Binance Founder CZ Released Early, Crypto Industry Watches Next Moves
Changpeng “CZ” Zhao, the founder of cryptocurrency exchange Binance, was released from U.S. custody on Friday, September 27, 2024, two days earlier than his scheduled release date. Zhao had been serving a four-month sentence for failing to maintain an effective anti-money laundering (AML) program at Binance.
The early release, permitted under federal rules when a release date falls on a weekend, marks the end of a tumultuous legal journey for one of the crypto industry’s most prominent figures. Zhao’s sentence, which began in May 2024, included time in a low-security facility in California and a halfway house in Long Beach.
Zhao’s legal troubles stemmed from a November 2023 guilty plea to charges of neglecting proper AML controls at Binance, which allowed the platform to be misused by cybercriminals and terrorist groups. As part of the settlement, Binance agreed to pay a staggering $4.3 billion fine, while Zhao personally paid a $50 million penalty and stepped down as CEO.
Despite the legal setbacks, Zhao remains a significant player in the crypto world. With an estimated net worth of $30-60 billion, he is considered one of the wealthiest individuals to have served time in a U.S. prison. Zhao retains a majority stake in Binance, reportedly around 90%, although he is barred from managing or operating the company.
The crypto industry is now watching closely to see what Zhao’s next moves will be. Prior to his incarceration, he announced plans to launch Giggle Academy, an educational platform aimed at providing high-quality education to underprivileged individuals globally. This non-profit venture could be where Zhao focuses his efforts post-release.
Binance, now led by CEO Richard Teng, continues to operate as the world’s largest cryptocurrency exchange by trading volume. The company has undergone significant changes since Zhao’s departure, including the appointment of its first board of directors in April 2024.
A Binance spokesperson commented on Zhao’s release, stating, “We are delighted that CZ will be home with his family. While he is no longer managing or operating Binance, we are excited to see what he does next.”
As the crypto industry continues to navigate regulatory challenges and market volatility, the impact of Zhao’s return to public life remains to be seen. His experience and the high-profile nature of his case have brought increased attention to compliance issues within the cryptocurrency sector, potentially influencing future regulatory approaches and industry practices.
