Binance founder, Changpeng ‘CZ’ Zhao, sentenced to four months in prison
The founder and former CEO of Binance, Changpeng “CZ” Zhao, was sentenced to four months in a federal prison on Tuesday, as first reported by the . Zhao pleaded guilty to money laundering violations as part of , allowing the company to resolve legal issues and continue operating under a new CEO.
Legal Troubles and Business Operations
According to the prosecution report, Zhao’s attitude towards compliance with US laws was described as “It’s better to ask for forgiveness than permission.” Last week, citing Zhao’s alleged statement to Binance employees. He led Binance with deliberate disregard for legal responsibilities and the potential for significant harm, ultimately leading to the processing of millions of dollars in illegal gains by Binance.
Cryptocurrency Executives and Financial Growth
Zhao is the second cryptocurrency executive to be imprisoned in 2024, joining the founder of FTX, although CZ’s situation is less bleak. While FTX is emerging from bankruptcy, it is expected that Binance and CZ will increase their fortunes during the prison sentence.
Binance’s assets have significantly grown during this recent cryptocurrency boom. Reports indicate that although Zhao is no longer the CEO, he still holds a 90% stake in the company, with an estimated net worth of $33 billion. The co-founder of Binance, Yi He, has reportedly taken over the cryptocurrency exchange’s operations.
Legal Settlement and Company Background
In November 2023, Binance reached an agreement with the US Department of Justice acknowledging the company’s “responsibility” for historical and criminal compliance violations. This resulted in the end of a years-long investigation, with Binance being forced to pay $4.3 billion and Zhao facing a $50 million fine and resignation as CEO.
Future Ventures and Education Initiative
Zhao is already planning his future business ventures after serving his four-month prison sentence. Reports indicate that CZ reached out to OpenAI CEO Sam Altman in late 2023 about the startup world. His next project, Giggle Academy, aims to provide free digital K-12 education accessible to all.
Consequences and Future Outlook
The penalties for CZ’s crimes are relatively minimal compared to those faced by FTX and Sam Bankman-Fried. Despite the financial penalty, CZ can still reap the rewards of the business he started. However, he will become the richest person to serve time in a US federal prison. After the four-month sentence, CZ appears poised to return to the tech billionaire world.
