CEO Binance Changpeng Zhao revealed details of the creation and development of the Bitcoin exchange. He responded to the discussion about rivals’ use of the claim of a close link between the platform and Chinese authorities, which they spread through the media.
In August, an analyst known as FatMan said that his trusted sources confirmed information about FTX’s campaign of black PR against the platform.
A verified source has confirmed that FTX’s PR firm, M Group Communications, has been contracted to release negative media articles about competitor exchange Binance. Hired journalists are given access to a «black book» of anti-Binance contacts & references for research.
— FatMan (@FatManTerra) August 24, 2022
Binance’s chief of public relations Patrick Hillmann weighed in on the debate. Jacob Silverman, a former journalist for the Washington Post, asked him who Guanyin Chen is.
I have written one story for the Washington Post about Binance. It’s the biggest crypto exchange in the world. There’s a lot to write about. I am also reporting on FTX and many other crypto industry players.
While I have you here, who’s Guangying Chen?
— JacobSilverman.shill (@SilvermanJacob) August 25, 2022
Zhao noted the rising number of defaming attacks on the company in recent times. He acknowledged that they face this not only in the media but also behind closed doors at meetings with politicians.
Zhao explained that the aim of such campaigns is to undermine trust in the brand and weaken the ability to attract new partners and investors. The attacks themselves are becoming increasingly sophisticated, such as the one linked to CryptoLeaks.
Such actions undermine trust in the entire industry. Binance itself does not intend to respond in kind, as it focuses on building the world’s largest crypto exchange and, more broadly, a Web3-company, he said.
According to Zhao, employees at many firms have similar profiles, with a predominance of people of Asian descent.
“Over the past two years as the company has aggressively expanded into top management, Europeans and Americans have come to predominate. Overall, the staff is globally distributed around the world. But many still stubbornly call the platform a “Chinese company,” not implying anything good,” — the top executive lamented.
He noted the challenges he faces given the explosive growth of an industry still in its infancy. Among them are expanding the team and improving the system so that a five-year-old company operates as a well-established institution with a two-hundred-year history.
Binance was founded in July 2017, but Zhao had already returned to Shanghai in 2005 with two Americans, two Britons and one Japanese, where in those years he founded various IT startups.
Zhao considers himself Canadian. After the events at Tiananmen Square his family emigrated to Canada when he was 12. He then studied at McGill University and worked at Bloomberg, after which he decided to try entrepreneurship.
The Binance CEO recalled that, as a foreigner, he had to pay 25% tax when buying a condominium in Shanghai, which he later sold to purchase his first cryptocurrency.
“Without the tax I could today have 25% more Bitcoins,” Zhao mused.
Two years before Binance, Zhao and partners founded Bijie Tech, which provided an Exchange-as-a-Service platform to other exchanges (artworks and collectibles such as stamps, baseball cards).
According to him, the business was going well, but two years later the Chinese authorities banned the activities of their clients.
On July 14, 2017 Zhao, together with Bijie Tech alumni, decided to found a Bitcoin exchange. This occurred during a bear market, triggered by regulators in Japan and South Korea.
On September 4 of that year the Communist Party demanded the shutdown of cryptocurrency platforms. As a result the Binance CEO and the team were forced to leave China.
In the early days employees worked remotely, but the question of opening a head office never disappeared from the agenda. The COVID-19 pandemic effectively cemented the model. Zhao stressed that even Coinbase, which has a Nasdaq listing, does not have a headquarters.
The aforementioned Guanyin Chen was invited to Bijie Tech to work as the company’s legal representative. He called this “usual practice” for foreigners working in Shanghai like him because of regulatory constraints.
Chen, like Zhao and the Binance team, was forced to leave the country. The status of legal representative became ground for conspiracy theories that she owns Bijie Tech and Binance, which is not true.
Chen had to endure attacks from the media, including Chinese outlets, and haters on social networks, which led her to move to one of European countries for a “calmer life with her family.” Zhao expressed regret that she still has to deal with this.
According to the Binance CEO, Chen currently heads the administrative and clearing teams of the organization. Zhao stressed that she does not own the platform and is not a secret agent of the Chinese government.
The top executive stressed that Binance cannot be called a “Chinese company” either.
“Binance has never been incorporated in the Middle Kingdom. We also do not operate as a Chinese company in cultural terms. We have subsidiaries in many countries, including France, Spain, Italy, the UAE and Bahrain (and these are only some of them). We have no legal entities in China, and we do not plan to open any,” he explained.
Zhao lamented that, because of his ethnic Chinese background and the presence of people from the mainland in the Binance staff, Binance is an easy target for the media and even politicians who “hate our industry.”
“I am a Canadian citizen, period. My heritage or emigration from China should not be a red letter you wear for the rest of your life. It does not grant freedom to spread defamation, make false claims, or question anyone’s loyalty to their country,” Zhao concluded.
Reuters reported earlier this week that U.S. authorities requested the Binance CEO’s records for money-laundering investigations.
In July, Zhao filed a lawsuit against Bloomberg Businessweek, accusing it of defamation.
Two years earlier, the Bitcoin exchange made similar allegations against Forbes.
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