The World’s Largest Crypto Fortune Started in a Friendly Game of Poker

Bloomberg — The Abu Dhabi Grand Prix (Abu Dhabi Grand Prix) attracts world-famous princes, movie stars and sportsmen to Yas Island every year, the entertainment center located about 30 minutes from the city center.

Among them, last month, there was a figure that is experiencing an unusual rise: a former McDonald’s burger guy (MCD) and software developer who, practically overnight, has become one of the richest people in the world: cryptocurrency pioneer Changpeng Zhao.

CZ, as it is known to cryptophiles, is fast becoming a fixture in the United Arab Emirates, meeting with royalty in Abu Dhabi who are eager to bring their Binance platform to the country, according to people with knowledge of the situation.. He bought an apartment in Dubai and has hosted dinners near the Burj Khalifa, the world’s tallest building, and on the city’s Palm Jumeirah island, which makes him the most prominent personality in the country’s burgeoning crypto scene.

In a region known for its dizzying wealth, Zhao, 44, fits the bill: His net worth is $96 billion., according to the index Bloomberg Billionaires. It’s the first time that Bloomberg He calculates his fortune, which surpasses Asia’s richest person, Mukesh Ambani, and competes with tech titans like Mark Zuckerberg and Google (GOOGL) founders Larry Page and Sergey Brin.

Zhao’s fortune could be much higher, as the wealth estimate does not consider his personal holdings of cryptocurrencies, which include bitcoin (XBT) and your own company token. Binance Coin, now called BNB, has shot up around 1,300% in the past year.

Binance’s success underscores the enormous wealth being created in the unfettered cryptoverse, even with recent declines, but controversy has swirled around the company.

Banished from China, where it was founded, the company is facing regulatory investigations around the world. The Justice Department and the US Internal Revenue Service are investigating whether an entity Zhao controls, Binance Holdings Ltd., is a conduit for money laundering and tax evasion, according to people with knowledge of the matter.. Spokesmen for the Justice Department and the Internal Revenue Service declined to comment.

Binance’s future may depend on whether it can reconcile with the world’s regulators and find a welcoming place to set up its headquarters..

For now, though, the money is pouring in.

Binance generated at least $20 billion in revenue last year, according to an analysis of Bloomberg of your trading volume and commissions. That’s almost triple what Wall Street analysts expect Coinbase Global Inc. (COIN), a publicly traded firm with a market value of $50 billion, to raise in 2021.

“Coinbase might look like the 800-pound gorilla from a US perspective, but Binance is significantly bigger,” said DA Davidson & Co. analyst Chris Brendler.

Zhao declined to comment for this article, and Binance disputed the accuracy of the estimates. Bloomberg on the market value of the company and its net worth.

“Cryptocurrencies are still in their growth stage,” Binance said in a statement.. “They are susceptible to higher levels of volatility. Any number you hear one day will be different from the number you hear the next day.”

A month before seeing Formula 1 stars Lewis Hamilton and Max Verstappen race at the Yas Marina circuit, Zhao spoke at the Bloomberg New Economy Forum in Singapore, where he broke down the figures behind the meteoric rise of the firm he created in 2017.

In a recent 24-hour span, Binance made $170 billion in transactions. On a really slow day, he said, it’s about $40 billion. and that’s more than just $10 billion two years earlier.

In the world of cryptocurrencies, these figures are gigantic. Binance routinely facilitates as many transactions as the next four largest exchanges combined.

When Erik Schatzker of BloombergAsked the billionaire about his wealth during the November interview in Singapore, Zhao was reticent. “I don’t care about wealth, money, rankings,” he said..

The skinny cryptocurrency entrepreneur, wearing rimless glasses and a slightly exaggerated striped tie, He added that these issues are a distraction and that he is willing to give away almost his entire fortune before he dies..

Whether Zhao can keep what he has earned remains to be seen, and he has every reason to be concerned about his company’s rampant growth.

In addition to the investigation by the Department of Justice and the Internal Revenue Service, the Commodity Futures Trading Commission (CFTC) is investigating potential market manipulation and insider trading within Binance and whether it illegally allowed US clients to trade cryptocurrency-linked derivatives, according to people familiar with the matter. The CFTC declined to comment.

Binance has also been the subject of consumer warnings in the UK, Japan, and Germany, among other countries.. On December 30, a Canadian securities regulator reprimanded the company for informing users of its trading platform that it was authorized to continue operating in the country when it did not yet have a registration to do so.

A Binance spokesperson said that the company is “working with regulators around the world and we take our compliance obligations very seriously”.

Zhao has said that he welcomes, and wants, the regulation.

“I am not an anarchist”, he said in the forum of Bloomberg. “I don’t think human civilization is advanced enough to live in a world without rules”.

Fortunes built on crypto have skyrocketed along with the value of digital tokens, which stood at $2.09 trillion as of Jan. 7, compared to US$135 billion three years ago.

Zhao, a Canadian citizen, was born in the Chinese province of Jiangsu. His father, a university professor, went into exile in the countryside during the Cultural Revolution and, when he was 12, moved the family to Vancouver.

Exposed to technology at a young age, Zhao later studied computer science and ended up landing jobs in finance in Tokyo and New York., including a period of four years in Bloomberg LP, the parent company of Bloomberg News.

His path to crypto riches began in Shanghai in 2013 during a friendly poker game with Bobby Lee, then CEO of BTC China and investor Ron Cao, who encouraged him to invest 10% of his assets in bitcoin.

After spending some time studying it, he took the plunge and ended up selling his apartment for bitcoin.. In 2017, he founded Binance (a portmanteau of the words binary and finance) and quickly blossomed into a crypto powerhouse. Zhao even got the company logo tattooed on his arm.

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This article was translated by Andrea González

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The World’s Largest Crypto Fortune Started in a Friendly Game of Poker