In a highly anticipated move, Binance co-founder Changpeng Zhao, widely known as “CZ”, has been released early from U.S. federal custody. Originally scheduled for release on Sunday, September 29, Zhao walked free two days earlier on Friday, September 27.
His release comes after serving a four-month sentence for failing to establish proper anti-money laundering (AML) measures at Binance, the world’s largest digital asset exchange.
This early release, while raising some eyebrows, followed U.S. prison guidelines, which permit inmates to be freed on the final weekday if their scheduled release date falls on a weekend or holiday.
Zhao’s brief stint in prison, though short in duration, has had significant repercussions for both him personally and the digital asset industry as a whole.
The troubles for Changpeng Zhao and Binance began to surface as the exchange rapidly expanded across the globe. As Binance became the largest digital asset exchange, handling billions in daily transactions, it also attracted regulatory scrutiny from authorities worldwide.
Questions arose about the exchange’s compliance with financial regulations, and accusations began to pile up.
Related: SEC Accuses Binance.US of Non-Compliance and Data Withholding
Binance faced allegations of operating without necessary licenses, running an unregulated securities exchange, and failing to implement adequate Know Your Customer (KYC) and AML programs.
These practices raised concerns about the platform being used for illegal trading, including money laundering and unlicensed money transmitting.
In 2023, these accusations came to a head when the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance. The CFTC accused the platform of allowing U.S. customers to trade digital-asset derivatives without proper registration and failing to prevent potentially illegal transactions.
Soon after, the U.S. Department of Justice (DOJ) followed suit with additional charges against both Binance and Zhao.
By 2024, Zhao was convicted of violating AML laws, unlicensed money transmission, and sanctions violations. This conviction led to Binance paying a record $4 billion fine, one of the largest penalties ever seen in the digital asset world. The prosecutors stated in the sentencing memorandum:
“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.”
Zhao himself was sentenced to four months in a low-security California prison. His early release comes as part of the prison’s standard procedure, and now the digital asset community is abuzz with speculation about what comes next.
Despite his early release, the fallout from Zhao’s conviction has had long-lasting effects. One of the conditions of his criminal settlement is that he is barred from taking any executive or strategic role at Binance.
This effectively limits Zhao’s involvement with the company he helped create in 2017. Furthermore, he is prohibited from engaging in digital asset trading or exchange services for a set period of time.
While Zhao’s leadership was crucial in making Binance a global powerhouse in the world of digital currencies, it appears his direct involvement with the company has ended. A Binance spokesperson stated:
“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. Since last year, Binance has continued to thrive under the leadership of our current team, surpassing 230 million users globally.”
Zhao’s future remains uncertain, with rumors swirling about what his next move will be.
So far, he has remained silent about his plans. According to his lawyer, Zhao has no immediate intention of returning to the public eye or reentering the digital asset industry. However, the Bitcoin community is watching closely.
Many speculate that Zhao may turn his focus to more personal pursuits, such as spending time with his family or increasing his philanthropic efforts.
One of his notable projects, Giggle Academy, is a nonprofit organization aimed at providing free education to underprivileged children worldwide. Zhao’s commitment to altruism reportedly played a role in his sentence reduction.
However, given Zhao’s vast influence in the industry, many wonder if he will eventually make a comeback. As Binance’s largest shareholder, Zhao still holds considerable sway over the company, which now serves over 230 million users globally.
His financial stake in the company ensures he remains a key figure, even if he is no longer actively involved in its operations.
While Zhao’s legal troubles have dominated the headlines, Binance has continued to operate under new leadership.
The exchange has made efforts to tighten its regulatory compliance and improve its AML and KYC procedures, largely in response to the intense regulatory scrutiny it has faced over the past few years.
“We are proud to continue leading the industry responsibly,” a Binance spokesperson said, emphasizing the company’s commitment to working within global regulatory frameworks.
Changpeng Zhao’s early release from prison may mark the end of one chapter, but it leaves open many questions about the future—both for him and for Binance.
While his professional future is uncertain due to the legal restrictions now placed on him, Zhao’s influence on the Bitcoin world is undeniable.
For now, it appears that Zhao may focus on his family and philanthropic endeavors. However, with a net worth estimated at around $60 billion and a substantial stake in Binance, it’s difficult to imagine that he will remain completely removed from the space for long.
The coming months will reveal whether Zhao chooses to stay quiet or stage a comeback. What remains clear is that Changpeng Zhao’s legacy in the world of digital assets is far from over.
