Meet ‘Heina’ Chen, The Secretive Executive Holding The Purse Strings At Binance
Changpeng Zhao BENJAMIN GIRETTE/BLOOMBERGJun 14, 2023,10:10am EDT
CEO Changpeng “CZ” Zhao’s mysterious associate Guangying Chen emerges as a key player in his company’s operations, which are the subject of a recent lawsuit from the SEC.
By John Hyatt, Giacomo Tognini, David Jeans, and Sarah Emerson, Forbes Staff
Inthe U.S. Securities and Exchange Commission’s sprawling lawsuit against crypto exchange Binance and its founder Changpeng Zhao, one name appears over and over again: Guangying “Heina” Chen.
When Binance set up its U.S. entity in 2019, it was Chen’s name listed as the signatory of its bank accounts. When Zhao set up a secretive company in Switzerland to allegedly artificially inflate the volume of crypto assets on Binance.US, it was Chen’s name on the bank accounts and onboarding documents. In the SEC’s complaint filed against Binance alleging “fraudulently inflated trading volumes,” the agency refers to a “Back Office Manager'' executing the phony trades: Again, Chen.
Chen seemingly has no official title at Binance or visible public presence, though Binance documents obtained by the SEC describe her job as “finance director.” The company hadn’t publicly acknowledged Chen’s existence at all before posting a blog by Zhao last September that downplayed her role as overseeing “admin and clearing.” However, a Forbes investigation found that Chen has controlled more bank accounts and served as a director at more Binance entities than any other executive besides CEO Zhao.
She is currently a director of 8 key Binance companies and was a signatory for dozens of bank accounts belonging to 27 entities registered in 13 countries, overseeing the company’s treasury and a spiderweb of companies that has processed $148 billion in deposits and withdrawals since 2019, according to the SEC. The bank accounts, held at Signature Bank and Silvergate Bank—both of which collapsed in March—were all closed or had balances of zero by May this year.
“Heina is the person CZ trusts,” said a former Binance executive who worked alongside Chen and Zhao. “She is the gateway of the Binance treasury.”
Court records, land deeds and corporate filings from China, Malta, Singapore, Switzerland and Turkey reviewed by Forbes, and four former Binance employees and an external consultant who have known or worked with Chen, paint a portrait of an elusive crypto leader who has followed Zhao around the world. While paying herself at least $32 million since 2019, according to court filings, Chen has had sign off on some of Binance’s most questionable and consequential business transactions, overseeing trades to allegedly artificially pump up the volumes of trading on the platform to drum up customer and investor interest—a key focus of the SEC’s fraud allegations. She also played a crucial role overseeing multiple entities that Zhao used to fund his lavish lifestyle, including purchases of a $55 million jet and an $11 million yacht, according to the SEC.
Such transactions are now at the center of Binance’s regulatory woes, with sprawling inquiries by the SEC and Commodity Futures Trading Commission. The exchange is also reportedly facing a Department of Justice investigation over claims that Binance or its executives ran afoul of Russian sanctions and anti-money laundering laws, and Senator Elizabeth Warren has called for the DOJ to open an investigation into claims the company lied to Congress. (Binance responded to Warren’s letter by stating that the company “supports the United States' effort to look holistically at regulations" and "takes the issue of compliance very seriously.")
In a statement released on June 5, Binance said it was “disappointed” by the SEC complaint and that the company will "vigorously defend against any allegations" that user assets on Binance.US were put at risk. Neither Chen nor the company responded to a request for comment on this story.
While Zhao’s crypto empire has so far survived the implosion of its largest competitor FTX and the contagion that brought down crypto lenders Celsius and Genesis, it is now facing existential threats. Binance, which claims to have no headquarters, has already withdrawn from or been banned in at least 10 countries. In April, Australian authorities canceled the financial services license of Binance's Australian subsidiary, leading to it being dropped by its payments provider. In May, Ontario’s Securities Commission launched an investigation into whether Binance was circumventing the province's securities law, prompting Binance to withdraw from Canada two days later and then file an application seeking to revoke the investigation.
Since the SEC charges became public, Binance trading volumes have fallen by 32%. In the U.S., where Binance serves more than 5 million customers, volumes have fallen by more than 75% and the SEC has requested a freeze on more than $2.6 billion in assets, effectively halting Binance’s operations in its largest market. Binance suspended all U.S. dollar deposits for its U.S. arm last week.
“The [SEC’s] not interested in a resolution that is going to permit Binance to do business in anything close to its current form,” says Renato Marrioti, a former prosecutor with the Department of Justice’s Securities & Commodities Fraud division.
Despite the headwinds, Zhao is still one of crypto’s wealthiest; Forbes estimates he is worth at least $10 billion, though that number could be significantly higher, depending on how much of Binance’s profits Zhao has kept for himself. The SEC records and corporate filings in 30 jurisdictions reviewed by Forbes indicate that Zhao owns 100% of Binance’s international business and 81% of Binance.US.
The secretive Chen remains at the helm of Zhao’s and Binance’s assets. “Heina had all controls,” said one former Binance executive. “[Zhao] trusted very few people with access to money.”
In one instance, where Binance tried and failed to acquire a bank in Liechtenstein, Binance’s then-CFO Wei Zhou negotiated the deal and met with local regulators. But it was Chen who wired $5 million into escrow from a Binance bank account held with Liechtenstein-based Bank Frick & Co., according to two people with knowledge of the deal and bank documents seen by Forbes. And it was Chen’s DocuSign signature (signing under her nickname, “Heina”), not Zhou’s, on an attestation form reviewed by Forbes of Binance’s assets and liabilities that was shared with Liechtenstein’s regulatory body. (Zhou did not respond to Forbes’ request for comment).
“It's all with her,” one of the sources added. “She was the one needed when it came to fund transfers or fund confirmation letters, whatever—because she is the authorized person for all bank accounts."
“She was the real CFO,” the source said.
Little is known about Chen’s life before Binance. According to her LinkedIn, she earned an undergraduate degree in accounting from the Shanghai University of Finance and Economics and an MBA from the National University of Singapore.
Though Chen’s had an outsized role at Binance since its inception in 2017, the company only acknowledged her existence in response to a reporter’s question last September. In a blog post titled “Who Is Guangying Chen, and Is Binance a ‘Chinese Company’?” Zhao wrote that he had met her in 2010 “when she was working at [his] friend’s wine store.” Chen also supplied alcohol for poker nights he hosted in Shanghai, according to a former Binance executive. “He changed her life,” the former executive added.
In the blog post, Zhao says that Chen went on to manage back office functions at a “large commercial bank” before he hired her to work at his new crypto company Bijie Tech, a cloud-service startup that provided software to support crypto exchanges. There, she would “manage the back office as the early team was mainly engineers,” Zhao wrote, saying that he’d installed her, a Chinese national, as a listed representative “because of restrictive laws in China surrounding foreigners (like [him,] a Canadian citizen).”
Chinese corporate records reviewed by Forbes show that while Zhao was listed as CEO of the company, Shanghai Bijie Network Technology Co. Ltd., it was Chen who controlled it on paper. She held 93% of the shares and was listed as both founder and sole legal representative.
After Bijie shuttered when its exchange clients were reportedly forced to close because of rampant scams, Zhao launched Binance in Shanghai in 2017. Again, corporate filings in China show that the firm was established under Chen’s name as the legal representative, with her holding 80% of its shares.
Rumors that Chen secretly controlled Binance began to circulate in 2020, after the friend of a disgruntled Binance customer put the company on blast in the Chinese social networking app Weibo, claiming his friend had lost 167 bitcoins on the platform. Several Chinese websites published his post and the emails his friend received from Chen, where she warned that "such activities on your part may be considered malicious to us, and we may respond to such attacks with prosecution for damage to our reputation, manipulation of public opinion, and even defamation."
Chen appears to have had varying titles at different times. On her LinkedIn, she states that she's "in charge of the middle and back office, including finance / HR / admin / clearing, etc,” and lists her title as “Co-Founder” of “the Company,” but doesn’t reference Binance by name. In Telegram messages seen by Forbes, former Binance CFO Wei Zhou called her Zhao’s “personal finance manager.” In the 2020 attestation form shared with Liechtenstein regulators, Chen listed her title as “Head of Backoffice”; the SEC refers to Chen as Binance’s “Back Office Manager” in its complaint. In emails seen by Forbes introducing Chen to an outside party, Chen was introduced simply as a “VP” at Binance. A former Binance executive who dealt with Chen on phone calls told Forbes they didn’t think she had an official title, but that her role was in the “finance department.”
Zhao himself has also tried to downplay her role: in the blog post from last year, he said Chen was responsible for the “admin and clearing team.” But despite Zhao’s claims that she was primarily a legal representative while Binance was still based in Shanghai, Chen’s central role in Zhao’s corporate entities extended far beyond China. After a Chinese government crackdown on crypto exchanges forced Binance to find a new home, Zhao established two companies in Malta in 2018, installing Chen as a director and sole legal representative at both firms the following year, per Malta’s business registry.
“Guangying had to leave her family, her home, and her friends behind when most of us left China in 2017,” Zhao wrote last year. “It was a tremendous sacrifice and she is one of the very few people who will ever truly understand the impact that this has had on all of us.”
As for her current whereabouts, Zhao stated in the 2022 blog post that Chen is a “passport holder in a European country, where she lives quietly with her family.”
But current filings reviewed by Forbes in the Maltese and Singaporean business registries appear to contradict that. According to the Malta registry, Chen updated the filings last June to register a new Chinese passport. China doesn’t allow dual citizenship, and the filings show that she resides in Singapore. That appears to contradict Zhao’s assertion that Chen “lives quietly” in a “European country.” Her LinkedIn says she’s based in the United Arab Emirates, which Zhao moved to from Singapore in 2022.
Said a former Binance executive: “She moved wherever [Zhao] went.”
Binance's move to Malta failed when the country's financial services regulator announced that the company was unauthorized to operate in crypto in February 2020. As Binance expanded to new markets, Chen was there, acting as a director and bank account signatory for subsidiaries in at least 15 countries ranging from Canada to Kazakhstan, according to court documents and corporate filings.
In 2019, when Binance launched a separate U.S. exchange as part of a plan to convince regulators that U.S. customer data and funds were managed and stored by a U.S. team, Chen was installed as an officer and bank account signatory at the U.S. companies that ran the American business. An end-of-year balance sheet for Binance.US in 2019, cited in the SEC filings, shows Chen as the only signatory for all nine of the company’s bank accounts at the time.
To bolster the local operation, Zhao used a new company based in Switzerland and led by Chen—as a director and bank signatory, according to SEC filings and corporate records—to conduct what the SEC would later allege was widespread fraud on the U.S. platform. The company, Sigma Chain AG, was set up as a so-called market maker, using “revenue generated from the differences of bid and ask price," backstopped by “funds from [Zhao’s] personal account," according to an onboarding document for Binance.US cited in the SEC filings.
But unlike typical market makers that serve as independent high volume traders on exchanges, Sigma Chain was allegedly used to artificially drum up trading volumes on Binance.US using a process known as “wash trading”—sending crypto assets back and forth to create the appearance of customer activity—according to the SEC complaint.
On the day Binance.US launched in September 2019, Sigma Chain was conducting wash trades, creating the impression that the exchange was bustling, per the SEC. In the summer of 2021, when Binance’s U.S. arm was in talks to raise $200 million from investors like Foundation Capital and Circle Ventures—a deal that ultimately closed in March 2022—the SEC alleges that Sigma Chain accounts were making spoof trades on 51 of the 58 cryptocurrencies available on the platform. Then, in the first half of 2022, as Binance.US listed dozens of new crypto assets, Sigma Chain allegedly conducted wash trading in 48 of the 51 newly listed assets, according to the SEC. In a filing responding to the SEC’s complaint, Binance's lawyers said that “the allegedly manipulative trading identified by the SEC was entirely appropriate and, in any event, was not material.”
Yet inside the company, Sigma Chain’s activity was raising eyebrows among Binance.US employees. Catherine Coley, the former CEO of Binance’s U.S. arm, had raised concerns in 2019, stating in a message to Binance’s then-CFO Wei Zhou that having Chen as a signatory for bank accounts would be a “red flag for regulators and open [Binance] to U.S. scrutiny,” per SEC documents. When a sales director told the Binance.US CEO and employees in January 2021 that 20 accounts belonged to Sigma Chain, an employee responded “whoa.”
Along the way, the lines between Binance subsidiaries and entities controlled by Zhao and Chen began to blur. Entities owned by Zhao and controlled by the pair were used to commingle approximately $11 billion in customer deposits with Binance’s bank accounts, according to the SEC. Beyond wash trading, Sigma Chain was used to buy an $11 million yacht and to pay $32 million to Chen personally.
Chen was also a bank signatory to multiple transactions that fueled Zhao’s opulent lifestyle, despite his espousal of doing away with material luxuries and traditional banking; “no house, no car, no boat, no fiat money,” he tweeted in 2020. The SEC documents show that another company owned by Zhao, British Virgin Islands-based Binance Capital Management Co. Ltd., spent $55 million on a jet and distributed $62.5 million to one of his personal bank accounts. That firm and two other Binance entities controlled by the pair directed another $178 million to two Singapore companies controlled by Zhao and Chen.
But working so closely with Zhao hasn't always been advantageous for Chen. In his blog post last year, Zhao expressed regret for asking Chen to be his legal representative back in 2015 because she’d been subjected to so much scrutiny. “She and her family have been targeted and harassed by the media and online trolls,” he wrote. “Had I known how much of a negative impact this would have on her life, I never would have asked her to do what seemed like such an innocuous step at the time.”
