Letter from He Yi to a US Judge What is the Real Zhao Changpeng Like?

Today, it is his sense of responsibility that makes him choose to face the trial, but he should never be regarded as the same as evil murderers, robbers, and frauds.

The Honorable Richard A. Jones

United States Courthouse

700 Stewart Street, Suite 13128

Seattle, WA 98101-9906

Dear Judge Jones,

Thank you for taking the time to read this letter. I am a partner in the work of Changpeng Zhao (abbreviated CZ) and I am also the mother of his three children. I hope this letter will help Your Honor understand a more authentic Changpeng Zhao.

In spring 2014, I met Changpeng Zhao at a school’s public blockchain event. Everyone calls him CZ, which is different from the anonymous names used by many people. These are the initials of his real name. On that day, CZ arrived and was invited on stage to share spontaneously, as the host discovered that he worked for the most popular Bitcoin wallet at the time (blockchain.info). He was passionate about explaining blockchain technology and the principles of Bitcoin. At that time, he had just sold his home to buy Bitcoin. His assets plummeted due to the decline in the price of Bitcoin, but this did not hinder his obsession with blockchain technology. His speech was full of idealism about the positive changes blockchain technology could bring to the world, which greatly affected and inspired me. Later, CZ chose to venture into the cryptography field and founded Binance. He certainly hoped that the company would succeed, but he wasn’t a person whose ultimate goal was making money. He wanted to use technology to advance the world.

In the summer of 2014, CZ’s matching and trading technical background accumulated over many years could not be used to its advantage at Blockchain. After I invited him many times, he joined OKCoin, the crypto trading platform where I worked. At that time, the coin circle had entered a downward cycle. Amidst the wailing of the industry, a community member unfortunately suffered from leukemia, and he was unable to afford his medical expenses, so he launched a public fundraiser. CZ also actively participated in donations even though his personal assets were greatly reduced, but unfortunately, the community member died in the end. Inspired by this, CZ and I jointly launched the “Caring BTC” charity project. He built a website and public Bitcoin wallet address. We raised funds through social media auctions of clothes etc. and then directly exchanged BTC for items for beneficiaries. To this end, CZ also wrote a paper on how blockchain technology can achieve 100% transparent philanthropy, ensuring that the ultimate beneficiary receives 100% of the proceeds and that no donations are eroded by intermediary management fees. The paper can be found on GitHub, with a time stamp of April 2014 (https://github.com/cpzhao/bitcoin_charity/blob/master/Bitcoin_Charity.md); and this is the predecessor of Binance Charity. This was three years before the establishment of Binance, when CZ was not wealthy. Many people believe that philanthropy is just for fame. Some people use it as a means to offset taxation. Some people say that they will do philanthropy when they become financially free. For CZ, regardless of whether he is poor or rich, he takes philanthropy seriously and assumes social responsibility because he is kind and has a humanitarian spirit.

August 2017 was the first month that I joined Binance. A young user found me saying he had transferred thousands of USD to a Binance wallet address, but Binance did not support this altcoin, so Binance could not receive it; this was a very common mistake in the early stage of the industry. According to industry practice at the time, you were responsible for the mistakes you made. However, for this child in his early 20s, those thousands of USD may have been his family’s income for the year, or his college tuition for the year. They were his hope for the future. After a brief discussion between me and CZ, he mobilized our already stretched development resources to help the user recover the assets quickly. This was the first case in the industry of helping users recover assets sent to wrong addresses. Since the first time, it has happened countless times subsequently. Under the guidance of CZ, Binance has helped more than 180,000 users recover assets totaling more than US$441 million. It’s a resource-intensive project with an ROI that doesn’t seem worth it, but we can spark hope for our users in despair. To this day, they still do not support this service on publicly traded trading platforms such as Coinbase. In this emerging Wild West, countless practitioners have played more the role of predators, while CZ has always insisted that we do the right thing: Protect users.

At the beginning of 2018, the price of Bitcoin increased by more than US$20,000, and the enthusiasm of investors also generated a lot of fraud. One day, a group of Chinese users came to me and pointed out that they were induced to invest in a project by an account on social media. After the money was transferred, the person subsequently disappeared. However, according to the public information on the chain, the money had just been transferred to Binance.According to the law enforcement process of most platforms today, the user needs to report to the police first and the police must provide a letter of assistance in investigation in order to freeze the funds. Additionally, at that time, China banned cryptocurrency transactions and the Chinese police did not accept such cases. CZ said to us: “Do the right thing.” We temporarily froze the money and arranged multiple calls with the victims and the scammer. Finally, the scammer returned the money to the users and closed the account. This is just one of the many examples of CZ’s insistence on combating bad actors. In 2023, which has just concluded, Binance cooperated with the law enforcement authorities of various countries in more than 58,000 case investigations, many of which were initiated by Binance. This is why although the mainstream media tries to portray CZ as an evil bad actor, millions of community users and ordinary people regard him as a hero of the industry, because CZ has always insisted on justice. If the cryptocurrency industry is compared to the Wild West, then CZ is the guardian of this wilderness.

Starting in 2019, the company’s personnel began to grow rapidly. Team composition became very globalized and full of diversity; during this period, there were Wall Street elites who graduated from Ivy League schools, dropouts from Europe, female NGO fighters active on the front lines in Africa, and young men in rural Southeast Asia who did not want to be fishermen and sailors. It can be said that CZ truly treated everyone the same regardless of race,creed, gender, education, or family background; whether it was a junior employee’s house in Southeast Asia was destroyed by a fire, or Covid sweeping the world and causing employees to lack epidemic supplies, or even the war in Russia and Ukraine posing danger to employees, CZ helped employees regardless of the cost; it is not unusual for a business owner to spend millions of dollars to help those rare talents facing difficulties and take their families out of unstable living environments and to continue to pay subsidies, but when CZ made these decisions, he did not consider their backgrounds or positions. This also covered a large number of junior employees who were just starting out. These employees are generally easy to find replacements for, but there was only one reason for CZ’s decisions: They needed support.

CZ’s leadership style may not meet the traditional expectations for a great CEO. His commitment to transparency and fairness often clashed with the power expectations of a small group of employees accustomed to an elite corporate environment. This resulted in some employees leaving the company with resentment and making false allegations to the media. While these reports sometimes frustrate me, CZ has been taking on this burden and continues to support justice and equality because he understands that true fairness is sometimes unfair to the privileged few.

One weekend in November 2022, FTX was facing a crisis, and Sam (SBF) made a last call for help to CZ. Before getting any valid reports and documents from SBF, CZ convened a management meeting to decide whether to save FTX. He said: “We don’t need FTX as a company. We save FTX in order to save this industry. We should save FTX.” Although there was no choice but to give up the deal in the end, the subsequent publicity of the incident showed that multiple companies associated with FTX were misappropriating user assets, which stunned CZ. CZ believes that transparency is a better solution, so he disclosed the address of the trading platform wallet of Binance and launched a product that allows users to verify that their account funds and online wallet addresses are linked to demonstrate Binance’s transparency, further promoting self-discipline in the industry.

So far, CZ and I have been working in this industry for a decade. The industry has changed dramatically over this decade, with Bitcoin rising from a low of a few hundred dollars to more than $40,000 today. We have seen countless former celebrities fall into disrepute and we have also seen countless well-known institutions collapse in an instant. Most of the time, these people pretend to be smart and talented, but they regard the law as nothing, believing that they can deceive the public or escape the punishment of the law, but CZ is not like this; he is honest,kind, sincere, clever, and very hard-working; due to work reasons, CZ had two spinal surgeries in 2020 alone. Even though he was repeatedly bedridden for 18 months, he never stopped working for a single day. As CEO and largest shareholder in the past 6 years, he has received a lower salary than multiple executives subsequently brought to the company, and he has not paid any dividends or cash out to himself. This time, in order to allow Binance to keep operating, he chose to fly to the US to plead guilty; between his personal interests and the public interest, CZ has always chosen to sacrifice himself to allow Binance to succeed, and between Binance and users, he would choose users.

As CZ’s partner, I clearly know how CZ has earned the respect of the community; it may be because when the Chinese government banned Bitcoin trading platforms and other projects took advantage of the opportunity, CZ chose to refund users at a higher price; it may also be because when Binance suffered theft, CZ made this public information and assumed full responsibility immediately. It may also be because when countless projects only sold coins to become rich, CZ helped users trace the industry’s fraudsters and hackers, even in some cases unrelated to Binance, just because he has a sense of mission and responsibility for this industry.

As CZ’s life partner, I have known CZ for nearly ten years, so I know more about the other side that he is not known for. He knows nothing about the jewelry, luxury goods, luxury cars, and art auctions that rich people are passionate about. He leads a simple life. He buys affordable clothes on Amazon. He rides a self-balancing scooter to meetings. He enthusiastically showed a reporter his Toyota 6-seater van and was later publicly ridiculed by the reporter. He buys things out of efficiency and interest. He has no fanatical desire for money, reputation, or pleasure. He hopes to live a meaningful life. At the same time, he always takes care of his friends as much as possible, regardless of their professional and social status; he also tries to take time from his busy work to maintain high-quality interactions with his 3 young children. They are very close to him and now they are always asking: Why isn’t Dad home? When can Dad come back?

Of course, I’m not saying here that CZ did not make mistakes, but his biggest mistake was ignorance. As a startup with no fancy background, the founding team members had no legal background, and even most of the early management team members, except CZ, could not even read English, such as myself. With little experience and legal knowledge, CZ won over users with fairness, integrity, and a sense of responsibility for the industry, while also making mistakes. Regardless, the mistakes have been made, and both Binance and CZ have paid a heavy price.

CZ previously said: “No one wants to be a hero, because no one is born wanting to go on the front line and take a bullet. A hero is just in that position and has to protect his family, community, people, and country to do the right thing. In the process, he has to become a hero. “I humbly hope that Your Honor can comprehensively take into account how the cryptocurrency industry is so new and chaotic. Even the US has not decided how to regulate and define this industry. As a founder who has never managed a company of this size, he was sure to encounter blind spots. If CZ knew the seriousness of the matter, he would definitely have been on guard from day one and blocked any US users. He didn’t want to be a hero, he certainly didn’t want to be a criminal, and all of his behavioral logic followed universal humanitarian principles while he did his best. Today, it is his sense of responsibility that makes him choose to face the trial, but he should never be regarded as the same as evil murderers, robbers, and frauds. I sincerely wish Your Honor could see with the all-seeing eye, fully understand all things, and make a fair judgment after seeing a more complete CZ. You can contact me at any time for more details if needed.

Best wishes!

He Yi

Binance Cofounder & mother of CZ’s three children

January 11, 2024