Binance Founder Changpeng “CZ” Zhao has been released from custody on Friday, following the completion of a four-month prison sentence. Zhao’s early release, two days before the scheduled date was in line with the federal parole rules that allows an inmate to be released before the weekend or a public holiday. He was arrested due to pleading guilty to charges associated with the breach of AML laws while he was holding the position of the CEO of Binance.
Binance Founder Released After Serving 118 Days in Prison
Zhao’s 118 days in prison have come to an end, following his conviction in April, for not putting in place measures against money laundering at the exchange. Besides the prison sentence, Zhao was also fined $50 million. Binance, the exchange in focus, was fined $4.3 billion which is one of the largest penalties levied against a company.
The U.S. Department of Justice had initially asked for a longer term saying that Zhao had acted deliberately to break financial laws to benefit himself and his company. Zhao’s legal representatives also claimed that he has accepted blame for the incident and showed remorse and this was one of the reasons that caused the reduction of the given sentence.
His early release was confirmed by a spokesperson for the Federal Bureau of Prisons, who did not disclose any specific information concerning his detention, due to the provisions of privacy laws.
Richard Teng Leads Transition
Since Zhao resigned as the CEO of the Crypto exchange, the company has been run by Richard Teng, who used to work for the regulator in Abu Dhabi. Teng has been working on compliance with the regulations across the globe in the Binance exchange. His leadership has brought in what he calls “Binance 2.0,” a new phase of the exchange where the company is now governed by a board of directors instead of having a CEO.
According to Teng, Zhao, who owns a 90% stake in the Crypto exchange, has no involvement in the day-to-day running of the company or its strategic direction.
Vishal Sachandreen, the head of regional markets at the exchange, also stated that Zhao holds no power within the company, besides his shareholder rights, to guarantee that the exchange has autonomy from its former CEO.
SEC Lawsuit Still Pending
Although Binance founder Zhao has finished his prison time, the Crypto exchange is not out of legal trouble yet. In 2023, the U.S. Securities and Exchange Commission (SEC) sued the Crypto exchange and Zhao for fraud and for allowing U.S. investors to access the exchange.
The lawsuit also accuses Zhao of misappropriating company assets and funnelling them into other investment vehicles that he owned and control, and that the company was an unregulated exchange in the United States.
The Crypto exchange, however, has contested the allegations made by the SEC, and the case is still ongoing in the court. The result of this trial may also have implications for the crypto firm that has initiated numerous organizational and supervisory adjustments in the post-Zhao era.
Binance Coin (BNB) Sees Gains
In the wake of Zhao’s early release, the price of Binance Coin (BNB), the native cryptocurrency of the exchange, went up moderately.
BNB was up by more than 2% on Friday alone to take the weekly gains to nearly 7%. Some market analysts speculated that Zhao’s coming back to public limelight could help assuage investor concerns even though he is not directly involved in the running of the company.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
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