Binance Founder, Changpeng Zhao Finally Released from Jail after Four Months
Zhao was released on Friday, two days ahead of his scheduled release date of Sept. 29th
Binance co-founder and former CEO, Changpeng Zhao, known popularly in the crypto world as “CZ” finally gained is freedom on September 27 following a four month stint in jail.
The court announced the sentence after plead guilty to failing to maintain an effective anti-money laundering program.
CZ’s Arrest
His legal troubles began when global regulators increasingly started scrutinizing the exchange’s operations. They accused Binance of operating without proper licensing, failing to comply with anti-money laundering standards and aiding illegal trading practices.
Finally in March 2023, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against the firm, accusing it of allowing U.S. residents to trade crypto derivatives without proper registration, violating U.S. federal law. CFTC also alleged that the exchange, under Zhao’s leadership, had inadequate Know Your Customer (KYC) and anti-money laundering protocols, potentially facilitating illegal activities.
Following these allegations, Zhao agreed to leave Dubai for the US where the anuthories arrested him following his guilty plea in November 2023. He was eventually convicted in 2024 and sentenced to four months in prison. The court also mandated CZ pay a $50 million personal fine, while Binance received a $4.3 billion penalty.
CZ’s Release
Zhao regained his freedom on Friday September 28 after spending almost four months at a minimum-security prison, Lompoc II, on California’s central coast. Authorities moved him to a halfway house in San Pedro, California in late August.
Although Zhao’s prison term would end on Sunday, the release comes two days earlier because, according to prison rules, authorities must release inmates whose official sentence ends on a weekend or holiday on the last preceding weekday.
CZ is no Longer Binance CEO
His release however does not indicate that he will continue as the CEO of Binance as the terms of the settlement mandates him to permanently resign as CEO of Binance and stay away from any “day to day” activities involving the company.
“We are delighted that CZ will be home with his family. While he is not managing or operating Binance, we are excited to see what he does next,” a Binance spokesperson said.
However, he still the company’s largest shareholder reportedly holding over 90% in Binance shares.
How CZ’s Release Affects the Crypto Market
Following Zhao’s release, Binance Coin (BNB) has seen a 2% increase, stretching its weekly gains to nearly 7%. His release stirred speculation from analysts about the potential impacts on the cryptocurrency market as he is one of the major influential figures among investors.
Zhao remains one of the richest people in 2024. On Forbes updated billionaire list, Zhao holds the number 25 spot in the overall rankings with a net worth of $60.6 billion. He is currently the number one wealthiest person out of the 17 people from the cryptocurrency industry on the list.
