BINANCE'S CHANGPENG ZHAO: “I'm not using crypto to buy fiat, I'm not using crypto to buy houses. I just want to keep crypto ”
Bloomberg Markets|April - May 2021
Changpeng Zhao, 44, has spent his life trying to overcome borders. As a child growing up in China, he waited for years until his family could win permission to see his father in Canada, then pursued a career (including a few years at Bloomberg LP) that took him around the world.
OLGA KHARIF

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.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM BLOOMBERG MARKETSView All

Jonathan Kellner Has Big Money Backing His U.S. Stock Trading Startup

When he was handed a debit card with $70 million in the bank, Jonathan Kellner realized his startup was different. ¶ Members Exchange, known as MEMX, started as a protest by banks and market makers against the rising data and connectivity fees charged by U.S. stock exchanges. In the two years since Kellner, 52, signed on as chief executive officer, MEMX Holdings LLC has locked in more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley. ¶ Since it went fully live in October, MEMX has clinched 1% of the U.S. market share. Kellner, previously the CEO of Nomura Holdings Inc.’s Instinet, spoke with Bloomberg Markets in February about launching during a pandemic and the surge in meme stocks.

5 mins read
Bloomberg Markets
April - May 2021

BINANCE'S CHANGPENG ZHAO: “I'm not using crypto to buy fiat, I'm not using crypto to buy houses. I just want to keep crypto ”

Changpeng Zhao, 44, has spent his life trying to overcome borders. As a child growing up in China, he waited for years until his family could win permission to see his father in Canada, then pursued a career (including a few years at Bloomberg LP) that took him around the world.

10+ mins read
Bloomberg Markets
April - May 2021

Big Oil's Secret World Of Trading

With the future of fossil fuels in doubt, some energy companies are counting on a hidden army of commodity traders to ride to the rescue

10+ mins read
Bloomberg Markets
April - May 2021

Who Should Set The Rules?

TWO OF THE MOST powerful women in finance are at odds over how to use their power.

6 mins read
Bloomberg Markets
April - May 2021

If You Want to Know What Stock Is Set To Skyrocket, There Are Options

WHAT DO NIKE INC., Raven Industries, and Fortinet Inc. have in common? They exemplify the predictive capacities the options market offers: Recent stock price spikes were preceded by certain telltale signs in the options market, according to data compiled by Bloomberg. Use the terminal to generate ideas for enhancing your portfolio and profit from ever-changing option trading trends.

3 mins read
Bloomberg Markets
February - March 2021

How Are You Doing? AID Provides the Answers

“HOW’M I DOING?” That’s a question asset managers, sales professionals, and all of us, for that matter, ask daily.

2 mins read
Bloomberg Markets
February - March 2021

Volatile Markets Reveal Interesting Credit Opportunities in Energy

OIL ROSE ALMOST 50% from the end of October 2020 through mid-January.

4 mins read
Bloomberg Markets
February - March 2021

Colonies of Retail-Investor ‘Ants' March On Korea's Stock Market

IN LATE JULY, 70-year-old Kim Kyung-rok began frantically sifting through his long-dormant stock brokerage account.

6 mins read
Bloomberg Markets
February - March 2021

Examine How Market Upheaval Is Affecting Company Results

The coronavirus pandemic sent huge waves of volatility through markets in 2020. How did that affect the financial results of companies that interest you?

3 mins read
Bloomberg Markets
February - March 2021

Get the Insider Scoop at Newly Public Health-Care Companies

Last year was a good year for at least one thing: initial public offerings in the U.S. With the frenzy of listings of special purpose acquisition companies, or SPACs, IPOs raised a total of $154 billion in 2020. That total was by far the largest of the past 10 years, and more than double the total from 2019, according to data compiled by Bloomberg.

2 mins read
Bloomberg Markets
February - March 2021
RELATED STORIES

Reincarnation And Realpolitik

China, India, and the U.S. are vying to influence the selection of the next Dalai Lama

5 mins read
Bloomberg Businessweek
April 19, 2021

DEADLY WUHAN COVER-UP!

U.S. health officials untangling how virus escaped secret bio lab

4 mins read
National Enquirer
April 19, 2021

US, CHINA CONSULTED ON SAFETY AS THEIR CRAFTS HEADED TO MARS

As their respective spacecrafts headed to Mars, China and the U.S. held consultations earlier this year in a somewhat unusual series of exchanges between the rivals.

1 min read
Techlife News
Techlife News #492

CHINA CUTS TAXES TO SPUR SEMICONDUCTOR DEVELOPMENT

China announced tax breaks this week to spur growth of its semiconductor industry following U.S. sanctions that alarmed the ruling Communist Party by cutting offaccess to American processor chips for tech giant Huawei and some other companies.

1 min read
AppleMagazine
AppleMagazine #492

CYBER ATTACK TIED TO CHINA BOOSTS DEVELOPMENT BANK'S CHIEF

The cyberattack crested just as finance officials from across Latin America were descending on Washington to commemorate the 60th anniversary of the Inter-American Development Bank.

7 mins read
AppleMagazine
AppleMagazine #491

ENCRYPTED MESSAGING APP SIGNAL BLOCKED IN CHINA

Encrypted messaging app Signal appears to have been blocked in mainland China, the latest foreign social media service to cease working in a country where the government tightly controls the flow of information.

2 mins read
Techlife News
Techlife News #490

An Industrial Policy With U.S. Characteristics

Biden’s $4 trillion Build Back Better plan faces plenty of hurdles beyond Republicans

7 mins read
Bloomberg Businessweek
March 15, 2021

Where EVs Aren't Only For the Affluent

Rural China has become ground zero for the democratization of electric-vehicle ownership

4 mins read
Bloomberg Businessweek
March 15, 2021

China's Big Chill

Following its crackdown on star capitalist Jack Ma, entrepreneurs grow cautious

5 mins read
Bloomberg Businessweek
March 15, 2021

China, Russia Agree To Build Lunar Research Station

China and Russia said they will build a lunar research station, possibly on the moon’s surface, marking the start of a new era in space cooperation between the two countries.

2 mins read
AppleMagazine
March 12, 2021