Binance founder and former CEO Changpeng “CZ” Zhao was sentenced to four months in federal prison on Tuesday, as first reported by Associated Press. Zhao pleaded guilty to money laundering charges Binance’s agreement with the US Department of JusticeThis allowed the company to resolve legal issues and continue operations under a new CEO.
“It is better to ask for forgiveness than for permission,” says the prosecution’s opening statement Court records Last week, he cited Zhao’s alleged statement to Binance employees about compliance with US laws. “He ran Binance with deliberate disregard for the company’s legal responsibilities and ability to cause significant harm, and as a result of his conduct, Binance processed millions of dollars in unlawful proceeds.”
Zhao is the second crypto executive to be sentenced to prison in 2024, after the founder of FTX Sam Bankman Fried, although the situation in CZ is less dire. While FTX emerges from bankruptcy and SBF is content with a 25-year prison sentenceBinance and CZ are expected to increase their fortunes while in prison.
Binance assets have grown significantly as part of this recent crypto boom. Bloomberg Reports. Although Zhao is no longer CEO, he still holds a 90% stake in the company, according to reports Forbes, who estimates his net worth at $33 billion. The co-founder of Binance and Mother of Zhao’s three childrenYi He, has reportedly picked up the slack in crypto exchange operations.
In November 2023, Binance reached an agreement with the US Department of Justice recognizing the company’s “responsibility for historical, criminal compliance violations.” opinion. This ended a year-long investigation into the company as U.S. prosecutors forced Binance to pay $4.3 billion and Zhao to pay a $50 million fine and resign as CEO.
Binance was founded by Zhao in 2017 and quickly became the world’s largest cryptocurrency exchange a year later. However, prosecutors claimed that Binance’s lack of security allowed criminals to transfer millions of dollars through the platform.
In recent years, there has been a heated legal battle between US regulators and Binance. Zhao claimed his crypto exchange is a global company and US law “doesn’t control the world.“However, prosecutors argued that Binance specifically targeted America’s lucrative customer base while ignoring American laws.
Zhao is already planning his future endeavors after his four months in prison are up. The New York Times reports that CZ texted OpenAI CEO Sam Altman about the startup world in late 2023. Apparently independent of this, the billionaire tweeted Last month, he announced that his next project is called “Giggle Academy,” a K-12 digital education program that claims to be “free and available to everyone.” website.
A Concept paper Giggle Academy says it aims to gamify education by “making learning addictive.” The project describes itself as a fully online, revenue-free platform designed to provide access to disadvantaged children in developing countries. The paper lists Giggle Academy’s funding source in a single sentence: “This project is funded by CZ.”
The penalties for CZ’s crimes are quite light compared to what happened to FTX and Sam Bankman-Fried. CZ pays a fine that ultimately amounts to a slap in the face for the multi-billionaire. He will still reap the rewards of the company he founded, but will be the richest person ever incarcerated in a U.S. federal prison. After the four month sentence, it looks like CZ is back out in the world doing tech billionaire stuff.