Binance: who is the billionaire ‘king of cryptocurrencies’ accused of creating ‘cheating network’ in the US

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Changpeng Zhao, who founded Binance in 2017, denies the allegations. Changpeng Zhao, Founder of Binance, Is Accused of Participating in an ‘Extensive Network of Cheating’ GETTY IMAGES Changpeng Zhao rose to prominence when one of the world’s biggest cryptocurrency scandals came to light in 2022. The founder of Binance, the largest trading platform of digital currencies in the world, made headlines in November 2022, after announcing that it was considering buying competitor FTX, which was collapsing. But Zhao soon changed his mind and just watched as his competitor collapsed, dragging cryptocurrencies into a resounding slump that lingers to this day. Eventually, FTX went bankrupt, and its founder, Sam Bankman-Fried, was indicted by the US court on criminal charges. This is how, after the collapse of FTX, Zhao became the new “king of cryptocurrencies”. But within months, US authorities brought charges against the company he runs, alleging that the company operated illegally in the country and violated a series of financial laws. Trying to navigate the stormy waters, Binance continued its operations without major scares until, on Monday (5/6), the authorities again accused the company and its founder. This time, the US Securities and Exchange Commission (SEC) sued the company and Zhao for violating the country’s investment laws. Binance is the world’s largest cryptocurrency platform GETTY IMAGES “Through 13 counts, we allege that Zhao and Binance entities have engaged in an extensive web of deceit, conflicts of interest, lack of disclosure and calculated evasion of the law,” said SEC Chairman Gary Gensler. Zhao in turn denied the allegations on Twitter and said his company had yet to see the allegations. ‘My mother and I left China’ Known in the media as Changpeng “CZ” Zhao, the businessman was born in the Chinese province of Jiangsu in 1977. Son of teacher parents, Zhao told in a blog post on Binance the problems his family faced in China in the 1980s—and how he fled the country at age 12 after the Tiananmen Square massacre. Zhao was born in Jiangsu Province, China, in 1977 GETTY IMAGES “On August 6, 1989, my mother and I left China and migrated thousands of miles to Canada. For those who know China’s history, that was two months ago. after the events of June 4, 1989,” Zhao wrote. “I remember the queue outside the Canadian embassy lasting three days,” he commented on the blog. “It changed my life forever and opened up endless possibilities.” Zhao spent his teenage years in Vancouver, where he worked a variety of jobs, including making hamburgers at McDonald’s. He later studied computer science at McGill University in Montreal and then interned at the Tokyo Stock Exchange before joining Bloomberg Tradebook in New York. A few years later, Zhao returned to China to work in tech companies, and in 2017 he founded Binance. But the Chinese government banned cryptocurrency platforms from operating in the country – and Zhao migrated again, consolidating his business in other latitudes. Binance grew and quickly became the largest cryptocurrency buying and selling platform in the world. ‘Extensive web of cheating’ But problems along the way were not long in coming. British authorities banned Binance operations last year; while in the US, the first legal investigation was opened against him for alleged illegal operations in the country. The latest known development is the lawsuit filed last Monday in federal court in Washington. The SEC accuses the company and its founder of mishandling user funds and lying to investors and regulators, among other alleged wrongdoings. Zhao said he had not yet seen the allegations GETTY IMAGES The lawsuit alleges the company ignored US securities laws and made billions of dollars by putting its clients’ assets at “significant risk”. The legal action also indicates that Binance and Zhao secretly control their customers’ assets, which allows them to merge and divert funds, and that the company created separate US entities “as part of an elaborate plan to circumvent federal securities laws. US furniture.” Authorities allege that from at least September 2019 to June 2022, Sigma Chain, a trading company owned and controlled by Zhao, engaged in operations that artificially inflated the trading volume of cryptocurrency securities. on the Binance platform. “The public should be careful about investing any of their hard-earned assets in illegal platforms,” ​​advised SEC Chairman Gary Gensler.

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