How honest is CZ?
2 min readTwo lawsuits, many allegations – one person: Changpeng Zhao (“CZ” for short) is on trial in the USA. The founder of Binance is said to have lied to the US authorities for years and systematically broken the law. That’s what the financial regulators CFTC and SEC claim. The world’s richest crypto billionaire denies all claims. But how trustworthy are his statements? A look into the past.
1. Pre-Binance price manipulation
Even before joining Binance, CZ was caught lying. Crypto expert Markus Thielen documents this in his book “Crypto Titans: How Trillions were made and Billions lost in the Cryptocurrency Markets”, which was published in May 2023. Three years prior to founding Binance, CZ worked at OKCoin, a popular US crypto exchange. At that time, allegations arose that the platform used bots to manipulate the prices of the coins and the volume. CZ dismissed these during his time as a collaborator on Reddit.
He then left the exchange in 2014, saying it “uses dubious methods.” Later, in an argument with his former boss on social media, he became clearer: the audit of OKCoin, the first Proof of Reserve in history, was “fake”. CZ is also accused of price and market manipulation on Binance by the SEC.
2. First deny, then downplay: the TaiChi documents
BinanceUS. is a “web of deception,” claims SEC chief Gary Gensler. Among other things, he refers to the TaiChi documents, first published by Forbes in 2020. According to them, Changpeng Zhao has pursued a perfidious plan: build a US platform that will be sold as independent and regulated. But behind the scenes, CZ pulls the strings and the laws continue to be broken.
When Forbes published the article containing the TaiChi documents, Changpeng Zhao tweeted that they did not exist and sued the magazine. Two years later he admitted that this strategy document existed. However, he would never have signed it. Two anonymous employees who are said to have attended the meeting contradict CZ to Reuters. He has since deleted the earlier tweet.
3. The Mystery of “Heina” Chen
Treasurer of Binance, CZ’s close confidant and long: a well-kept secret. In the US financial regulator SEC’s lawsuit against the Binance crypto exchange, one name keeps appearing in key places: Guangying “Heina” Chen. Her identity – a mystery. She is supposed to be responsible for the company’s finances in the background – all bank accounts. CZ only admits that it exists at all in September 2022 when asked by a reporter in a blog post. There he explains: She only “oversees” Binance’s “administration and clearing team”.
According to the SEC lawsuit, Guangying “Heina” Chen controls a network of Binance companies. It has processed $148 billion in deposits and withdrawals since 2019. She is said to have paid out at least $32 million to herself. Chen also oversaw purchases for CZ, including $55 million for a private jet and $11 million for a yacht, according to the SEC.
