July 4, 2019
These days, Binance is one of the most successful crypto businesses, and certainly one of the world's largest cryptocurrency exchanges. However, this was not always so, and back in the day, when the exchange was only starting off, there was even a period when it went through a crisis that could have crippled the entire business.
It has been nearly two years since Binance started its ICO — an ICO that returned over 9,000% to its original investors. However, according to Changpeng Zhao, the exchange's CEO, things were rather difficult, back then. Recently, CZ spoke at Asia Blockchain Summit, where he admitted that the period right after Binance's ICO had concluded, was one of the toughest ones in his life.
The problem was that Binance ICO investors were losing money right after the token sale had ended. The exchange managed to raise around $15 million, and the money was highly necessary — as well as extremely useful — in improving the platform and making it what it is today. However, with a sharp drop following the token sale, the future of the entire project was at stake.
The investors were concerned and troubled, and the exchange worried that many would simply choose to cash out. There were certainly more than a few cases when this actually happened. However, the main concern was that they might launch lawsuits against the company. Binance was still new back then, and facing numerous lawsuits might easily have been the death of the project. Even if it managed to survive them, the negative publicity would have certainly brought irreparable damage.
So, CZ decided to save the situation himself. During his speech, he explained how he did it.
According to his confession, he took his own money, and started buying BNB. His goal was to at least try and stop the token's price from dropping any further. However, it did not work as well as he had hoped. It took weeks, but the situation finally settled, and Binance was able to stand firm on its feet, and come up with a solution that investors were waiting for. Over time, the exchange managed to build up a strong reputation, and eventually reach the status that it still holds today.
But, CZ admitted that this was an extremely stressful period, where he was under a lot of pressure. No matter what Binance faced in the months and years that came later, he never experienced such amount of pressure again, even when Binance was hacked, and 7,000 BTC was stolen from its hot wallet.
Of course, this is hardly surprising, given the size and power that Binance has these days. The amount stolen was equal to around $41 million, which is an amount that Binance could pay back quickly and easily to its users. Two years ago, however, the entire project could have gone to waste over only $15 million.
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