Binance vs FTX Trading Ltd. (defunct)

Changpeng Zhao — universally known as CZ — was born in Jiangsu province, China in 1977. His family emigrated to Canada when he was a teenager. He studied computer science at McGill University, then worked at Bloomberg Tradebook developing futures trading software, and later founded Fusion Systems in Shanghai building high-frequency trading systems. In 2013, a friend told him about Bitcoin at a poker game. CZ sold his Shanghai apartment and bought Bitcoin. In 2014 he joined Blockchain.info, then became CTO of OKCoin. By 2017, he had decided to build his own exchange.

Binance launched in July 2017, raising $15 million in an ICO eleven days before trading began. Within six months, Binance had become the world's largest cryptocurrency exchange by trading volume — a pace of growth that had no precedent in financial history. The platform differentiated on three dimensions: speed of listing new tokens (exploiting the ICO boom), low fees, and a native utility token (Binance Coin, BNB) that gave holders trading discounts. CZ also launched Binance Smart Chain in 2019 — an Ethereum competitor that attracted the DeFi ecosystem that Ethereum's high gas fees were excluding. CoinMarketCap was acquired for an estimated $400 million, giving Binance influence over the information layer of the crypto market.

When FTX collapsed in November 2022, Binance was initially seen as both its cause (CZ announced he was liquidating his FTT holdings, triggering the bank run) and its saviour (Binance briefly considered acquiring FTX before discovering the $8 billion hole in its balance sheet). The episode eliminated Binance's largest competitor and left CZ as the undisputed kingmaker of crypto. Binance processed $34 trillion in trading volume in 2021 alone. At its peak, CZ's estimated net worth reached over $100 billion — placing him among the wealthiest people in the world.

In November 2023, Binance agreed to plead guilty to US federal charges of enabling money laundering and violating sanctions enforcement laws, paying $4.3 billion in fines — the largest settlement in the history of the crypto industry. CZ resigned as CEO, was replaced by Richard Teng, and pleaded guilty to a single charge of violating the Bank Secrecy Act. He was sentenced to four months in a federal correctional institution in April 2024 and released in September 2024. In October 2025, President Donald Trump pardoned CZ, wiping his criminal record. CZ called it "not expected."

Binance reported $16.8 billion in revenue for 2024 — a 40% year-on-year increase — generated primarily from trading fees on spot and derivatives transactions. The exchange held $160 billion in user assets under custody and commanded approximately 39% market share among centralised cryptocurrency exchanges. Under CEO Richard Teng, Binance had obtained regulatory approvals in over 20 jurisdictions following the DOJ settlement. BNB — Changpeng Zhao's personal crypto holding representing 98% of his portfolio — had a market cap exceeding $90 billion. CZ's estimated net worth in mid-2025 was between $65 and $111 billion, depending on BNB's price. The exchange he had built in 180 days remained the most dominant financial platform in crypto.

Sam Bankman-Fried founded FTX in 2019 after co-founding Alameda Research, a crypto trading firm. SBF presented himself as an "effective altruist" who planned to donate most of his wealth to charity. He lived in a Bahamas compound with nine colleagues, slept on a beanbag under his desk, played video games during investor calls, and wore cargo shorts to meetings with heads of state. Institutional investors found this disarmingly authentic. They gave him billions. Sequoia Capital published a 14,000-word profile calling him "a potential future trillionaire."

By 2021, FTX had grown into the third largest cryptocurrency exchange in the world. SBF appeared on the covers of Fortune and Forbes. He donated $40 million to U.S. political campaigns — the second largest Democratic donor after George Soros. He lobbied Congress on crypto regulation, positioning himself as the responsible face of an industry known for scams.

On November 2, 2022, CoinDesk published a leaked balance sheet showing that Alameda Research held most of its assets in FTT — FTX's own token. Binance CEO Changpeng Zhao announced he would sell his FTT holdings. A bank run began. Within 72 hours, FTX faced $6 billion in withdrawal requests it could not meet. The exchange halted withdrawals. SBF resigned. FTX filed for bankruptcy on November 11, 2022. Bankruptcy investigators discovered that approximately $8 billion in customer funds had been transferred from FTX to Alameda Research and used for investments, political donations, and real estate purchases.

Sam Bankman-Fried was convicted of fraud and conspiracy on all seven counts against him in November 2023. At sentencing in March 2024, Judge Lewis Kaplan handed down 25 years in federal prison and ordered the forfeiture of $11 billion. Kaplan warned that Bankman-Fried "will be in a position to do something very bad in the future, and it's not a trivial risk." SBF had maintained throughout that he had not intended to steal — that the collapse was a risk management failure rather than fraud. The judge, prosecutors, and jury did not agree.

In June 2026, a federal appeals court upheld Bankman-Fried's fraud conviction and 25-year sentence, ruling that the case against him was "conservatively stated, robust." Every viable legal avenue to overturn the conviction was now closed. Meanwhile, the FTX bankruptcy estate had recovered far more than expected: over $6.5 billion had been distributed to creditors by mid-2025, with additional payments ongoing. Caroline Ellison, who had cooperated with prosecutors as the CEO of Alameda Research and SBF's former romantic partner, received a two-year sentence and was released in January 2026 after serving 14 months. The effective altruist who had promised to give away his wealth had stolen it instead, and was now serving the longest sentence ever imposed for a crypto-related crime.