Forbes: Who is Chen Guangying, the mysterious executive behind Binance’s funding?

According to Forbes, Guangying Chen, CZ’s mysterious partner, is a key player in the company’s operations and has become the target of the recent SEC lawsuit.

The original article, “Meet ‘Heina’ Chen, The Secretive Executive Holding The Purse Strings At Binance,” was translated by Odaily Star Daily jk.

Binance CEO Zhao Changpeng (CZ)’s mysterious partner, Guangying Chen, has become a key player in the company’s operations and the target of a recent lawsuit by the U.S. Securities and Exchange Commission (SEC).

In the SEC’s massive lawsuit against cryptocurrency exchange Binance and its founder, Zhao Changpeng, one name keeps appearing: Guangying “Heina” Chen.

When Binance established its subsidiary in the United States in 2019, Chen Guangying’s name appeared on the signatory list of its bank account. When Zhao Changpeng established a secret company in Switzerland, allegedly to artificially increase Binance’s cryptocurrency asset trading volume in the United States, Chen Guangying’s name appeared on the bank account and employment documents. In the SEC’s complaint against Binance for allegedly “fraudulent exaggeration of trading volume,” a “logistics manager” who executed false trades is mentioned: she is also Chen Guangying.

Chen Guangying appears to have no formal title or public profile at Binance, although the Binance documents obtained by the SEC describe her job as “chief financial officer.” In a blog post by Zhao Changpeng last September, she was described as responsible for “administration and settlement,” the first public acknowledgment of her existence by the company. However, Forbes’ investigation found that, in addition to CEO Zhao Changpeng, Chen Guangying serves as a director in more Binance entities and controls more bank accounts.

According to SEC data, she is currently a director of eight key Binance companies and has served as a signatory for dozens of bank accounts for 27 entities registered in 13 countries, overseeing the company’s funds and a range of company operations. Since 2019, these accounts have been accessed for deposits and withdrawals at Signature Bank and Silvergate Bank, amounting to a total of $148 billion. However, as of May of this year, all of these accounts have been closed or have a zero balance, with both banks announcing bankruptcy in March.

“Zhao Changpeng trusts Chen Guangying,” said a former Binance executive who had worked with Chen Guangying and Zhao Changpeng, “She is the gateway to Binance’s finances.”

Forbes investigation found that based on court records, land contracts, and company documents from China, Malta, Singapore, Switzerland, and Turkey, as well as four former Binance employees and an external consultant who have had contact with Chen Guangying or worked with her, a mysterious image of a crypto leader emerged, who has been following Zhao Changpeng around the world. According to court documents, Chen Guangying has received at least $32 million in salary since 2019. She signed off on some of Binance’s most suspicious and significant business deals, oversaw the transactions, and allegedly artificially inflated the trading volume on the platform to stimulate customer and investor interest, which is also a key focus of the US Securities and Exchange Commission’s charges. According to the SEC’s charges, she also played a key role in Zhao Changpeng’s multiple entities used for his lifestyle, including the purchase of a $55 million plane and a $11 million yacht.

“(Chen Guangying) is the gateway to Binance’s finances.” – Former Binance executive

Such transactions have now become the core of Binance’s regulatory issues, and the US Securities and Exchange Commission and the Commodity Futures Trading Commission have conducted extensive investigations. The exchange is also reportedly facing a Justice Department investigation into allegations of violating Russian sanctions and anti-money laundering laws, and Senator Elizabeth Warren has called on the Justice Department to investigate the company’s false claims. (Binance’s response to Warren’s letter stated that the company “supports efforts for a comprehensive review of US regulation” and “takes compliance issues very seriously.”)

In a statement released on June 5, Binance said it was “disappointed” by the US Securities and Exchange Commission’s complaint and that the company would “vigorously defend against any allegations that put users’ assets at risk on Binance.US.” Neither Chen Guangying nor the company responded to requests for comment on this report.

Although Zhao Changpeng’s crypto empire has survived so far in the epidemic that has caused the collapse of its biggest competitor FTX and led to the closure of crypto lending platforms Celsius and Genesis, it is now facing a threat to its survival. Binance, which claims to have no headquarters, has withdrawn or been banned in at least 10 countries. In April of this year, the Australian authorities canceled the financial services license of Binance’s Australian subsidiary, leading to the abandonment of the subsidiary by payment service providers. In May, the Ontario Securities Commission launched an investigation into whether Binance had circumvented the province’s securities laws, prompting Binance to withdraw from Canada two days later and apply to have the investigation dismissed.

Since the US Securities and Exchange Commission’s (SEC) allegations against it, Binance’s trading volume has dropped 32%. In the US, Binance serves over 5 million customers, and the trading volume has dropped by more than 75%. The SEC has demanded the freezing of more than $2.6 billion in assets, effectively stopping Binance’s operations in its largest market. Last week, Binance suspended all US dollar deposits for its US business.

“The SEC is not interested in a solution that would allow Binance to operate in a form close to its current one,” said Renato Mariotti, a former Justice Department prosecutor in the securities and commodities fraud division.

Despite adversity, Zhao Changpeng remains one of the wealthiest people in the cryptocurrency industry. Forbes estimates his net worth to be at least $10 billion, but this number could be significantly higher depending on how much of Binance’s profits Zhao Changpeng has reserved for himself. Forbes examined SEC records and company documents from 30 jurisdictions, which showed that Zhao Changpeng owns 100% of Binance’s international business and 81% of Binance’s US site.

“(Chen Guangzheng) is the real CFO.” – Former Binance Advisor

The mysterious Heina still controls Zhao Changpeng and Binance’s assets. “Heina has all the control of Binance,” said a former Binance executive. “(Zhao Changpeng) only trusts a few people, and they have access to the funds.”

In one instance, Binance attempted to acquire a bank in Liechtenstein, and Binance’s CFO at the time, Wei Zhou, negotiated the deal and met with local regulatory authorities. But according to two sources familiar with the deal and Forbes-reviewed bank documents, it was Chen Guangzheng who wired $5 million in escrow from a Binance bank account related to Liechtenstein’s Frick & Co. bank. And on a proof of Binance’s assets and liabilities signed by Chen Guangzheng’s DocuSign (signed with her nickname “Heina”), not Zhou Wei’s signature (Zhou Wei did not respond to Forbes’ request for comment) as seen by Liechtenstein’s regulatory authorities.

“She has everything under her control,” one source added. “She is essential when it comes to matters like fund transfers or confirmation letters because she is the authorized person for all bank accounts.”

“She is the real CFO,” the source said.

Little is known about Chen Gaoying’s life before joining Binance. According to her LinkedIn profile, she earned a bachelor’s degree in accounting from Shanghai University of Finance and Economics and an MBA from the National University of Singapore.

Although Chen has played an important role in the company since Binance was founded in 2017, the company did not acknowledge her existence until last September, when it responded to a reporter’s questions. In a blog post titled “Who is Chen Gaoying, and is Binance a ‘Chinese company’?”, Zhao Changpeng wrote that he “met her at a friend’s winery in 2010.” According to a former Binance executive, Chen also provided drinks for his poker night in Shanghai. “He changed her life,” the former executive added.

In the blog post, Zhao said that Chen worked in logistics management at a “large commercial bank” before he hired her to work at his new cryptocurrency company, Bijie Tech, a cloud services start-up that supported cryptocurrency exchanges. Because of Chinese restrictions on foreigners, such as himself as a Canadian citizen, Zhao listed her as a Chinese national on the listing.

“Wherever (Zhao Changpeng) goes, (Chen Gaoying) goes.” – Former Binance employee

Chinese corporate records reviewed by Forbes show that when Zhao Changpeng was listed as CEO of the company (Shanghai Bijie Network Technology Co., Ltd.), Chen Gaoying actually controlled the company. She held 93% of the shares and was listed as the founder and sole legal representative.

When Bijie was forced to shut down its exchange customers due to large-scale fraud, Zhao Changpeng founded Binance in Shanghai in 2017. Similarly, Chinese corporate documents show that the company was established in Chen Gaoying’s name as the legal representative, and she holds 80% of its shares.

Rumors that Chen Gaoying secretly controls Binance began to circulate in 2020, when a dissatisfied Binance user’s friend publicly criticized the company on the Chinese social networking app Weibo, claiming that his friend lost 167 bitcoins on the platform. Several Chinese websites posted his post and emails from Chen Gaoying that his friend received, in which she warned, “Your actions may be considered malicious against us, and we may sue you for damaging Binance’s reputation, manipulating public opinion, or even defamation.”

Chen Guangying seems to have held different positions at different times. On her LinkedIn profile, she says she is “responsible for back-end management, including finance/human resources/administration/settlement, etc.,” and lists herself as a “co-founder” and “company position,” but does not specifically mention Binance. In a Telegram message seen by Forbes, former Binance CFO Wei Zhou referred to her as Zhao Changpeng’s “personal financial manager.” In proof-of-concept documents shared with the Liechtenstein regulator in 2020, Chen Guangying listed her position as “logistics manager”; the SEC referred to Chen Guangying as Binance’s “logistics manager” in its complaint. In an email seen by Forbes introducing Chen Guangying to an external party, she was only referred to as Binance’s “vice president.” A former Binance executive who spoke with Chen Guangying told Forbes that they believed she did not have a formal title, but played an important role in the “finance department.”

Zhao Changpeng himself has also tried to downplay her role: in a blog post last year, he said Chen Guangying was responsible for “administrative and settlement teams.” But despite Zhao Changpeng’s claim that she primarily served as a legal representative while Binance was still based in Shanghai, Chen Guangying’s core role in Zhao’s company entities extended far beyond China. After Chinese crackdowns on crypto exchanges prompted Binance to find a new home, Zhao established two companies in Malta in 2018; according to Malta’s business registration records, Chen Guangying was appointed director and sole legal representative of both companies the following year.

“Guangying had to leave her family, home, and friends when most of us left China in 2017,” Mr. Zhao wrote last year. “It was a huge sacrifice, and she was one of the very few who truly understood the impact this had on all of us.”

As for her current whereabouts, Mr. Zhao said in a 2022 blog post that Chen “holds a passport from some European country and lives quietly with her family there.”

However, the latest documents reviewed by Forbes in Malta and Singapore business registration filings seem to contradict this. According to Malta’s registration documents, Ms. Chen updated her documents in June last year and registered a new Chinese passport. Dual nationality is not allowed in China, and these documents show that she resides in Singapore. This seems to contradict Mr. Zhao’s claim that Chen “lives quietly in a European country.” Her LinkedIn profile shows she is currently based in the United Arab Emirates, while Mr. Zhao moved there from Singapore in 2022.

A former Binance executive said, “Wherever Mr. Zhao went, she (Chen Guangying) went.”

Binance’s relocation plan to Malta failed in February 2020, when the country’s financial services regulator announced that the company was not authorized to engage in cryptocurrency business. According to court documents and company records, as Binance expanded into new markets, Ms. Chen, as a director and signatory to bank accounts, was involved in the operations of subsidiaries in at least 15 countries, including Canada and Kazakhstan.

In 2019, when Binance launched an independent U.S. exchange, Ms. Chen was appointed as an executive and bank account signatory to manage the U.S. business, as part of a plan to persuade regulators that data and funds from U.S. customers were managed and stored by the U.S. team. The balance sheet for the 2019 Binance US exchange cited in SEC filings shows that at the time, Ms. Chen was the sole signatory to all nine of the company’s bank accounts.

To strengthen local operations, according to SEC filings and company records, Mr. Zhao used a new Swiss-based company, Sigma Chain AG, with Ms. Chen as a director and bank signatory, to conduct what the SEC alleges was large-scale fraud on the U.S. platform. The company was set up as a so-called market maker, generating revenue from the “spread between buy and sell prices” and supported by “funds from [Mr. Zhao’s] personal accounts,” according to Binance US exchange filings cited in the SEC documents.

However, unlike typical market makers that trade independently on exchanges, Sigma Chain artificially increased trading volume on the Binance US exchange through so-called “wash trades,” or back-and-forth sending of cryptocurrencies to create the illusion of customer activity, according to the SEC’s allegations.

According to the SEC’s allegations, Sigma Chain engaged in fraudulent trading on the first day of operation for Binance US exchange in September 2019, creating the illusion of a busy exchange. By the summer of 2021, as Binance’s U.S. arm negotiated to raise $200 million from investors including Foundation Capital and Circle Ventures (a deal that eventually closed in March 2022), the SEC claims that Sigma Chain’s accounts engaged in wash trading with 51 of the platform’s 58 cryptocurrencies. Then in the first half of 2022, as Binance US exchange listed dozens of new cryptocurrencies, the SEC claims Sigma Chain engaged in wash trading with 48 of the 51 newly listed assets. In response to the SEC’s complaint, Binance’s lawyers said, “The so-called manipulation trading alleged by the SEC is completely legal and has no substantive impact whatsoever.”

However, Sigma Chain’s activities within Binance US caught the attention of Binance US employees. According to SEC filings, Binance US’s former CEO, Catherine Coley, expressed concerns in 2019, stating in a letter to Binance’s then-CFO Wei Zhou that making Ms. Chen a signatory on the bank accounts would be a “regulatory red flag and subject [Binance] to scrutiny in the US.” When a sales director told Binance US’s CEO and employees in January 2021 that 20 accounts belonged to Sigma Chain, one employee responded with “wow.”

In the process, the line between Binance’s subsidiary and the entities controlled by Mr. Zhao and Ms. Chen began to blur. According to the SEC, entities owned by Mr. Zhao and controlled by the two of them mixed approximately $1.1 billion of customer deposits with Binance’s bank accounts. In addition to bogus trades, Sigma Chain was also used to purchase a $11 million yacht and pay Ms. Chen $32 million personally.

Despite Mr. Zhao’s claims of eschewing material luxuries and traditional banking, Ms. Chen also provided funding for Mr. Zhao’s lavish lifestyle by signing as a bank signatory in multiple transactions. He wrote in a tweet in 2020, “No house, no car, no yacht, no fiat.” According to SEC filings, another company owned by Mr. Zhao, Binance Capital Management Ltd., based in the British Virgin Islands, spent $55 million on a private jet and allocated $62.5 million to his personal bank accounts. That company and two other Binance entities controlled by the two of them also transferred $178 million to two Singaporean companies controlled by Mr. Zhao and Ms. Chen.

However, working closely with Mr. Zhao was not always beneficial to Ms. Chen. In a blog post last year, Mr. Zhao expressed regret over asking Ms. Chen to be his legal representative in 2015, as she came under heavy scrutiny. “She and her family have been subject to attacks and harassment from the media and netizens,” he wrote. “If I had known how negative an impact this would have on her life, I would never have asked her to take what seemed like a harmless action.”

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