost users of his peers and resolutely left China with the servers and team.
But he didn't know that what he was going to face next would be a difficult journey of "Wandering Earth" and also an exciting road to becoming the richest Chinese.
4. The Wandering Earth
Zhao Changpeng wanted to find a place where Binance could obtain a legal license. His first stop was Japan. But the treatment there was nothing comparable to that in China.
You would never have thought that the world's largest Bitcoin exchange could not rent a large office building offline because of its failure to pay taxes. Because of the lack of space, the desk had to be moved next to the toilet. Zhao Changpeng was refreshed every day when he went to work. But he didn't care. The stench did not affect Binance's daily income of tens of millions. As long as the Japanese Financial Services Agency can issue a license, the future will be easy.
But unexpectedly, after three months of staying in the toilet, Zhao Changpeng received the same ban. He had no choice but to pack his bags again and start "wandering around the world". But other people's wanderings were wandering around the earth, while Zhao Changpeng's wanderings really covered most of the earth.
As China took the lead in banning cryptocurrencies, many countries have followed suit. You may wonder why it is so unpopular? Because after all, cryptocurrencies are outside the law. No identity proof or credit record is required, and anyone can trade. Because it is not regulated, it is easy to breed illegal phenomena such as money laundering and smuggling.
Furthermore, this thing is essentially speculation. There are many examples of people getting rich overnight and going bankrupt. Anyone with a discerning eye can see that when you put the two together, there are definitely more people going bankrupt. Therefore, Binance, as the world's largest exchange, has nowhere to go.
The UK introduced a ban in 2019;
The United States introduced a ban in 2020;
Singapore introduces a ban in 2021...
Zhao Changpeng went to countless countries and hit a wall in every country. Binance could never get a legal license. It was an illegal institution everywhere on the earth. Zhao Changpeng had no choice but to go to small countries such as Uganda, Malta, and Bermuda. Although it was a little small, at least he could set up a company and accommodate thousands of employees.
During that period, Zhao Changpeng was either having dinner with this president or taking photos with that prime minister.
Finally, we successfully signed memorandums of understanding with several countries and set up offices. Unfortunately, it was more formal than meaningful. The governments of small countries are also smart. They are welcome to come and provide jobs to boost the economy. But if you want to build a headquarters? That's too much.
Zhao Changpeng felt such frustration for the first time. His belief and the future of the company seemed to be getting narrower and narrower. Although Binance is an online exchange, its offline servers and teams were driven around like stray dogs. If it continues like this, it will be over sooner or later.
But what can he do? The policies of various countries are the red line that Zhao Changpeng can never change. He pondered all night long, reviewing his experiences along the way. From the high spirits of founding Binance to the young and ignorant Bitcoin in early 2013. Zhao Changpeng couldn't help but ask himself: Why was I attracted to Bitcoin back then?
The next second, four words popped up in his mind, and he jumped up excitedly. He got it! He succeeded! It turned out that the answer was right there on the puzzle. These four words were the essence of what attracted him to Bitcoin in the first place: decentralization!
Since it is impossible to establish a headquarters in any country, then there is no need for a headquarters. Zhao Changpeng asked all of his more than 3,000 employees to go home and work from home in various parts of the world. Through online communication, Zhao Changpeng is still the absolute controller of the company, and Binance is operating as usual.
But governments around the world cannot find the headquarters of this huge company, or even the "entity" of this company. After a night of enlightenment in Longchang, Binance and Zhao Changpeng became gods. He made his fortune with Bitcoin, and finally turned the company itself into a "Bitcoin".
They created a magical scene: offline Binance, there is not even a sign to be found; online Binance is the largest wealth empire. In 2021, Binance's daily trading volume reached 76 billion US dollars, which is equivalent to 500 billion RMB. This figure is about the same as the total daily trading volume of the three exchanges in London, New York and Hong Kong in 2021.
At the end of 2021, Zhao Changpeng surpassed Zhong Shanshan, chairman of Nongfu Spring, with a net worth of US$90 billion (about RMB 573.3 billion), and directly became the richest Chinese in the world.
At that time, most people in China had never heard of such a person before. It was even more unexpected that he could actually do business with such an illusory thing. For a time, Zhao Changpeng's reputation reached its peak. With just a word from him, he could control the life and death of a virtual currency.
Even when facing the world's richest man, Elon Musk, Zhao Changpeng dared to directly poke people in the face: "Dogecoin is a joke, don't buy it."
At that time, everyone thought that this richest Chinese man was the person most likely to threaten Musk's position. But Zhao Changpeng knew in his heart that it would not be that simple. Even though he is now at the peak of his career, he has already felt the outside world's covetous eyes. And the one who is most murderous to him is the United States.
5. Many crises
Zhao Changpeng knew that he had been targeted for a long time. The rapid rise of Binance not only made its peers jealous, but also some countries were also shocked.
At first, Zhao Changpeng was surrounded and intercepted by them, and he almost went to the dead end. In the end, the boy was directly possessed by the male protagonist of the novel, and he achieved enlightenment in Longchang. However, the money he made was still astronomical, so much that even the government was jealous.
A U.S. senator once shouted publicly: "It is a shame for the United States to let a Chinese person control the world's wealth."
Zhao Changpeng heard about it, but he didn't take it seriously. There's nothing I can do. I just like seeing you hate me but can't get rid of me. But of course he also understands that the United States is not just jealous. You know, as the self-proclaimed "world policeman", the main feature of the United States is that it has wide control. When cryptocurrency, a field that they cannot control, appeared, they immediately became anxious.
In addition, the United States is known for having many enemies. From the bearded men in the deep mountains and forests of Afghanistan to the drug lords in South America, there are enemies all over the world. When the United States thinks of so many enemies, it is as easy to browse the black market for weapons through cryptocurrency as to browse the store downstairs, and it sweats even more. Zhao Changpeng is well aware of the United States' consistent style of destroying what it can't get. In addition, he is a top player in the cryptocurrency circle and a Chinese, so the conflict between the two sides is inevitable.
Sure enough, in 2023, the United States took action. First, in March, the Department of Justice filed a complaint against Binance and Zhao Changpeng, accusing Zhao Changpeng of money laundering, unlicensed payment collection, and many violations of US sanctions. Then in June, the US Securities and Exchange Commission (SEC) announced 13 charges against Binance and Zhao Changpeng.
The United States launched a series of combined punches. But Zhao Changpeng was not panicked at all. Under the attention of the world, he simply posted a "4" on the social platform. This number in cryptocurrency represents "rejection of doubt, fake news and attacks." The actions of the two sides directly determined the winner.
This is like a fight in a ring. The United States came up and showed off its muscles with somersaults, but all of it hit the air. Zhao Changpeng stood there and just raised his middle finger. It was not very harmful, but it was very insulting! Zhao Changpeng stood there and just raised his middle finger.
The reason why Zhao Changpeng dared to act so cool in front of the US government was because he had been prepared. Ever since the company was "decentralized", he has been hiding his whereabouts. Previously, a rival company hired a private detective to find out where he was, but he didn't find any trace. The same was true for the US Securities and Exchange Commission this time. Because they didn't know where he was, they couldn't even submit legal documents. In the end, they were so angry that they could only ask Binance's attorney to forward it.
After receiving the lawsuit, Zhao Changpeng stopped pretending and revealed that he was in the UAE. However, since the UAE and the United States do not have an extradition treaty, they cannot arrest him.
Overall, Zhao Changpeng won the first round. If I don't come out, what can you do? And the United States has never been so angry. Soon, Zhao Changpeng will face a more dangerous counterattack.
6. Pull
Although he had the upper hand in the first fight, Zhao Changpeng still couldn't rest easy. He keenly realized that something was wrong. Since the second half of 2023, the United States has done nothing but pile up those crimes.
You might think, since my buddy is not coming out anyway, what does it matter if there is one more crime? But the reality is not that simple. When Zhao Changpeng saw the charges, he immediately broke out in a sweat. All of them were aimed at taking lives!
Previously, Zhao Changpeng was accused of illegally providing services in the United States and failing to supervise money laundering. But now, he has been accused of "allowing criminals to conduct transactions related to child sexual abuse, drugs, and terrorist financing." Overnight, Zhao Changpeng became a "terrorist" who "affected the national security of the United States."
The famous person who got this title before was the bearded Bin Laden. Zhao Changpeng knew the ending of this old predecessor very well. He understood that the United States was putting pressure on him nakedly. If he didn't take the initiative to come forward, the next one might be the same Navy SEALs. But if he really accepted the trial, the end would not be too good. After all, Zhao Changpeng knew better than anyone how deep the virtual currency trading was in recent years.
Although the accusations of the United States are somewhat shocking, they are not entirely fabricated. For example, the one about illegally providing services to American users. When American people use Binance, a message like "Due to the regulations of the region, you cannot..." will pop up. But just like the familiar "Ignore the risks and continue to install", click OK and go for it. American people are still lining up to be leeks.
Plus, it is a fact that the platform audit is lax. With such a high transaction volume per second, no one can guarantee that the person on the other end of the account is not a bearded man holding an AK. Caught between a rock and a hard place, Zhao Changpeng realized that this matter would not be settled without some bloodshed. He chose to send a lawyer to negotiate with the United States.
Zhao Changpeng's appeal is very simple: I plead guilty, pay the fine, hand over the data, whatever is fine. I just ask the big brother not to do anything dirty, and save me and Binance - Dongniu Road, Yutu Road.
This is what the US government is waiting for. Brother Zhao is so straightforward, why didn't you say so earlier? Come on, let's calculate the money first. In the end, Zhao Changpeng and the United States reached a preliminary agreement. He had to pay a sum of 4.3 billion, a fine of 150 million, and a bail of 175 million US dollars.
At the same time, he voluntarily resigned and had to provide the US authorities with all transaction details of Binance customers and open Binance's system and backend to the US Department of Justice. The United States promised Zhao Changpeng that the maximum sentence after pleading guilty would be 12 to 18 months, and he could wait for the verdict at his home in the UAE.
We will also arrange a prison with a simple prison atmosphere and friendly neighbors to ensure that the former richest Chinese person will never be wronged.
This number is really shocking. Although the $4.3 billion (about 30.7 billion RMB) is a fine for Binance, it is still a sky-high price. I checked and found that $4.3 billion would rank 113th on the Chinese rich list in 2023.
Zhao Changpeng paid the fortune of an American billionaire, but in return he only received a promise from the United States to reduce his sentence. Is it equal? Not equal.
But Zhao Changpeng had no choice, because he had realized that the war between individuals and the government was an unequal one. On November 21, Zhao Changpeng came to the United States to surrender after reaching an agreement. He pleaded guilty, resigned, and paid the money.
This is the largest settlement agreement involving criminal charges against corporate executives in U.S. history. The former richest Chinese man finally got a lot of money, and the media all praised the U.S. government's achievements. Zhao Changpeng looked lonely, but at least he kept his freedom.
According to the agreement, he should be able to return to the UAE to wait for news. But Zhao Changpeng was stopped before he left. On November 24, the United States tore up the agreement and banned him from leaving the United States.
Zhao Changpeng felt a chill in his heart. The worst outcome had happened. He finally understood that this was a trap from the beginning to the end. Because he couldn't tear up the agreement, but the United States could.
Although the hope was slim, Zhao Changpeng and his lawyer protested: "We will return to the UAE and will not run away."
The U.S. Department of Justice was very excited when they heard this. They had just torn up the agreement, but now they were standing on the moral high ground and started to criticize.
"Changpeng Zhao's crime was not a parking ticket, but rather the equivalent of mass murder and mayhem."
"His enormous wealth and special citizenship in a country that does not extradite makes Zhao Changpeng a legitimate flight risk."
Weren't you good at hiding before? If you go back to the UAE and hide again, what should we do? Just reading these words, I can imagine the smug look on the face of the Ministry of Justice.
Moreover, this is not the end. In the original agreement, Zhao Changpeng's sentence would only be 12 to 18 months. But after he paid the money, he immediately received a super double.
A court document revealed that the Department of Justice lawyers clearly revealed that the US government might argue that Zhao Changpeng should be sentenced to 10 years in prison at the time of sentencing. From one year, directly to ten years. Zhao Changpeng knew that this was naked blackmail. It was obvious that they saw that your family was big and they wanted to get more gold coins.
Zhao Changpeng sighed. He was now completely a fish on the chopping board, at the mercy of others. After all this, he still couldn't keep anything. He had already resigned from all his positions and was about to become a prisoner and ATM of the United States.
Although Binance was saved on the surface and a new CEO was appointed, its internal documents, data and backend were all exposed to the United States. The so-called "decentralization" and the so-called faith have become a joke.
In a cool novel, the protagonist can be invincible all the way. But this is reality, no matter how brilliant the richest man is, he can't compete with a boss of another level.
7. Endgame
On April 23, 2024, prosecutors submitted a sentencing memorandum to the court.
The prosecutor used harsh words, pointing directly to Zhao Changpeng's subjective intent: Binance grew in the "Wild West" model (the pioneering era of rampant crime in the western United States), and "the business decisions made by Zhao Changpeng are the best way to acquire users, develop companies, and fill wallets in violation of US law."
Prosecutors believe that the 18-month sentence is "insufficient to reflect the seriousness of Zhao's crimes." The memorandum emphasizes that "Zhao has reaped huge rewards for violating U.S. law, and the cost of this violation must be huge" in order to "deter others who attempt to build wealth and business empires by violating U.S. law."
As a national lawsuit, the tone of the U.S. Department of Justice's recommendation also matched it: "The United States recommends that the court sentence him to 36 months in prison, which is above the standard of the U.S. Sentencing Guidelines." Before the verdict, the prosecution requested a sentence twice the standard. In the eyes of the outside world, this was the final pressure.
Zhao Changpeng's side quickly "retaliated". Shortly after the release of this memo, Zhao Changpeng's apology letter to Judge Chad Jones and 161 joint letters of appeal began to circulate online. These letters were actually completed in February 2024, when the prosecution might seek a higher sentence.
In the letter, Zhao Changpeng expressed his hope for a suspended sentence. He apologized again and took full responsibility.
His regret also overflowed from the paper: "Words cannot explain how much I regret the choices I made, which led me to appear in court (for trial)." At the trial on April 30, he said "I'm sorry" and he wanted to be responsible for the "mistake", but before stepping down as CEO, he had done everything possible to promote compliance and cooperate with the US government.
He said at the trial that he wanted to create an online education platform for poor children. In his previous appeal letter, he also mentioned that after leaving the cryptocurrency circle, the blockchain + biomedicine industry is his next goal.
161 joint appeal letters, including those from family, friends, political and business leaders, colleagues, industry experts, Binance angel investors, Binance users, etc.
On the morning of April 30th local time, the former "richest Chinese man" Zhao Changpeng was sentenced to four months in prison by the Seattle Federal Court in the United States for failing to comply with anti-money laundering regulations.
Before hearing about the trial, Zhao Changpeng, who was wearing a blue suit and a light blue tie, was very nervous. The media at the scene described him as "sitting on pins and needles." After all, the maximum sentence in the plea agreement he signed with the Ministry of Justice in November last year was 18 months. On April 23, shortly before the trial, the Ministry of Justice raised its request for a sentence to three years.
The court did not immediately detain Zhao Changpeng. After the verdict, Zhao Changpeng posted on social media to thank all parties for their support and said he "will focus on the next chapter of his life: education."
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