Now, as chief executive officer of Binance, the world’s biggest cryptocurrency exchange, he’s trying to get more people to use a global form of money and says his company—which booked more than $800 million in revenue last year—doesn’t need a headquarters. Zhao spoke to Bloomberg Markets in early March from Shanghai about his career and the growth prospects of crypto and his company. He also responded to critics who question Binance’s regulatory compliance. His comments were edited for length and clarity.
(After the interview, Bloomberg News, citing people familiar with the matter, reported that the U.S. Commodity Futures Trading Commission is investigating whether Binance violated the CFTC’s rules by allowing U.S. residents to place wagers on derivatives. Binance hasn’t been accused of misconduct, and the investigation may not lead to enforcement action. Zhao wouldn’t comment beyond saying that Binance works with regulators and takes its compliance obligations “very seriously.”)
OLGA KHARIF: Can you talk a little bit about your early years, starting in China?
CHANGPENG ZHAO: My family has been always a little bit nomadic. My mom is an elementary and high school teacher, and my dad was in a master’s student-plus-teacher type of role. He eventually became a professor [with a Ph.D.]. And so, as I can remember, I always lived on campus, in either high school or in a university. I did move around a lot. Even in China, my parents were moving between different cities.
OK: Why did your family move to Canada?
CZ: My father went through the Cultural Revolution in China. They canceled all the university classes. They sent all of them back to the countryside to learn the real ways of life. He didn’t take a single class. And then finally the Cultural Revolution was over, and everyone was applying to go overseas to study. So my father applied and got accepted by the University of British Columbia. That was in 1984. So between 6 and 12, I didn’t get to see my father that much. In 1989 we finally got a family visa to visit my dad. My mum took me and my older sister to Vancouver, and we just stayed.
OK: How did you end up studying computer science when you got to college?
CZ: My dad bought a 286 computer, probably when I was 12 or 13. He paid C$7,000 [$5,570] for that 286 computer. Back then it was a huge, huge portion of our household savings. My dad always says that’s the most expensive computer, or thing, he has ever bought. So I was playing really basic games on my computer, and I really liked it. My dad is a programmer, so he can write code. He’s a geophysicist. He understands math very well. He programs in Fortran, Pascal, C, etc. So I got exposed to that relatively early. I wasn’t doing anything serious. When I was 16 to 17ish, I took a couple of programming courses in high school and really liked them.
At [McGill] university, I applied for an internship at a software company in Montreal doing virtual-reality markup language like HTML. In the early days they were using CGI computer stations. In year three I got an internship in Japan, and that was the first programming job related to trading. The firm in Japan was doing outsourced work for the Tokyo Stock Exchange and some of its members. So they were doing trading systems.
I didn’t know what fintech or financial trading systems were. What attracted me was that the job was in Tokyo. I very soon learned, wait for a second, there’s a lot of money flowing through these systems, just a huge amount of money. So I never left that industry afterward.
OK: How did you go from there to working on crypto trading systems?
CZ: In 2013, Bobby Lee, who was the CEO of BTC China, and his investor [Ron Cao, then at Lightspeed China Partners] brought this concept up at a friendly poker game. They said, ‘CZ, you should convert 10% of your net worth into Bitcoin because there’s a very small chance it will go to zero and you will lose that 10%. There’s a high chance it will go 10x, and then you would double your net worth.’ And I was like, well, that’s a pretty serious proposition.
So I downloaded the Bitcoin white paper. Back then, there wasn’t a whole lot of educational content online. There was bitcointalk.org, which is a forum. I read the white paper. I understood it pretty quickly, coming from a technology background. I also had my personal private keyway before, in 1998. So I understand public keys, private keys. And what I really liked about Bitcoin back then, and even now, is it’s borderless. It’s maintained by the network. You can transfer money from any country to any other country, not limited by any person or intermediaries. Having lived in a lot of different countries, every time I had to convert money, I would lose a lot.
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