CZ and Binance: The Man Who Built Crypto's Biggest Empire

**Caemin** (0:10)
Morning, folks, and welcome to today's episode called CZ and Binance, the man who built crypto's biggest empire. Like, this is a guy who grew up in a village in rural China with no running water. And today, he's worked $110 billion.
I examine his relationship with Sam Bankman Fried and his subsequent involvement in the multi-billion dollar collapse of Bankman Fried's company, FTX.
I also look at how he tried to keep Binance away from any type of regulation. And this ultimately led him to serve time in jail. But then, very controversially, he got a presidential pardon. It is a cracking story. Enjoy.
So, Changping Zhao, I'm sure I'm butchering that, but he's known as CZ to everyone. He's born in 1977, just one year after the end of Mao's Cultural Revolution. So, this was a decade-long campaign that destroyed the lives of China's educated classes, professors, doctors, scientists. They were more or less stripped of their positions, and then they were sent to the countryside for re-education. And his father was one of these. He was a university physics professor, which is why CZ grows up in Xiong Hu. And again, I'm probably butchering that, but this is a village in rural China with no running water or gas. Then in 1989, after the Tiananmen Square crackdown, the family moved to Canada, and they were living near the University of British Columbia because his father was completing a geophysics doctorate there. And money was always tight. His mother worked as a seamstress to make ends meet. But despite this, his father spent $7,000 Canadian dollars on an IBM computer, and he used it to teach his son basic programming. Now, by the time he's 14, CZ is working at a gas station, laid at NICE, he's also working at McDonald's, and he's achieving very well academically because he comes 10th in Canada's national mathematics competition. 1995, CZ then enrolls at McGill University in Montreal to study computer science. And throughout his youth, down at college, he flies very much under the radar. There's not much information on his early years. But then after graduating, he goes to Tokyo because he lands a job building what traders call a matching engine. So this is software that automatically payers, buyers and sellers in the market and executes trades really fast because every millisecond matters. The faster the system, the more valuable it is to banks, hedge funds and trading firms. And CZ is obviously very, very good at what he does because next, he gets poached by Bloomberg in New York. He's promoted three times within two years. And in terms of what he was like back then, his boss at Bloomberg said that CZ was a smart software technologist with excellent people skills. And he also added that he's not the classic Wall Street asshole and not the classic technology sociopath. So a pretty nice guy overall. But like every born entrepreneur, CZ, he's itching to go out on his own. And so in late 2005, he leaves Bloomberg, goes to Shanghai and co-founds Fusion Systems. This is a company that builds high frequency trading platforms for major brokerages. And Fusion got a reputation for building some of the fastest high frequency trading systems. And while I wasn't able to get any actual revenue figures for the company, it's clear that CZ and Fusion Systems was doing very well because CZ was able to afford a $1.1 million apartment in Shanghai. So business must be good. But then in September 2013, everything changed for CZ. This is when he meets a few guys at a poker game and they tell him about Bitcoin. So for some context, Bitcoin at this stage was just four years old, and each coin traded at $140 in 2013, when CZ first heard about it. Now, most investors dismissed Bitcoin as a niche, internet curiosity, it had little chance of challenging the traditional financial system. It was really seen as a fringe experiment for libertarians, programmers or speculators. Now, at this poker game, CZ is advised to put around 10% of his net worth into Bitcoin, but he goes off, does his own research. He downloads a Bitcoin wallet, and this is a quote from him.
After the first Bitcoin transaction, I was amazed. It was the same feeling as when I first used a water pump, when I first saw a light bulb, and when I first sent and received an email, I knew right there and then, the blockchain is the new technology for money.
And so, he doesn't just put 10% in, he goes all in. He resigns from Fusion Systems, sells his Shanghai apartment, and puts all of his money into Bitcoin. Now, for context again, there was a rally on Bitcoin during 2013, so by the time CZ invests, it's about $600.