After overcoming countless obstacles, Binance has stepped into a new era

Binance Triumphantly Enters a New Era After Prevailing Over Countless Obstacles

Zhao Changpeng is an entrepreneur and the founder and CEO of Binance, the world’s largest cryptocurrency exchange platform. In November 2023, he announced his resignation as CEO of Binance, sparking industry attention. This article will review the story of Zhao Changpeng and Binance, from its founding to his resignation.

2017: The Birth of Binance

Zhao Changpeng’s entrepreneurial journey was not smooth. He was once a software engineer at the New York Stock Exchange and later founded a software company called Fusion Systems, providing high-frequency trading systems for financial institutions.

In 2013, he came into contact with Bitcoin and began investing in and developing cryptocurrency-related projects. He had previously joined the Bitcoin wallet Blockchain.info and cryptocurrency exchange platform OKCoin, but left both due to disagreements with partners.

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In July 2017, Zhao Changpeng founded Binance, a centralized cryptocurrency exchange platform based on blockchain technology. Binance raised $15 million in funding through an Initial Coin Offering (ICO) and issued its own token, BNB (Binance Coin). Binance’s main features are supporting multiple cryptocurrencies for trading, providing fast and secure services, and offering low transaction fees. Binance also introduced an innovative model where users can pay transaction fees with BNB instead of other currencies to enjoy more discounts and incentives.

Binance developed rapidly, becoming the world’s largest cryptocurrency exchange platform within a few months, with a daily trading volume of over $1 billion and a user base of over 3 million. Zhao Changpeng also became a cryptocurrency star and was named one of the world’s richest cryptocurrency billionaires by Forbes magazine.

2018: Challenges for Binance

Binance’s success did not make Zhao Changpeng stop. He continued to expand Binance’s business and influence.

He established branches and partnerships in multiple countries and regions globally, including Japan, Singapore, Malta, Jersey, and Uganda.

In addition, he launched Binance Academy, an online platform providing cryptocurrency and blockchain education. He also invested in multiple cryptocurrency and blockchain-related projects and companies such as TravelbyBit, Trust Wallet, and WazirX.

However, Binance’s rapid growth also faced some challenges and difficulties.

In March 2018, Binance experienced a large-scale hack, resulting in some users’ accounts being compromised and manipulated, leading to a loss of 7,000 BTC. Although Binance detected and stopped the attack in time, preventing user losses, it also exposed security vulnerabilities.

In September 2018, Binance received a warning from the Japanese financial regulatory authority for not being registered in Japan and not complying with relevant laws and regulations. Binance subsequently closed its operations in Japan and moved to Malta, a cryptocurrency-friendly country.

In October 2018, Binance was investigated by the US Securities and Exchange Commission (SEC) for allegedly offering some cryptocurrency products and services without SEC approval. Binance denied these allegations and stated that it would cooperate with the SEC and comply with US laws and regulations.

2019: Binance’s Innovation

In 2019, Binance continued to demonstrate its innovative capabilities and spirit. In April 2019, it launched Binance DEX, a decentralized trading platform based on the Binance Chain, allowing users to trade cryptocurrencies directly on the blockchain without the need for centralized exchanges.

He also launched Binance US in July 2019, a compliant cryptocurrency trading platform specifically tailored for the US market and users, in partnership with BAM Trading Services. In September 2019, Binance Futures was introduced, a platform for trading cryptocurrency futures contracts, enabling users to engage in higher-risk and higher-reward trades using leverage and margin.

But that’s not all! In November 2019, Binance unveiled Binance Card, a debit card that allows users to make payments using cryptocurrencies at over 46 million merchants worldwide.

Binance also achieved significant accomplishments and honors in 2019. In June 2019, Binance’s CEO, Changpeng Zhao (CZ), was received by the Prime Minister of Malta, Joseph Muscat, recognizing Binance’s contributions and influence in Malta.

In August 2019, CZ was named one of Fortune magazine’s “40 Under 40” most influential business leaders. In October 2019, he was recognized as one of TIME magazine’s “100 Most Influential People” globally.

2020: Binance’s Expansion

In June 2020, Binance launched the Binance Charity Foundation, a nonprofit organization dedicated to using blockchain and cryptocurrencies to provide solutions for global social and environmental issues.

Binance also faced new challenges and competition in 2020.

It faced regulatory pressures from multiple countries and regions, including the United States, United Kingdom, Japan, Germany, Singapore, Canada, Brazil, and more. These countries and regions placed different requirements on Binance, such as registration, licensing, compliance, reporting, taxation, etc. Binance had to adjust its business model and strategy to adapt to different legal environments and market demands.

Binance also faced fierce competition from other cryptocurrency trading platforms, such as Coinbase, Huobi, OKEx, FTX, and more. These platforms also constantly innovate and expand, offering more products and services to attract more users and funds. To maintain its leading position, Binance continuously introduced new features and promotions, such as Binance Earn, Binance Loans, Binance Mining, Binance NFT, and more.

2021: A Year of Abundance

In January, Binance launched Binance Smart Chain (BSC), a blockchain platform compatible with Ethereum, aiming to provide a faster, cheaper, and more flexible environment for decentralized application (DApp) development. BSC quickly attracted a large number of users and developers, becoming one of the popular platforms in the DeFi and NFT fields. Tokens on BSC also witnessed tremendous growth, such as CAKE, BAKE, BNB, and more.

In March, Binance announced its plan for the Binance NFT Marketplace, a platform that would offer high-end and low-end NFT markets to cater to the demands of different types of creators and collectors. The Binance NFT Marketplace was officially launched in June, introducing a range of NFT projects in areas including sports, music, art, gaming, and more.

In May, Binance faced scrutiny and warnings from regulatory bodies in various countries, including the UK, Japan, Canada, Germany, Singapore, and others. These regulatory bodies accused Binance of providing unauthorized financial services within their jurisdiction, such as securities, derivatives, leveraged trading, and more. Binance responded by stating that it has been cooperating with regulatory bodies, complying with local laws and regulations, and striving to enhance its compliance standards.

In July, Binance announced a series of reform measures to address regulatory pressures, including limiting the leverage trading multiples for its users, delisting certain derivative products, increasing Know Your Customer (KYC) requirements, establishing multiple regional compliance entities, and more.

In September, Binance completed the acquisition of CoinMarketCap, one of the most popular cryptocurrency data and information platforms globally. Binance stated that the acquisition aimed to provide better services and experiences to users while maintaining CoinMarketCap’s independence and neutrality.

2022: The Beginning of a Bear Market

In January, Binance launched the Binance NFT Marketplace, a platform focused on high-end and scarce NFTs, distinct from the previous Binance NFT platform. The goal of the Binance NFT Marketplace is to become the world’s largest NFT trading platform, offering users the highest quality and most unique NFT artworks.

In March, Binance partnered with Visa to launch the Binance Visa Card, a debit card that allows payments with cryptocurrencies. Users can convert their cryptocurrencies to fiat currencies through their Binance accounts and spend them at over 60 million Visa merchants worldwide. The Binance Visa Card also provides various benefits and rewards, such as cashback, discounts, airdrops, and more.

In June, Binance suffered a hack due to a vulnerability, with founder Changpeng Zhao stating that the affected amount was approximately $100 million. According to reports, hackers exploited a vulnerability in Binance’s “cross-chain bridge” (BSC Token Hub) and stole a significant amount of Ether (ETH). Changpeng Zhao mentioned that Binance had initiated emergency measures, suspended all transactions, and committed to compensating all affected users.

2023: The End of the CZ Era

On February 5th, Binance announced the upgrade of Binance Smart Chain 2.0, a blockchain platform based on Ethereum 2.0 that offers higher performance, lower fees, more functionalities, and better compatibility. Binance Smart Chain 2.0 also introduced sharding technology, dividing the network into multiple subnetworks to improve throughput and scalability.

On June 5th, the SEC filed 13 charges against Binance and its founder Changpeng Zhao, including operating an illegal trading platform in the United States, operating unregistered exchanges, broker-dealers, and clearing agencies, misusing customer funds, and conducting unregistered securities issuance and sales, among others. Binance denied these charges and expressed its willingness to cooperate with the SEC by providing the required information and documents.

On August 25th, Binance launched Binance Metaverse, a virtual reality platform based on Binance Smart Chain 2.0, aiming to provide users with an immersive digital world for exploration, creation, socializing, and trading. Binance Metaverse integrates various Binance services and products, such as Binance NFT, Binance Cloud, and Binance Coinbase Card.

On November 21st, Binance reached a settlement agreement with the SEC for over $4 billion to conclude the investigation. The settlement includes guilty pleas and fines for money laundering, fraud, violation of sanctions, as well as a series of restrictions and requirements regarding Binance’s operations and compliance.

On November 22nd, Changpeng Zhao admitted to criminal charges of money laundering and violating U.S. sanctions, including facilitating transactions with Hamas and other terrorist organizations. Binance agreed to plead guilty to the criminal charges and pay a fine of over $4.3 billion. In the disclosed document, Binance was charged with three offenses, including violating anti-money laundering regulations, conspiring to conduct unlicensed money transmitting business, and violating U.S. sanctions regulations. Binance will pay a criminal fine of $1.8 billion and forfeit $2.5 billion. The $4.3 billion fine includes $3.4 billion to be paid to the U.S. Treasury Department’s Financial Crimes Enforcement Network and $968 million to be paid to the Treasury Department’s Office of Foreign Assets Control.

Subsequently, Changpeng Zhao announced on Twitter in a lengthy post that he had resigned as CEO of Binance. While emotionally not easy to let go, I know it is the right choice. I made mistakes, and I must take responsibility. This is the best outcome for our community, Binance, and myself. Binance is no longer a baby; it’s time for it to run on its own. I know Binance will continue to thrive.

Meanwhile, I am pleased to announce that Richard Teng, former CEO of the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority, Chief Regulatory Officer of the Singapore Exchange (SGX), and Chief Financial Officer of the Monetary Authority of Singapore, will be appointed as the new CEO of Binance. With over 30 years of experience in financial services and regulation, Richard will lead the company through the next period of growth. He will ensure the safety, transparency, compliance, and growth of Binance in the next stage. “

In addition, the internal letter released by Zhao Changpeng stated: “Thank you all for your warm and caring words, but what’s more important is to keep this ship flying. Due to the overwhelming amount of messages I’ve been receiving, I won’t be able to reply to each one individually.

So, I’ll just say it here. For me, this has definitely been a tough day, going through this unfamiliar process with a complete (12-hour) time difference and not being able to use my phone for most of the day in court.

I just want to say that I’m proud of the work you’ve done today, in the past, and for the future. Binance will be fine. I will have to endure some pain, but I will get through it. Even though there might be some structural changes, we will overcome this challenge. Looking back in a few years, maybe this won’t be such a bad thing. Nonetheless, I need to take a break. Now I understand, you guys need to continue working hard and not complain about me being lazy. Please help Richard Teng transition into his new role. We’ll meet at the conference, where I will say a few words, and then hand it over to Richard.”

Other institutional parties also expressed their opinions on this matter.

According to Matrixport’s latest report, with Zhao Changpeng stepping down and the fine amount being lower than the previous concerns of $10 billion, Binance is likely to remain one of the top three exchanges in the next 2-3 years. There might be pressure to “rationalize” the company with its 6,000 employees. Although this plea agreement does not include the US SEC, it is a highly favorable outcome for Zhao Changpeng and Binance itself. Some might argue that US institutions are cleaning up the industry this year by shutting down banks associated with US cryptocurrency, as two of those banks operated an internal ledger that crypto companies could use around the clock to transfer fiat. It can be said that only a few (considered) major players are left, and the market is digesting a major risk-aversion event.

More exchanges will strengthen their compliance plans and become part of a monitoring-sharing agreement, which will help in the approval of a Bitcoin ETF in the US. With this plea agreement, expectations for a Bitcoin ETF based on spot prices may have risen to 100%, as the entire industry will be forced to comply with the rules followed by traditional financial companies.

More importantly, this industry whitewash will strengthen institutional investors’ case for adopting Bitcoin and may make Bitcoin a safe haven asset in investors’ portfolios.

The co-founder of Cobo & F2pool, DiscusFish, posted on the X platform: “The regulatory agreement reached between the US Department of Justice and Binance clears the path for ETFs. Thanks to Zhao Changpeng for his outstanding contributions to the industry. Let’s explore the infinite possibilities of DeFi together with Zhao Changpeng.”

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