Since the cryptocurrency space is considerably young, there is a shortage of experts and role models to look up to. To bridge the gap, some have resorted to portraying a clean image to increase their believability. The believability factor is taken a notch higher when the ‘role models’ have something substantial to hide their criminal sides.
Changpeng Zhao, who’s the CEO of Binance and commonly known as CZ in the social circles, is one such ‘role model’ who has a questionable character. CZ uses Binance, a leading crypto exchange, to portray an impeccable character to the crypto community.
Luckily, the recent Binance security breach, a court battle in Japan, and his involvement with Tether have helped to bring CZ’s questionable character to light.
The hack was an inside job
For example, when thousands of Bitcoins were hacked from the exchange in May this year, CZ said that it was an ordinary hack. However, some in the cryptocurrency community had a different opinion.
A Twitter user noted:
“Binance hacking could be an inside job for all we know. We know CZ is a criminal running an illegal, unregulated offshore exchange with investigations underway in the USA for the Tether scandal. The walls are closing in on him. Smells like desperation and Mt. Gox all over again.”
A Redditor added:
“We already know hackers stole funds; it’s just a matter of who did it. Guess who is the most likely culprit, that has full access to everything to pull it off? Binance and CZ.”
CZ breached an exclusivity agreement, turns back to seek compensation
Apart from the hack, CZ has been fighting a court battle in Japan. In a case that was before the High Court of Hong Kong, Sequoia Capital had sued CZ for going against the terms of an agreement. As per the agreement, CZ was to exclusively seek Series A funding round from the Sequoia Capital. But, CZ breached this exclusivity by engaging another firm, IDG Capital.
However, Changpeng Zhao won the case and has returned to the corridors of justice to seek compensation for reputational damages. The court is yet to make a ruling.
CZ has a hand in USDT woes
Additionally, a cloud of doubt has been hanging over CZ and Binance concerning their involvement with Tether LTD and the Tether stablecoin (USDT).
When Binance was hacked, it moved to halt all withdrawals and deposits. But, as noted by Coindesk, “Suspension of funding flows is never a good thing, especially since Binance’s public USDT wallet has been drained of hundreds of millions of dollars without explanation.” The New York Attorney General is investigating Tether Ltd for loss of user funds amounting to 800 million US dollars.
Binance, being a leading virtual currency exchange, has some of the largest USDT volumes. As such, the stablecoin could get locked and become unusable. CZ has also expressed his views over the same saying that the “concern is always there.” As a Redditor puts it, “Now remind me who was calling who a fraud.”