It is not new that Binance has been the subject of several theories around the world, especially when it enters a new country. Given the size of the world’s largest exchange, the entry of Binance usually implies almost immediate market dominance. This even happened in major economies like Brazil, where Binance dominated 45.06% of cryptocurrency trading volume in August. However, the spotlight made the exchange the target of several news stories, many of them of dubious authenticity. Faced with this scenario, Binance CEO Changpeng “CZ” Zhao wrote a long text published on the company’s blog. In the text, shared with CriptoFácil on Thursday (1), Zhao demystifies several points, among them the company’s alleged relationship with China. He claimed that Binance is not a Chinese company and that the conspiracy theories of a Chinese official who secretly runs the business are false. Zhao also accuses his critics of using this association to practice xenophobia and try to stigmatize the company.
Table of Contents
CZ’s history with China
First, Zhao begins by explaining his relationship with China. Naturally, the CEO does not deny his ancestry with the Asian country, where he lived with his parents until he was 12 years old. However, the CEO explains that the family fled to Canada on August 6, 1989. The escape took place two months after the famous Tiananmen Square Massacre, which took place in Beijing on June 4, 1989. The event featured several students protesting against the Chinese government, which even used tanks to contain the demonstrations. Zhao’s parents were teachers, which made them potential targets for the government. Faced with the climate of danger, the family decided to migrate to Canada. “It usually took four years to get a passport, and another two to three years to get a Canadian visa if we were lucky. But after the incident, the Canadian embassy opened and gave us visas quickly (…) It changed my life forever and opened up endless possibilities for me,” Zhao wrote.
The embryo of Binance
Zhao says he lived in Canada for 16 years until he returned to China in 2005. Ten years later, in 2015, he started an exchange-as-a-service (EaaS) service. However, the Chinese government ended all these exchanges in March 2017, forcing Zhao to close the company. Next, Zhao dedicated himself to creating Binance, which had its official launch in July 2017. However, the Chinese government imposed a similar unilateral ban on cryptocurrency exchanges operating in China on September 4 – just a month and a half after the start of activities. As a result, this forced Binance to adopt a remote work model and leave China. Therefore, Zhao claims that the company has no connection with the country. “Binance was never incorporated in China. Nor do we culturally operate as a Chinese company. We have subsidiaries in many countries including France, Spain, Italy, the United Arab Emirates and Bahrain (to name a few). But we don’t have any legal entity in China and we don’t have any plans to do so. Today I believe it is critical to clarify these facts,” he said.
The Guanying Chen Controversy
According to the CEO, one of the employees who worked for him at his first company – Bijie Tech – was Guanying Chen, a Chinese citizen. Therefore, Zhao appointed her as the company’s legal representative in China due to restrictive laws in the country at the time. To operate in China, the company must have a Chinese citizen as its legal representative, which Zhao is not. At this point, the CEO reiterates that he is a Canadian citizen and was thus targeted by the Chinese government. “As her name is listed in early Bijie Tech documents, Binance detractors took the opportunity to spread a conspiracy theory that Guangying was secretly the owner of Bijie Tech, and possibly even Binance.” explained the executive. Zhao denied both facts. Many recent news articles, including one published by Fortune magazine on Monday (August 29), have suggested that Binance is deeply connected to China. In this regard, the article specifically suggested that Binance could be banned in India, as was the case with the TikTok app, due to being “led by people of Chinese origin”. Zhao said that Chen was forced to leave China in 2017, but that many Chinese outlets still spread “conspiracy theories” about her. Today, Chen oversees Binance’s administration and clearing team and lives in a European country. “As we’ve grown over the past five years, many of the original employees and founders have taken on new roles within the company. Guangying currently oversees the company’s management and compensation team. To conclude, she does not own Binance and is not a secret agent of the Chinese government,” Zhao said.
Fake News and smear campaigns
Finally, the CEO of Binance classified the campaigns as “fake news”, stating that these accusations usually come from organizations in the cryptocurrency market. That is, these are Binance competitors who, by not being able to compete with the exchange in the market, try to attack the company’s credibility. Some exchanges, according to Zhao, have even created or bought websites dedicated to attacking competitors while disguising themselves as independent newsgroups. Without naming names, Zhao snapped: “These types of negative campaigns are much more common than people realize. We have even seen cryptocurrency exchanges and projects create their own “news” sites to attack competitors, and these sites are now often misclassified as independent news sources by Google News. I would laugh too, if it weren’t so serious and off-putting.” Other market players have denounced what they call “disinformation campaigns. This is the case with Tether Limited, issuer of the USDT stablecoin, which responded to a Wall Street Journal (WSJ) article for singling out Tether with criticism that applies equally to other stablecoin issuers. “These types of attacks are becoming more and more sophisticated,” Zhao said. “These types of campaigns were trusted across the industry” Read Also: Robinhood Will Allow Cardano Trading (ADA) Read Also: Crypto.com Drops BRL 2.5 Billion Sponsorship Deal With UEFA Champions League Read Also: Babylon Finance Loan Protocol to Shut Down After Loss From Hacker Attack
