Binance CEO Changpeng Zhao (CZ) has published a blog post responding to allegations that Binance is a Chinese company.
For context, Binance has three major ties to China:
- CZ lived in China as a child, and as an adult, he conducted significant business with many Chinese people throughout his career.
- Binance has served Chinese customers in the past and did not delist all Chinese Yuan-denominated trading pairs on its exchange until 2021.
- The early whitepaper of Binance Coin (BNB) was released in two languages: English and Chinese.
Although Protos has covered the career of CZ in depth, Binance’s new blog post reveals little-known details about the origins of the massive exchange (if Binance is reporting true transaction volume numbers, it’s by far the world’s largest crypto exchange).
CZ reveals new details about the early days of Binance
CZ lived in China as a child, then moved to Canada. Eventually, he moved back to China after completing his education and founded an exchange-as-a-service company called Bijie Tech in 2015. Bijie Tech served at least 30 clients, including platforms where customers could trade art and collectibles. These exchanges existed before the NFT fad; most items were physical pieces like baseball cards.
CZ founded Binance in 2017 but soon after, China’s crackdown on digital asset exchanges saw him, his company, and a number of its employees leave the country.
Many journalists have questioned whether Binance truly exited China or stopped serving Chinese customers. For years, Binance famously globe-hopped staff through a series of offices in different countries.
Who is Binance’s Chinese representative Guangying Chen?
One of the employees who left China when Binance exited was Guangying Chen. Zhao initially hired her as an office manager for Bijie Tech. As a Binance worker who never relinquished her Chinese citizenship, she became Binance’s listed legal representative in China. Zhao claims that she currently holds a management position overseeing administration and clearing teams.
CZ claimed that he did this for regulatory reasons since China is often unfriendly toward foreign nationals — even those born in China (CZ maintains that he’s still a Canadian citizen).
However, the arrangement caught the attention of the media. Some journalists spread speculation that Guangying Chen was more than a representative — perhaps an owner — of Bijie Tech or Binance. CZ denies these claims while Binance communications director Patrick Hillman claimed that Chinese media fabricated allegations that Chen is the true founder of Binance.
CZ claims that Chen currently lives in Europe for her safety and is not a Chinese agent nor an owner of the companies he founded.
Jacob Silverman maintains his position on Binance allegation
CZ directly called out Jacob Silverman for angering him with the question, “Who is Guangying Chen?” CZ mischaracterized Silverman as a Washington Post journalist (he is actually just a freelance contributor), yet Silverman has publicly responded to CZ’s accusations.
Silverman cited Chen’s name on Binance corporate documents and her senior role at Binance. Silverman questioned why a person he described as a “back-office assistant” would serve as a legal representative instead of another, more appropriate employee, such as a lawyer.
Silverman alleges that Guangying Chen is listed as President of a company named Sigma Chain AG, a market maker on Binance.US. The SEC started investigating Sigma Chain AG in February 2022.
Silverman also referenced Forbes’ leaked “Tai Chi document” in which Binance.US was allegedly part of a complicated effort to appear compliant with US regulations. Binance denied most of the allegations in that article then sued Forbes and personally named the co-authors of that article as defendants. Over two months later, it quietly dropped its lawsuit after instilling terror in those defendants.
How much business did Binance conduct in China?
On August 27, 2017, Binance publicized Alexa analytics indicating that nearly 20% of its website visitors resided in China. It also claimed to have passed 120,000 registered users, with half of them taking at least one action on Binance on any given day.
In 2021, Binance denied that Chinese crypto traders could still access its exchange. However, an investigation indicated that they could take actions like moving bitcoin from the then-Chinese-friend Huobi exchange to Binance.
CZ continues to vehemently deny allegations that Binance is still a Chinese company. He’d also prefer people to call him Canadian.