Changpeng Zhao (CZ): The History of Binance and Its Founder

Changpeng Zhao, known as CZ, founded Binance in July 2017 and built it into the world's largest cryptocurrency exchange by trading volume within a year. In November 2023 he pleaded guilty to a single US Bank Secrecy Act violation and resigned as chief executive. He was sentenced to four months in April 2024, completed the sentence that September, and received a presidential pardon in October 2025.

1. Who Is CZ? From Trading Systems to Crypto Exchanges

• Background & Experience: Zhao was born in Jiangsu province, China in 1977 to two schoolteachers, and emigrated with his family to Canada in 1989, settling in Vancouver. As a teenager he worked at a McDonald's and a gas station to help support the household. He studied computer science at McGill University in Montreal, then took an internship in Tokyo building order-matching software for a subcontractor of the Tokyo Stock Exchange, followed by four years at Bloomberg Tradebook developing futures trading software. In 2005 he moved to Shanghai and founded Fusion Systems, which built high-frequency trading systems for brokers. He first heard about Bitcoin in 2013 while playing poker with Bobby Lee, who advised putting ten percent of his assets into it; Zhao instead sold his Shanghai apartment and converted his savings. He then joined Blockchain.info as its third team member and head of development, and served briefly as chief technology officer of OKCoin.

2. Major Contributions: Building Binance

• Major Contributions:
  • Founding Binance (July 2017): The exchange launched with an initial coin offering that raised $15 million, and trading opened eleven days later. Its differentiators were speed of listing new assets, low fees, and an interface aimed at active traders rather than first-time buyers. Bloomberg reported in March 2018 that it had become the largest exchange by trading volume in under eight months.
  • BNB and the exchange token model: Binance Coin was issued in 2017 as a utility token giving holders trading fee discounts, with a scheduled burn of supply. It established a template that most large exchanges copied, and it later became the gas token for Binance's own chains.
  • Relocating out of China (2017): When Chinese authorities banned domestic cryptocurrency exchanges in September 2017, Binance moved its operations offshore. The company operated for years without a declared global headquarters, an arrangement Zhao publicly defended as a feature of a borderless business and which regulators later treated as a compliance problem.
  • BNB Chain (2019-2020): Binance Chain launched in 2019 and Binance Smart Chain, an Ethereum-compatible chain with low fees, followed in 2020. During the 2020-2021 boom it absorbed a large share of retail decentralized finance activity that Ethereum's fees had priced out.
  • SAFU and the 2019 hack response: In 2018 Binance began allocating a portion of trading fees to the Secure Asset Fund for Users. When attackers took roughly 7,000 BTC from a hot wallet in May 2019, customer losses were covered from that fund, and the practice of maintaining a disclosed insurance reserve spread across the industry.
  • The FTX trigger (November 2022): After a CoinDesk report on Alameda Research's balance sheet, Zhao announced on November 6, 2022 that Binance would liquidate its holdings of FTT, FTX's exchange token. The announcement accelerated a withdrawal run on FTX. Binance signed a non-binding letter of intent to acquire FTX on November 8 and withdrew it the next day after reviewing the books.

3. CZ's Place in Blockchain History

• Impact Assessment: Binance made cryptocurrency trading a global retail product. Its scale, listing speed, and fee structure set the market's operating standards for years, and its chain gave the 2020 boom a low-cost venue at the exact moment Ethereum was congested. The company's legal resolution in 2023 was equally consequential in the other direction: it established that a crypto exchange operating at global scale would be held to the same anti-money-laundering obligations as a bank, and the $4.3 billion penalty remains among the largest corporate resolutions in US Treasury and Justice Department history.
• Key Perspectives: Zhao has consistently argued that adoption comes before regulation and that the industry's job is to build usable products first. He has also said that nearly all of his liquid net worth is held in cryptocurrency rather than fiat, and after leaving Binance he directed his public activity toward Giggle Academy, a nonprofit providing free basic education.

4. The 2023 Charges and What They Were

• Controversies & Criticisms:
  • The regulatory sequence: The US Commodity Futures Trading Commission sued Binance and Zhao in March 2023, and the Securities and Exchange Commission filed its own suit in June 2023. The criminal resolution came on November 21, 2023.
  • What Zhao pleaded guilty to: One count of failing to maintain an effective anti-money-laundering program, a violation of the Bank Secrecy Act. He paid a $50 million personal fine and resigned as chief executive, with Richard Teng succeeding him. Binance separately pleaded guilty, agreed to pay $4.3 billion, and admitted to operating an unlicensed money transmitting business and violating the International Emergency Economic Powers Act. Zhao was not charged with fraud, and the government did not allege misappropriation of customer funds.
  • The sentence: In April 2024 a federal judge in Seattle sentenced Zhao to four months in prison, far below the three years prosecutors requested. He served at a federal facility in Lompoc, California and was released on September 27, 2024.
  • The pardon: On October 23, 2025 the White House announced that President Donald Trump had granted Zhao a full and unconditional pardon, with the press secretary describing the prosecution as part of the previous administration's approach to the crypto industry. The Wall Street Journal and The New York Times had reported during 2025 on Binance's lobbying expenditure and on a campaign for clemency, and separately on Binance's business dealings connected to the Trump family. Asked about the pardon on 60 Minutes on October 31, 2025, Trump said he did not know Zhao and had acted on recommendations.
  • "CZ was convicted of stealing customer funds": He was not. The distinction between the Binance case, which concerned compliance failures, and the FTX case, which concerned misappropriation, is frequently collapsed in summaries of 2023.

5. Timeline and Current Status

• 1977: Born in Jiangsu province, China.

• 1989: Emigrates to Canada; later studies computer science at McGill.

• 2005: Founds Fusion Systems in Shanghai.

• 2013-2014: Discovers Bitcoin; works at Blockchain.info and OKCoin.

• July 2017: Launches Binance; raises $15 million in an ICO.

• September 2017: Moves operations out of China.

• 2019-2020: Launches Binance Chain and Binance Smart Chain.

• November 6-9, 2022: Announces the FTT liquidation; signs and withdraws a letter of intent for FTX.

• November 21, 2023: Pleads guilty; resigns as CEO; Binance agrees to a $4.3 billion penalty.

• April 2024: Sentenced to four months in prison.

• September 27, 2024: Released.

• October 2025: Receives a presidential pardon.

• April 2026: Publishes a self-written memoir, with royalties directed to Giggle Academy.

• Current Status & Future: Zhao lives in Abu Dhabi, no longer holds an executive role at Binance, and remains one of its largest shareholders. Since 2024 his public work has centered on Giggle Academy and on advisory roles, including as an adviser on digital assets to the government of Kyrgyzstan, reported in 2025. Forbes has ranked him among the wealthiest people in the world throughout this period.