Former Binance CEO Changpeng Zhao released from custody on Friday: Bloomberg
Quick Take
- Changpeng Zhao was released on Friday, two days earlier than initially expected.
- Current Binance executives said that Zhao will not have any influence on the exchange’s decision making.
Zhao, also widely known by his initials CZ, was sentenced to four months in prison in April this year after he pleaded guilty last year to failing to maintain an "effective anti-money laundering program." Zhao was given a $50 million fine, and Binance agreed to pay $4.3 billion, in one of the largest corporate settlements in history.
A spokesperson for the Federal Bureau of Prisons declined to provide specific information on Zhao's release.
"For privacy, safety, and security reasons, we do not discuss any incarcerated individual’s conditions of confinement, reasons for transfer, or specific release plans," the spokesperson said in a statement to The Block.
The spokesperson also noted a policy statement that said, "The Bureau of Prisons may release an inmate whose release date falls on a Saturday, Sunday, or legal holiday, on the last preceding weekday," with exceptions.
The U.S. Department of Justice had sought a significantly longer imprisonment of 36 months as they alleged that Zhao knowingly violated laws for the company’s and his own profit. Lawyers for Zhao, on the other hand, said that the former chief has accepted responsibility and “deeply regrets” his offense, asking the court for probation.
Zhao was replaced with former Abu Dhabi regulator Richard Teng, who has led Binance to place heavy investments into regulatory compliance, which he termed as “Binance 2.0.”
The crypto exchange still faces a separate lawsuit from the U.S. Securities and Exchange Commission. The SEC sued Binance Holdings and Zhao last year, accusing the crypto exchange of lying to customers, failing to restrict U.S. investors from accessing Binance.com, misdirecting capital to separated investment funds owned by Zhao, and operating as an unregistered exchange.
“We have pivoted quite differently from the time CZ was CEO, now Binance has a totally different corporate structure, it’s a board-led structure,” Teng said earlier this month at Korea Blockchain Week in Seoul, South Korea. “CZ, of course, as a shareholder retains his shareholder’s rights, but on a day-to-day basis, on an ongoing basis, I work very closely with the board of directors in terms of our global strategy.”
Binance’s current head of regional markets, Vishal Sachandreen, also told The Block in a previous interview that Zhao will not be involved in any of Binance's decision-making.
Nonetheless, Zhao remains Binance’s largest shareholder, owning an estimated 90% stake in the world’s largest cryptocurrency exchange.
Meanwhile, before being incarcerated, Zhao pledged to build an educational platform named Giggle Academy to provide high-quality education to the underprivileged around the world.
"We are delighted that CZ will be home with his family," a Binance spokesperson said in a statement to The Block. "While he is no longer managing or operating Binance, we are excited to see what he does next. Since last year, Binance has continued to thrive under the leadership of our current team, surpassing 230 million users globally, and we are proud to continue leading the industry responsibly."
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