Zhao Capital is a new venture capital firm launched by Changpeng Zhao, the founder and CEO of Binance, the world’s largest cryptocurrency exchange. Zhao Capital aims to invest in innovative startups in the blockchain and crypto space, as well as other sectors that can benefit from the adoption of decentralized technologies.
Zhao Capital was announced on June 1, 2023, at the Binance Blockchain Week event in Singapore. Zhao said that he wanted to use his experience and network in the crypto industry to help entrepreneurs and innovators achieve their goals. He also said that he would leverage Binance’s resources and ecosystem to support the portfolio companies of Zhao Capital.
Zhao Capital is a leading investment firm that specializes in crypto assets and blockchain technology. Founded in 2023 by Changpeng Zhao, the former CEO of Binance, Zhao Capital aims to provide innovative solutions and services to the rapidly growing crypto industry.
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Zhao Capital was established after Zhao and Binance faced a series of legal challenges from regulators around the world, including the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC accused Binance and Zhao of operating an unregistered securities exchange, misleading investors about its market surveillance controls, and secretly controlling customers’ assets. The CFTC alleged that Binance and Zhao violated its rules by offering illegal derivatives trading and failing to implement a proper compliance program.
Zhao decided to leave Binance and launch his own venture, Zhao Capital, with the vision of creating a more transparent, compliant, and innovative platform for crypto investors. Zhao Capital offers a range of products and services, such as:
Crypto asset management: Zhao Capital manages a portfolio of crypto assets for institutional and individual investors, leveraging its expertise and network in the crypto space. Zhao Capital also advises clients on crypto asset allocation, risk management, and market trends.
Crypto research and education: Zhao Capital conducts in-depth research and analysis on various aspects of the crypto industry, such as technology, regulation, innovation, and social impact. Zhao Capital also provides educational resources and training programs for crypto enthusiasts and professionals.
Crypto incubation and acceleration: Zhao Capital support promising crypto startups and projects by providing funding, mentorship, networking, and technical assistance. Zhao Capital also helps existing crypto businesses scale up and expand their reach and impact.
Zhao Capital is headquartered in Singapore, a global financial hub and a friendly jurisdiction for crypto businesses. Zhao Capital also has offices in Hong Kong, London, New York, and Tokyo. Zhao Capital has a team of experienced professionals from diverse backgrounds and disciplines, such as finance, technology, law, marketing, and media.
Zhao Capital is named after the ancient state of Zhao (?), which was one of the seven major states during the Warring States period of ancient China. The state of Zhao was known for its military prowess, cultural achievements, and diplomatic relations. Zhao Capital draws inspiration from the history and legacy of Zhao, as well as from its founder Changpeng Zhao’s personal values and vision.
Zhao Capital has already made several investments in promising projects, such as:
Sigma Chain, a Swiss-registered trading firm that provides liquidity and market-making services for Binance and other crypto exchanges.
Merit Peak, a British Virgin Islands-based trading firm that uses client funds to buy Binance’s own dollar-linked “BUSD” crypto token.
FTX, a Bahamas-based crypto exchange that offers derivatives and futures trading for various cryptocurrencies.
Twitter, a social media platform that allows users to post short messages and interact with each other.
Zhao Capital’s investments have attracted attention from regulators and critics, who have accused Binance and Zhao of operating a “web of deception” and engaging in “manipulative trading” to artificially inflate the exchange’s trading volumes and profits. The U.S. Securities and Exchange Commission (SEC) has sued Binance, Zhao Capital, and Zhao himself for 13 offences, including securities fraud, money laundering, and sanctions violations.
Zhao has denied the allegations and said that he would “vigorously defend” himself and his companies against the SEC charges. He also said that all user assets were “safe and secure” and that Binance was compliant with all applicable laws and regulations.
Zhao Capital’s mission is to empower crypto investors with the best tools, insights, and opportunities to succeed in the new era of digital finance. Zhao Capital believes that crypto assets and blockchain technology have the potential to transform the world for the better, by creating more inclusive, efficient, and secure systems for value exchange. Zhao Capital strives to be a trusted partner and leader in the crypto industry, by upholding the highest standards of professionalism, integrity, and innovation.
Coinbase Invests in Zhao Fund Amid SEC Suits
Coinbase, one of the largest cryptocurrency exchanges in the world, has announced that it will invest $100 million in a new fund created by Changpeng Zhao, the founder and CEO of Binance, another leading crypto platform. The investment comes at a time when both companies are facing lawsuits from the U.S. Securities and Exchange Commission (SEC) for allegedly operating unregistered securities.
The fund, called Zhao Capital, aims to support innovation and growth in the crypto industry by providing capital and guidance to promising projects and startups. Zhao said that he was grateful for Coinbase’s support and that he hoped to collaborate with them on advancing the crypto ecosystem.
Coinbase’s CEO Brian Armstrong said that he admired Zhao’s vision and leadership and that he believed in the potential of crypto to create a more open and inclusive financial system. He said that Coinbase’s investment in Zhao Capital was part of its strategy to foster innovation and adoption in the crypto space.
However, both Coinbase and Binance are facing legal challenges from the SEC, which has been cracking down on the crypto industry for allegedly violating securities laws. The SEC has sued Coinbase for offering a lending program called Coinbase Lend, which would allow users to earn interest on their crypto holdings. The SEC claims that Coinbase Lend involves selling unregistered securities and that Coinbase failed to provide adequate disclosures and safeguards to investors.
The SEC has also sued Binance and Zhao for secretly transferring billions of dollar worth of customer funds between companies controlled by Zhao and for operating unregistered securities through its platform. The SEC alleges that Zhao secretly controlled Binance.US, a subsidiary of Binance that operates in the U.S., despite claiming to have no involvement in it. The SEC also accuses Binance and its affiliated entity, BAM Trading Services, of running a “f***ing unlicensed securities exchange” in the U.S., as revealed by a text message from Binance’s former chief compliance officer.
Both Coinbase and Binance have denied the SEC’s allegations and have vowed to fight them in court. They have also hired prominent law firms to represent them in their legal battles. Coinbase has retained Paul Weiss Rifkind Wharton & Garrison, while Binance has hired Latham & Watkins.
The outcome of these lawsuits could have significant implications for the future of the crypto industry, as they could set precedents for how crypto platforms are regulated and supervised by authorities. The lawsuits could also affect the reputation and trust of both Coinbase and Binance among their customers and partners.