Binance founder and former CEO Changpeng “CZ” Zhao has served his four-month sentence in the United States and left prison on Sept. 27.
The crypto entrepreneur has become the wealthiest person to ever serve jail time in the US, with a reported personal fortune of nearly $60 billion, making him the 25th richest man in the world.
Related: Binance founder CZ walks free from US prison
“We are delighted that CZ will be home with his family,” a spokesperson for Binance told Cointelegraph, adding:
“While he is not 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.”
As Zhao’s post-prison updates are yet to come, it might be worth looking back at the story of how one of the world’s biggest billionaires and crypto executives made it to jail.
What were the charges that brought CZ to prison?
Binance founder CZ was sentenced to four months in prison on money laundering charges in April 2024.
The sentence came a few months after CZ pleaded guilty to criminal charges related to violating US Anti-Money Laundering (AML) laws and stepped down as CEO in November 2023.
According to an official statement by the US Department of Justice, CZ’s guilty plea included not only AML violations but also unlicensed money transmitting and sanctions violations.
Zhao’s four-month sentence was a significant relief as the US DOJ originally sought him to serve 36 months in prison in an effort to “reflect the seriousness of the offense.”
An excerpt from a US sentencing memorandum against Binance founder Changpeng Zhao filed on April 23. Source: Bwbx.io
“Zhao knew that his decision not to implement an effective AML program would result in Binance facilitating transactions between US users and users in Iran and other sanctioned countries and regions in violation of US law,” the prosecutors wrote in the sentencing memo.
Why did the judge order lighter punishment?
Given the DOJ’s willingness to show the seriousness of CZ’s charges, many in the crypto community and beyond were surprised about his eventual four-month sentence.
During the hearing on April 30, Seattle district court Judge Richard Jones justified his decision on the four-month sentence by stating that there was no evidence that Zhao had been informed of any illegal activities at Binance.
CZ arrives at federal court in Seattle on April 30, 2024. Source: CNBC
Judge Jones also reportedly pointed to many letters of support sent by CZ’s acquaintances, claiming that he has never seen such a large amount of uniformly laudatory testimonials about a defendant.
Related: Binance continues to serve Russian users despite 2023 exit
While the crypto community rushed to speculate on CZ’s secret deal with the US government, Judge Jones stressed that CZ’s wealth and influence did not place him above the law.
CZ’s wealth and his 90% Binance stake remain unaffected
While CZ agreed to pay a $50 million fine as part of his case in the US in November last year, Binance also paid $4.3 billion in penalties for breaking US AML laws. However, CZ’s personal fortune has not been affected by the case.
Additionally, the Binance founder continues to hold the majority stake in Binance, reportedly estimated to hold 90% in the exchange.
CZ’s estimated real-time net worth. Source: Forbes
In 2021, CZ claimed that he didn’t own any real estate or much capital in fiat currencies, stating that his crypto holdings made up nearly 100% of his entire net worth. He also publicly disclosed that he sold his house in 2013 to buy Bitcoin (BTC) and start his crypto journey.
According to Forbes, CZ owns 64% of the total supply of BNB (BNB), the native cryptocurrency of the Binance exchange.
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