Once wanting to acquire my team, the "OTC king" Zhao Dong returns after seven years in prison and remains a king!
Recently, a photo of Zhao Dong standing in Crypto Valley suddenly surfaced on social media. In the photo, Zhao Dong is wearing a white sports jacket, smiling brightly, full of hope for life.
After the news broke, social media rarely sparked a series of nostalgic memories, with some even speculating that Zhao Dong had been released from prison, which is why he appeared in the United States. Although later, Bao Er Ye came out to clarify that this was a photo from 2018, Zhao Dong still stirred slight ripples on the calm surface of the cryptocurrency world.
Why does the crypto community care so much about a "washed-up old man" who has already been imprisoned? Zhao Dong may seem ordinary, but his story and his connection to my former OTC team might be worth a look.
Zhao Dong: From a failing student to a cryptocurrency mogul's ups and downs. Born in 1982 in a rural area of Shanxi, Zhao Dong had no prominent background to rely on, but this laid the foundation for his daring and fighting spirit later on. He later enrolled in Dalian Maritime University, and compared to those "top students" who had smooth sailing, Zhao Dong's university life was quite "alternative"—he was demoted two years due to failing courses. However, the twist of fate was that these two "extra" years allowed him to accidentally come into contact with software technology, diving headfirst into the tech field, laying the groundwork for his future as a tech geek.
When the internet wave swept in, the freshly graduated Zhao Dong sensed an opportunity. He teamed up with university alumni Jin Li to develop an internet weather forecast app—Moji Weather.
Today, when mentioning this app, most people may only have a vague impression, but looking back to 2011, when mobile internet had not yet fully proliferated, this purely functional app had already surpassed ten million users, making it a "top player" in the tool application category at that time.
However, the idealism of a tech geek and the rules of the business world seemed to have an irreconcilable gap from the very beginning. As the team expanded, ideological differences and conflicts of interest became increasingly sharp. In 2012, Zhao Dong ultimately chose to leave Moji Weather, which he had co-founded.
However, this departure was not empty-handed; it is rumored that he made his first pot of gold—7 million yuan, which became the "startup capital" for his next journey.
After leaving Moji Weather, Zhao Dong did not stop. He quickly joined the then-renowned venture capital hub, Garage Cafe, as CTO, embarking on his second entrepreneurial venture. No one expected that this decision would place him on the cusp of another era.
In 2013, Bitcoin experienced its first price leap, and Garage Cafe could be called the "cradle of the crypto world"—Li Lin (founder of Huobi), Xu Mingxing (founder of OKCoin), Zhao Changpeng (founder of Binance), Chang Jia (founder of 8btc), Bao Er Ye, and other future big shots of the crypto world all gathered there at that time.
In such an environment, Zhao Dong's "crypto life" officially began. Introduced by Wu Gang, CEO of Bixin, Zhao Dong spent 400 yuan to buy his first Bitcoin, officially stepping into the digital currency field.
In fact, before buying Bitcoin, his technical background had already deeply attracted him to the blockchain's underlying logic of "code is law." After personally entering the field, he became completely "hooked." Initially, he invested 10,000 yuan to buy 10 Bitcoins, and unexpectedly, the price skyrocketed within just two weeks.
Tasting the sweetness, Zhao Dong continuously increased his capital, from 500,000 to 1 million. As Bitcoin prices continued to soar, his wealth grew exponentially.
By the end of 2013, Zhao Dong held over 15,000 Bitcoins, which, at the then market price of 8,000 yuan per coin, easily made his net worth exceed 100 million yuan; if calculated at today's price of 110,000 yuan per coin, the total value would reach as high as 1.2 billion dollars.
With established connections in the crypto world and substantial profits as a foundation, Zhao Dong's understanding of the crypto space was no longer limited to simple arbitrage and spot trading. He began to transition from "investor" to "deep builder"—not only venturing into high-risk futures contracts but also laying out plans in the mining industry, attempting to occupy more positions in the crypto industry chain.
However, the capital market shows no mercy to anyone; "market education" treats both big shots and retail investors equally. In 2014, the shocking "Mt. Gox incident" occurred, causing Bitcoin prices to plummet from over 600 dollars to 102 dollars.
Having continuously leveraged his investments, Zhao Dong suffered a severe blow. According to his later revelations in a WeChat group, on February 10, 2014, he lost over 9,000 Bitcoins in futures liquidation alone, equivalent to 8 million dollars at the time.
And this was just the beginning of the nightmare; the mining operations he had set up also incurred massive losses. In 2014 alone, Zhao Dong accumulated losses exceeding 150 million yuan. At his lowest point, he had only 100,000 yuan in cash left and was burdened with 60 million yuan in debt, falling from "billionaire" to "deeply in debt" overnight.
In the midst of despair, Zhao Dong sensed a new business opportunity—over-the-counter (OTC) trading. At that time in the crypto world, OTC was a "necessity" for everyone: how to legally cash out the money made from trading? This was a dilemma faced by every participant. Leveraging his previously accumulated vast network and industry resources, Zhao Dong focused on "facilitating transactions," gradually building a wide-ranging OTC trading network, profiting by earning transaction fees and spreads from both buyers and sellers.
He later mentioned in his narrative: "Relying on the credit I had built up before, I gradually engaged in OTC trading. At the worst times, a single transaction was less than 3,000 yuan, with a profit of only 60 yuan; at the best times, a single transaction was nearly 100 million dollars."
In August 2015, Zhao Dong publicly stated on Weibo that his monthly OTC trading volume had reached 30 million yuan, with a fee rate of 2%. Thanks to the high returns from the OTC business, within less than two years, Zhao Dong paid off his 60 million yuan debt. At the same time, he also became active in the public eye as a "Bitcoin evangelist." In a widely circulated screenshot, his assertion, "If you don't buy Bitcoin this year, it will be 100,000 dollars when you think of it again," was later regarded by many as a "prophecy."
This is the most effective OTC information Zhao Dong had in the circle. You only see his public statement of a monthly trading volume of 30 million, earning 2% which amounts to 600,000, but in reality, it was far more than that; a base of 300 million is considered low, and the actual receivables should be around 1 million a day.
Another familiar figure: the iron-headed Dong Guangming, who also engaged in OTC, earning 600,000 daily, which gave him the confidence to fight back against fraud. How do I know this?
Because our team has been doing OTC for many years, and we were among the top eight merchants on Binance. At that time, Zhao Dong's financial system was extremely lacking, so he sought out our team. What happened?
In 2017, our early team got involved in OTC trading on Huobi and established a complete series of trading processes.
The team leader, "Brother Yong," had banking resources and a complete reconciliation system, along with a self-developed mini-program to achieve real-time reconciliation, payment collection, and fund flow monitoring.
The team consisted of 14 people, with dedicated financial staff, market operators, transfer personnel, reconciliation staff, and fund allocators, each performing their duties.
Huobi had three blue shield merchants and seven ordinary merchants, while OK had only three accounts, and Binance had no traffic at that time.
When Binance was building its OTC function, our team submitted a detailed operational report and successfully entered the top eight founding merchants of Binance (only eight slots available).
The key account manager promised that all eight accounts would be master accounts, and all later merchants could only be linked to these eight accounts. At this time, an original merchant slot was speculated to be worth 8 million yuan (actual transaction price was 2 million). Zhao Dong then offered 8 million to acquire our team, wanting to obtain our operational system (as he had rapidly expanded, his accounts were very messy, and the flow of funds was complex, often leading to errors), but he wanted us to lead the team in Singapore.
The core issue was that due to the pandemic, we couldn't go out, so it turned into a partnership model. At that time, Zhao Dong was involved in currency exchange operations, with profits of 1 million yuan a day for 5-6 people. To quickly recover funds, he asked trusted merchants to first provide USDT, and when he needed funds, he would transfer the money to their designated accounts.
So our team directly sourced from him, using our own bank cards to operate, with daily flows of 20 million to 40 million. Each USDT only had a profit of one cent, resulting in an annual trading profit of around 10 million. The profits were misled by the key account manager of the exchange, who said that platform tokens had weight, and the more you bought, the greater the support, especially for Binance. As a result, everyone used their profits to buy BNB and HT, with costs of 10-13 USDT, all increasing about tenfold when sold, turning into a small target.
Due to various unclear policies, in April 2020, Zhao Dong was investigated for suspected illegal business operations and was approved for arrest in June. Our OTC team disbanded, and all the partners were forced to stop playing after becoming rich. During that time, all you could see were young models in clubs; they really got tired of playing.
Of course, the final stories of team members investing wildly after becoming rich, ultimately losing everything overnight, won't be described here. (I was fine.)
In the end, Zhao Dong was sentenced to seven years in prison, falling from the heights of an OTC mogul to a prisoner. Looking back at Zhao Dong's journey, from buying one Bitcoin to doubling his wealth, then to liquidation and bankruptcy, through OTC he made a comeback, and then ended up in prison, his rollercoaster experience is filled with legendary colors, and his personal story also serves as a microcosm of the industry's development.
It is precisely for this reason that after Bao Er Ye posted the photo recently, many began to speculate whether Zhao Dong had indeed been released, sparking widespread discussion.
Of course, with Bao Er Ye's clarification, there were also insiders who spoke out, indicating that Zhao Dong had not yet been released. According to information disclosed by the Xijiao Prison in Zhejiang Province, last month, Zhao Dong applied for parole, but it has not yet been successfully processed. That said, although he has suffered in prison, once Zhao Dong is released, he will still be a big shot holding substantial wealth.
The reason is that he holds early shares of Tether, and the Bitcoin that is passively locked up is now also valued highly. Therefore, after his release, Zhao Dong will still be a hero in the crypto world. 2013 was the year of the collective rise of OGs in the crypto world, but looking at the development of each OG today, one can't help but sigh that everyone has their own fate.
Kao Cat is still missing, Hui Yi turned to suicide, Li Xiaolai made a fortune and left behind the statement "Bitcoin is a scam" with a glamorous turn, and Bao Er Ye is still active on the front lines but has embarked on a luxurious life journey, even buying a vegetable farm. Xue Manzi built a small road for the "manzi" but still couldn't resist launching projects to cut leeks. Interestingly, almost all the big shots of exchanges are still active on the front lines.
Li Lin, who once founded Huobi, has changed ownership but has returned to Hong Kong with New Fire Technology. Sun Yuchen, Xu Mingxing, and Zhao Changpeng have all left the mainland, all having received law enforcement gifts, but now they have all become pillar figures in the crypto world. Sun Yuchen is focused on marketing, and Tron’s popularity has not diminished at all. Xu Mingxing, with the idea of donating to the country at any time, is about to list OKX, and Binance has become the largest exchange globally, even connecting with Abu Dhabi. Although Zhao Changpeng, who spent four months in prison, is no longer the CEO of Binance, he still firmly holds the helm.
And you and I are still just ordinary leeks.
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