Changpeng Zhao He has long cultivated the image of a strong boxer in the cryptocurrency world.
when his opponent Sam Bankman-FriedAfter the crypto empire collapsed a year ago, Zhao, or “CZ,” as his fans call him, was in the middle of it all, squandering his money in a very public manner and helping to have an ultimately fatal impact on the companies. of. Years ago he claimed the company’s headquarters was where he was, a veiled attack against regulators trying to weaken the jurisdiction. And this March, when US regulators charged Zhao and his company,Binance Holdings, violating US securities laws, their online response was “4”, which is Zhao’s code for dismissing something unworthy of their attention.
However, on Tuesday, Zhao presented a very different image in a Seattle courtroom. Appearing before a federal judge wearing a dark suit and light blue tie, he pleaded guilty to anti-money laundering and violating US sanctions, including allowing transactions with Hamas and other terrorist groups as part of a sweeping agreement with the Justice Department. Pleaded guilty to criminal charges. Largest crypto exchange operating. Binance itself agreed to plead guilty to criminal charges and pay a fine of more than $4 billion. Zhao stepped down as CEO and will pay a $50 million fine.
Zhao’s surrender is in many ways the culmination of a multi-year trap by international regulators, who had sought to rein in and enforce rules on Binance – and, by extension, the broader industry.
Moreover, it is the second time in less than a year that the crypto world, which is still reeling from a crash that wiped nearly $2 trillion off the market value, has lost one of its biggest stars. Has lost. Bankman-Fried may have been the best-known name in crypto, but Zhao, who was worth nearly $100 billion at its peak in early 2022, was the wealthiest and most powerful.
“This is a big deal,” said Michael Rosen, chief investment officer at Angels Investments. Zhao’s “prominence helped him until it hurt him,” ultimately turning him into a major target for the authorities.
Richard TengA civil servant turned crypto executive, he succeeded Zhao.
Binance Coin, a cryptocurrency also known as BNB that is the main transaction token on the exchange, fell more than 8% on Tuesday.
Zhao played a key role in bringing cryptocurrencies into the mainstream. He built Binance into a juggernaut that at one time controlled nearly two-thirds of spot trading on centralized exchanges – attracting scrutiny from regulators and law enforcement agencies around the world.
The departure of perhaps crypto’s most prestigious remaining executive comes as the industry tries to put its reputation for scandals, scams and other illegal activities behind it. Many entrepreneurs associated with that era, from Bankman-Fried to Do Kwon and Alex Mashinsky, are either in prison or have been charged with alleged crimes that led to billions of dollars in losses.
Zhao faces a minimum of 10 years in prison, but is expected to get no more than 18 months under a plea agreement that appears to give him the harshest punishment faced by other major crypto criminals. Can be saved from. The Justice Department has not yet decided what length of prison sentence they will seek for him.
Born in China, Zhao moved to Vancouver at the age of 12 and became a Canadian citizen. With a computer science degree from McGill University, he began pursuing a career in trading systems, including working at Bloomberg LP, the parent company of Bloomberg News.
In 2013, Zhao was running his own software company in Shanghai when he discovered Bitcoin through a poker game. After working at crypto firms Blockchain.info and OKCoin, he founded Binance in 2017 with chief marketing officer Yi He, with whom he has children.
Binance quickly began an acquisition spree that turned it into a brokerage, digital wallet, venture fund, custody service, data provider, digital-art marketplace, and token issuer — all under Zhao’s direct control.
Within a few years, Zhao became the richest person in crypto. Favoring a buzz cut and black polo shirts bearing the Binance logo, he became a fixture on the crypto conference circuit, spending 580 hours on airplanes in 2022 by his own estimation.
Unlike traditional finance, the lack of separation between business activities such as custodial and trading services in crypto exchanges has raised concerns that giant crypto exchanges like Binance could create systemic risk.
When Bankman-Fried’s FTX imploded in November 2022, billions of dollars of client funds were trapped because FTX had lent assets to a hedge fund he also controlled, Alameda Research, which had made huge losing bets. Zhao himself helped precipitate FTX’s demise with a post on Twitter about selling Binance’s stake in its native token FTT, sparking a stampede to withdraw funds from FTX.
Bankman-Fried was convicted of large-scale fraud in early November and is awaiting sentencing. He faces the possibility of decades in prison.
Binance and other exchanges have argued that they do not present any similar risk because all of their client assets are kept separate and thus available for withdrawal at any time. Zhao himself regularly uses the term “SAFU” in tweets to reassure customers that their funds are safe.
In the third quarter, exchanges accounted for about 38% of all trading volume in the spot market, down from about 55% in the first quarter of the year, according to researcher CCData. By comparison, Coinbase Global Inc., the largest U.S. crypto exchange, had 5.7% market share in the quarter.
While Zhao publicly displayed defiance amid the allegations, Binance executives were working with regulators behind the scenes. Even Zhao’s official statement in March was a bit more cordial than his “4” tweet, which said the company was looking for an “amicable solution.”
The fourth tweet on Tuesday quickly became a favorite of his online detractors. This actually represents, he scoffed, the $4 billion fine Binance will pay.
when his opponent Sam Bankman-FriedAfter the crypto empire collapsed a year ago, Zhao, or “CZ,” as his fans call him, was in the middle of it all, squandering his money in a very public manner and helping to have an ultimately fatal impact on the companies. of. Years ago he claimed the company’s headquarters was where he was, a veiled attack against regulators trying to weaken the jurisdiction. And this March, when US regulators charged Zhao and his company,Binance Holdings, violating US securities laws, their online response was “4”, which is Zhao’s code for dismissing something unworthy of their attention.
However, on Tuesday, Zhao presented a very different image in a Seattle courtroom. Appearing before a federal judge wearing a dark suit and light blue tie, he pleaded guilty to anti-money laundering and violating US sanctions, including allowing transactions with Hamas and other terrorist groups as part of a sweeping agreement with the Justice Department. Pleaded guilty to criminal charges. Largest crypto exchange operating. Binance itself agreed to plead guilty to criminal charges and pay a fine of more than $4 billion. Zhao stepped down as CEO and will pay a $50 million fine.
Zhao’s surrender is in many ways the culmination of a multi-year trap by international regulators, who had sought to rein in and enforce rules on Binance – and, by extension, the broader industry.
Moreover, it is the second time in less than a year that the crypto world, which is still reeling from a crash that wiped nearly $2 trillion off the market value, has lost one of its biggest stars. Has lost. Bankman-Fried may have been the best-known name in crypto, but Zhao, who was worth nearly $100 billion at its peak in early 2022, was the wealthiest and most powerful.
“This is a big deal,” said Michael Rosen, chief investment officer at Angels Investments. Zhao’s “prominence helped him until it hurt him,” ultimately turning him into a major target for the authorities.
Richard TengA civil servant turned crypto executive, he succeeded Zhao.
Binance Coin, a cryptocurrency also known as BNB that is the main transaction token on the exchange, fell more than 8% on Tuesday.
Zhao played a key role in bringing cryptocurrencies into the mainstream. He built Binance into a juggernaut that at one time controlled nearly two-thirds of spot trading on centralized exchanges – attracting scrutiny from regulators and law enforcement agencies around the world.
The departure of perhaps crypto’s most prestigious remaining executive comes as the industry tries to put its reputation for scandals, scams and other illegal activities behind it. Many entrepreneurs associated with that era, from Bankman-Fried to Do Kwon and Alex Mashinsky, are either in prison or have been charged with alleged crimes that led to billions of dollars in losses.
Zhao faces a minimum of 10 years in prison, but is expected to get no more than 18 months under a plea agreement that appears to give him the harshest punishment faced by other major crypto criminals. Can be saved from. The Justice Department has not yet decided what length of prison sentence they will seek for him.
Born in China, Zhao moved to Vancouver at the age of 12 and became a Canadian citizen. With a computer science degree from McGill University, he began pursuing a career in trading systems, including working at Bloomberg LP, the parent company of Bloomberg News.
In 2013, Zhao was running his own software company in Shanghai when he discovered Bitcoin through a poker game. After working at crypto firms Blockchain.info and OKCoin, he founded Binance in 2017 with chief marketing officer Yi He, with whom he has children.
Binance quickly began an acquisition spree that turned it into a brokerage, digital wallet, venture fund, custody service, data provider, digital-art marketplace, and token issuer — all under Zhao’s direct control.
Within a few years, Zhao became the richest person in crypto. Favoring a buzz cut and black polo shirts bearing the Binance logo, he became a fixture on the crypto conference circuit, spending 580 hours on airplanes in 2022 by his own estimation.
Unlike traditional finance, the lack of separation between business activities such as custodial and trading services in crypto exchanges has raised concerns that giant crypto exchanges like Binance could create systemic risk.
When Bankman-Fried’s FTX imploded in November 2022, billions of dollars of client funds were trapped because FTX had lent assets to a hedge fund he also controlled, Alameda Research, which had made huge losing bets. Zhao himself helped precipitate FTX’s demise with a post on Twitter about selling Binance’s stake in its native token FTT, sparking a stampede to withdraw funds from FTX.
Bankman-Fried was convicted of large-scale fraud in early November and is awaiting sentencing. He faces the possibility of decades in prison.
Binance and other exchanges have argued that they do not present any similar risk because all of their client assets are kept separate and thus available for withdrawal at any time. Zhao himself regularly uses the term “SAFU” in tweets to reassure customers that their funds are safe.
In the third quarter, exchanges accounted for about 38% of all trading volume in the spot market, down from about 55% in the first quarter of the year, according to researcher CCData. By comparison, Coinbase Global Inc., the largest U.S. crypto exchange, had 5.7% market share in the quarter.
While Zhao publicly displayed defiance amid the allegations, Binance executives were working with regulators behind the scenes. Even Zhao’s official statement in March was a bit more cordial than his “4” tweet, which said the company was looking for an “amicable solution.”
The fourth tweet on Tuesday quickly became a favorite of his online detractors. This actually represents, he scoffed, the $4 billion fine Binance will pay.
(TagstoTranslate)Sam Bankman-Fried(T)Richard Teng(T)CZ(T)Cryptocurrency(T)Changpeng Zhao(T)Binance