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"Fortune" Dialogue with CZ: Binance is about to announce the address of its headquarters

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Changpeng Zhao revealed that he bought an apartment in Dubai last September and moved his family there from Singapore.

Original title: "He became as rich as Mark Zuckerberg virtually overnight. How Binance founder 『C.Z.』Zhao became a $74 billion man while moving fast and breaking things in crypto"

Original source: Vivienne Walt , Fortune

Original compilation: biscuit, chain catcher

In London's trendiest hotel, slender CZ Wearing a dark blue suit and white shirt, he looked unremarkable to the waiter. So while he was having breakfast with the other millionaires, the waiter ushered him into a deserted corner of the restaurant, and for the next hour the cryptocurrency mega-billionaire remained low-key.

If Mark Zuckerberg walked in for coffee, he would be instantly recognized by the waiter. Admittedly, CZ unlike Zuckerberg, is virtually unknown outside the crypto industry. However, the 44 year-old Binance founder and CEO is worth as much as Zuckerberg. Bloomberg estimates that CZ has a net worth of $96 billion. While that figure has fluctuated wildly with the crypto market, reaching just $74 billion in late March, it still makes him one of the richest people on Earth. CZ seems confused by the idea that wealth should impress others. "If they think I'm worth that much, so be it." CZ told me, "This is a fictional pricing."

For those who knew him, CZ was at the apex of an industry that had the potential to revolutionize the economy. No matter what technical indicators are used for assessment, he reached the top at lightning speed. Since founding Binance in 2017 , built it from nothing into the world's largest cryptocurrency exchange, which now has approximately 100 million users. According to the company, Binance has significantly more trading volume than any other platform, with a staggering $34.1 trillion in total trading volume in 2021 the crypto boom year of 2021. Commissions are charged. Sources inside Binance say the company is now worth around $300 billion based on trading volumes and fees, as well as the cryptocurrency's projected growth rate, nearly six times the market capitalization of rival Coinbase.

Therefore, the fact that CZ is an invisible rich man also surfaced. Today, cryptoassets with a market capitalization of approximately 2 trillion US dollars are joining the mainstream of the global economy. The most obvious sign is 3 9 On March 9 , President Biden issued an executive order requiring every government department in the United States to urgently draft proposals for the integration of encryption technology into the world's largest economy.

For cryptocurrency executives like CZ , Biden's order is their long-awaited stamp of approval Means the chance to get out of all the regulatory hassle. Binance has been accused of ignoring the rules and exploiting consumers to grow, so the regulatory risk is high. At the beginning of March, the night before our London meeting, CZ attended a wine reception with UK government officials and lawmakers, presenting a good corporate image to the leaders of the country that currently bans Binance from operating.

Even CZ 's professional attire has also changed. Or Polos shirts. It's a costume change process for a rebel who's cueing the world to be legal. (CZ 's only tattoo is a Binance logo on his right forearm)

For CZ , earning respect is not The only challenge. As digital assets become more ubiquitous and more competitors emerge, can Binance maintain its dominance as both traditional and emerging financial institutions enter the space. It is hoped that the nature of cryptocurrencies can change from a speculative investment to something constructively beneficial to the world.

“People are investing in crypto because it looks new and cool,” CZ said over breakfast. But added, "It's like the Internet 20 years ago: it's slow, e-commerce doesn't work, and there's no social media." CZ believes this will change, and the encryption industry will eventually change several status quo. He is determined to let Binance play a leading role in the process, in part because he owns a lot of early Binance shares. (CZ and the company will not disclose how many shares of Binance he owns, but estimates are as high as 90%.)

In the month of 2 In its first equity subscription, Binance invested $200 million in Forbes, and CZ hopes to launch cryptocurrency products within the brand. "We're looking at every area: gaming, social media, e-commerce," he said. "If you take a business and combine it with cryptocurrency, you will find that cryptocurrency will provide stronger financial financing capabilities."

< p id="ufcef81fe">All of this sounds incredible. For years, crypto assets have been traded on the fringes of the financial world. Then came the bull market, when millions of people stayed home and found ways to use their savings to invest and boost their side income. It's easy to get sucked in by get-rich-quick crypto stories (and Musk's tweets), and investors are jumping on board. Traditional financial institutions have turned from cautious to welcoming. For example, PayPal began accepting cryptocurrency payments last May and Visa now issues credit cards linked to cryptocurrencies.

The growth rate of cryptocurrencies has broken the rules of finance and opened up gray areas where startups can thrive. CZ Profit by creating a simple business model. When 2017 launched Binance, his idea was to create a crypto supermarket for ordinary people, whether they had 10 $ or millions of dollars to invest.

Five years on, Binance implements 482 digital Token and its own cryptocurrency BNB The trading market will be converted to 82 legal currencies. Binance also has 1.6 million Million users buying NFTs, which are digital versions of real-world unique creations, on its exchange platform. Bloomberg estimates that Binance's revenue more than tripled last year, from $5.5 billion in 2020 to about $20 billion in 2021, much of it from transaction fees. "Their success is not accidental," said Chris Brendler , senior equity analyst for fintech at investment services firm D.A. "They have the best technology, the best platform, and the best execution."

What Binance does not have is the security of financial instruments And checks and balances, which might explain why CZ wears jackets instead of sweatshirts. "We're talking to all the regulators now," he said, "and we're addressing issues we had before."

How simple is Binance? said a 15 year-old crypto investor from Paris. "I heard about encryption when I was 11 or 12 ," Hadrien Giral-Ghattas told me. Two years ago, Hadrien borrowed 500 €500 € from his parents, registered a Binance account using his mother's identity information, and invested the money in cryptocurrencies, including Bitcoin, whose value has risen nearly in two years ;700%. He also spent 120 euros on a wallet, a secure storage disk to protect his crypto holdings. Now, instead of cash for pocket money, Hadrien uses the black Binance credit card (with his own name on it) and gets 2% cashback on purchases, a perk not too great in France. Many people know. "The evolution of the crypto world is amazing," he said.

At Hadrien 's age, CZ 's life has changed dramatically. He grew up in a rural village in Jiangsu Province, China. His father was a university teacher who was exiled from the big city because of his bourgeois tendencies. "We have rationing," he said, "and if you want to buy meat, you get a ticket to buy meat."

1989 , CZ 's father is studying for a Ph.D. in Vancouver. Taking advantage of the chaotic moment, the mother wandered outside the Canadian Consulate in Beijing with her two children. They lined up and circled the block several times, taking turns waiting for 36 hours before they were issued visas to reunite their families.

Moving to Vancouver was a whole new world for 12 year-old CZ . "My first time drinking fresh milk," CZ marvels. "My high school was great." He got his first taste of making money, earning $3.50 an hour working at McDonald's and $12.60 an hour as a volleyball referee. He also worked night shifts at Chevron gas stations.

As a software developer, CZ worked for many years in Tokyo and New York, where he was involved in Bloomberg Development of trading software. Back in China in 2013, I heard about Bitcoin while playing poker with my friends. On their advice, he sold his apartment in Shanghai and invested $1 million in cryptocurrencies. Daming Zhu , a poker buddy and venture capitalist, recalled that when CZ first started Binance, "we didn't know what he was doing. But he was very persistent." Zhu at his friend's startup Invested around 1 million RMB (approximately 157,000 US) - "the best investment I've ever made".

At the time, Bitcoin transactions took days or even weeks to complete. "We shortened the response time, hopefully within an hour," recalls CZ . Response from individuals and “retail” traders was overwhelming, and usage of the site exploded with the rise of cryptocurrencies (see chart below).

Fintech analyst Brendler The rapid growth is attributed to excellent online infrastructure, functionality and market liquidity. He believes that CZ takes advantage of the unregulated nature of cryptocurrencies, "Before the rules are made, we can do whatever we want." This includes the rapid introduction of new technologies in the market without waiting for regulatory licenses. By comparison, Coinbase is a $40 billion market cap company founded in the U.S. by 5 years before Binance, Brendler Dominance, it often "deals" with regulators.

CZ also expressed willingness to relocate Binance's headquarters, depending on how crypto-friendly the location is. Binance has long had employees spread all over the world, and the existence of its headquarters has been a topic of controversy. When CZ founded the company in 2017 July July, the registered address was Hong Kong. A few weeks later, China banned cryptocurrency trading. CZ himself then moved to Japan and then to Singapore; the current registered address of the parent company Binance Holdings Ltd. is the Cayman Islands.

But CZ 's wandering career may end soon, and the pressure from the regulatory authorities is a big one s reason.

Cryptocurrency has always been a headache for the world’s financial police because it has no borders, is detached from fiat currency, and traditional banks have no fiat business. Criminals often use cryptocurrencies in drug dealing, ransom payments and money laundering. Ponzi schemes are so common, said Amy Lynch, president of FrontLine Compliance, an asset management consulting firm in Rockville, Md., that "regulators weren't prepared for the speed of the market," she said.

As regulators press hard on cryptocurrencies, many look to Binance, and CZ has another fight with the government conflict. Last year, the U.K. and Japan warned Binance that it could not offer trading services to their citizens without a license. So did Thailand and filed criminal charges against Binance. Currently, Binance is prohibited from advertising its business in these countries.

Binance is also gaining attention for its hosted products. In early 2021, it began offering trading in so-called stock Tokens, encrypted assets pegged to the value of traditional stocks. This drew the ire of regulators in several countries, with Binance withdrawing and delisting the tokens in July. In September, U.S. officials launched an insider trading investigation into Binance.US to investigate whether U.S. entities or employees used user data to profit from trading orders.

At the heart of many of the officials’ complaints is Binance’s lack of a permanent office address. The UK's Financial Conduct Authority, for example, said the company's "global geographic presence" made it impossible to regulate. Paris-based international arbitration lawyer Aija Lejniece believes that CZ 's frequent change of office address is tantamount to "jumping to avoid jurisdiction", in order to allow Binance to conduct business in areas with the most relaxed regulations.

Lejniece is a Binance user. In May 2020 in May the Binance platform crashed due to the volatility of Bitcoin, which made ;Lejniece lost millions of dollars. Noting that Binance's controversial terms of service, which require arbitration to take place in Hong Kong, are inconvenient, she said, "I think CZ just thinks it's cool." She also said that when something goes wrong, users can't Contacted Binance customer service - partly because Binance doesn't have a headquarters. (The exponential growth of cryptocurrencies "occasionally creates a technical bottleneck, a risk that is clearly stated in the platform's terms of service.")

For all the complaints and concerns, CZ and Binance's response boils down to: we're working on it. Last fall, after doing much of its public relations via Twitter , the company hired its first PR executive, whose deputy told Fortune that Binance is ready to "become a more licensed, regulated company." enterprise".

CZ since last year, Binance has included hundreds of legal compliance consultants out of a total of about 5,000 employees . It hired a former U.S. Treasury Department investigator to help Binance more closely address concerns about money laundering and other crimes (another frequent government concern).

At breakfast, CZ said he had told regulators in several countries that he would announce a "Proper Head Office Address". In mid-March, Binance finally obtained its first virtual asset service provider licenses from Bahrain and Dubai, neither of which has income tax requirements. Last September, CZ bought an apartment in Dubai and moved his family there from Singapore. "We don't hide anywhere," CZ told me, "in fact, we participate everywhere."

When When I asked what it was like to be unfathomably rich, CZ said he couldn't understand it either. Billions were accumulating faster than he could adapt. "I went from an entrepreneur to a man with tens of billions of dollars," he said, noting that he bought the suit four years ago for about 300 Not a luxury brand timepiece. While you can try to trust his opinion, there are some facts to be aware of: The hotel suite he stayed in cost $2,000 a night.

As hypocritical as it sounds, CZ Cryptocurrencies can also be confusing. CZ doesn't quite understand some ultra-highly priced digital assets, especially NFT. When I said I was crazy about investors spending millions of dollars on digital art, he said, "I think people may have lost their minds."

This view may help explain why CZ invested in Forbes, an opportunity to prove that encryption can have utility. CZ said the publication's crypto strategy may include selling NFT of articles and rewarding subscribers with blockchain Token . "They may not even need the advertising business anymore," he said. “If this works, guess what? All other media businesses have to go into crypto too.” The publication will showcase the business potential of cryptocurrencies and serve as an example of Binance's investment strategy. Still, six weeks after investing in Forbes, CZ has yet to announce other crypto investments. What remains to be seen is whether the Forbes reporter will remain independent, with Binance suing the publication over a report that questioned its business strategy.

Since his father recently passed away from leukemia, he has become more philosophical. "We should do everything we can to have a positive impact on society," he added, adding that even for those with untold digital wealth, "life is fragile."