The Washington PostDemocracy Dies in Darkness

This enigmatic billionaire just took down a crypto rock star

Led by Changpeng Zhao, Binance will absorb Sam Bankman-Fried’s company, capping a colorful human drama

Binance Holdings CEO Changpeng Zhao on Nov. 2 in Lisbon. (Zed Jameson/Bloomberg News)
6 min

Though similar of mission and bank account, Binance’s Changpeng Zhao and FTX’s Sam Bankman-Fried have long been strikingly opposite figures in the murky world of cryptocurrency.

The buzzed-cut Gen X-er and bushy-haired Young Millennial. The behind-the-scenes operator and the conference-happy performer. The head of a quiet global powerhouse and chief of a shiny Super Bowl-advertising upstart.

The billionaires who run the two largest crypto trading platforms have set themselves apart from one another at every turn, often acidly.

That rivalry reached a surprise conclusion on Tuesday. Not long after Zhao posted a tweet criticizing FTX’s crypto tokens and lobbying efforts, Bankman-Fried unexpectedly announced that Binance probably would acquire FTX. “I’m sorry I didn’t do better,” Bankman-Fried later wrote in a letter to investors obtained by independent journalist Eric Newcomer.

On Wednesday, the two largest cryptocurrencies — bitcoin and ethereum — dropped 10 percent and 12 percent respectively, deepening a decline that began on Tuesday after the FTX deal was announced.

The maneuver takes Zhao — CZ, as he’s widely called by industry insiders — from an influential figure who’s little known by the general public to the crypto world’s undisputed king.

Is crypto a house of cards? A look behind the scenes of the unstable industry.

Born in the late 1970s in China, Zhao immigrated to Vancouver with his family at age 12 and spent his formative years in North America. After attending Montreal’s McGill University, he worked at financial-tech companies, often in Asia, for much of his 20s and 30s.

A Binance spokesperson reached by The Washington Post was unable to immediately provide a comment from Zhao.

Part of his origin story, as he has told it, involves a 2013 meeting with ethereum founder Vitalik Buterin at a Las Vegas conference. It led Zhao to quit his job and commit fully to crypto. He launched Binance in the summer of 2017, on the hunch that crypto could become a broadly accessible investment and also earn the platform ample commissions.

Binance quickly became the busiest crypto exchange in the world, riding bull markets in 2017 and again in 2020-2021 as retail investors poured into the space. Though Zhao regularly came into conflict with regulators — authorities in Malta and Malaysia, where Binance was operating, said the company was not licensed there — Binance has fended off rivals to grab a market share above 70 percent, according to an industry publication.

Along the way, Zhao also became a Twitter celebrity to scores of crypto enthusiasts, amassing more than 7 million followers and setting the template for the modern crypto executive — as brassy in his opinions as he is murky about his business. (It is a full inversion, observers have noted, of how chief executives traditionally act.)

Zhao would often tweet his feelings on the market and engage in memestock banter, comparing his hairline to a crypto symbol. But he regularly deflected even basic corporate-governance questions, such as where his company was based. “We don’t have a clear place where we can go by most people’s normal definitions of a headquarters that we can call a headquarters,” he said this summer.

He has also fashioned himself as a crucial ally to other tech moguls. Binance’s $500 million check helped Elon Musk buy Twitter, where Zhao expects to have a key voice as the site shapes its policy.

But FTX has been a roadblock on Binance’s magic pony ride. Co-founded by Bankman-Fried in 2019, the company also capitalized on a strong market during the pandemic, becoming the second-largest crypto platform behind Binance. And FTX grabbed many more headlines, with ads featuring Tom Brady and Stephen Curry, a Super Bowl spot with Larry David, and branding deals with the Miami Heat and Major League Baseball. Bankman-Fried often jetted around the world to appear onstage with world leaders, his down-market look a kind of Mark Zuckerberg hoodie for the new web age.

Zhao has nowhere near such rock-star status. He did initially invest in FTX but later sold his stake and proclaimed a split from Bankman-Fried’s company. Since then, Zhao has occasionally aimed sharply worded attacks at his rival.

“We won’t pretend to make love after divorce,” he tweeted this weekend of Bankman-Fried. “We won’t support people who lobby against other industry players behind their backs,” a reference to the FTX chief working on a crypto regulation proposal that hardcore crypto people see as a betrayal because it opens the door to some regulation.

Zhao also compared FTT, the crypto token associated with FTX, to Luna, the disgraced token that cratered in the spring, and said he had moved to sell nearly $600 million of them. It was not an idle troll: The move appeared to sow panic, as investors traumatized by Luna’s earlier crash rushed to sell, driving down the value of Bankman-Fried’s company.

Yet for all his swagger, Zhao has sometimes sounded a victim-like note. In a September blog post he wrote of “disdain” heaped by critics upon his company’s employees. “Binance’s executive team is now more heavily dominated by Europeans and Americans,” he wrote, but “some people insist on calling us a ‘Chinese company.’ ”

Among those critics was Bankman-Fried, who 10 days ago took a shot at Zhao’s alleged China ties by tweeting “Uh, he is allowed to go to D.C. right?” The tweet was later deleted.

How Zhao will deploy his power as the man who now strongly controls the way many people buy and sell crypto is unclear.

“He’s a mystery figure, certainly here in Washington,” Reena Aggarwal, director of Georgetown University’s Psaros Center for Financial Markets and Policy, told The Washington Post. “We know what Sam was doing, which is working with lawmakers and regulators. We don’t know what CZ will do.”

One of the few things that is known, experts say, is that the drama is unlikely to abate.

“Fans of the series ‘Game of Thrones,’ will recognize the quote ‘Chaos is a ladder,’ ” the crypto commentator Alex Valatis wrote on Twitter on Monday. “Both CZ & SBF know the game that they are playing. And will do anything they can do to climb.”