Just 18 months ago, Fortune printed over 800,000 copies of its flagship magazine using a full-length photograph of Binance CEO Changpeng Zhao (CZ). The cover line, printed over his tailored, suit read “The $74 billion man: The Bitcoin boom made Binance founder CZ as rich as Mark Zuckerberg, virtually overnight.”
Fast forward to yesterday and CZ admitted to committing financial crimes, resigned as CEO, and posted a $175 million bond ahead of his sentencing in a Seattle courthouse next year. In short, he might be going to prison in February.
CZ’s rise and fall is one of the most fascinating stories in crypto history. His $96 billion apex exceeded even the estimated $16 billion amassed by former FTX chief Sam Bankman-Fried before going broke.
Read more: Binance customers have traded against themselves with real money for six years
Like CZ, Bankman-Fried is also awaiting sentencing by a federal judge early next year.
CZ operated the world’s largest crypto exchange with 150 million customers, all while pretending to have no headquarters “because Bitcoin doesn’t have an office.” Binance pretended to block access to US customers, yet quietly allowed US customers to buy and sell trillions of dollars worth of assets and profit $1.6 billion from those traders.
Prior to selling millions of dollars worth of BNB in an initial coin offering (ICO) to launch Binance, CZ worked at OKCoin, Blockchain.info, and even Bloomberg. He also had stints with several crypto trading shops, including Fusion Systems and BijieTech.
He defied regulators in the United Kingdom, Netherlands, Germany, Malta, Ireland, Australia, Italy, Thailand, Poland, the Cayman Islands, Singapore, Hong Kong, Ontario, China, and countless other countries. And despite his exchange receiving countless orders to cease operating in various jurisdictions, he persisted.
But, despite this seemingly enormous success, CZ’s reign as crypto’s richest and most successful CEO ended yesterday. He entered a plea agreement in Seattle, Washington, and has personally agreed to pay $50 million for violations of the Bank Secrecy Act, $150 million to settle the Commodity Futures Trading Commission lawsuit, and to-be-determined penalties at his sentencing hearing on February 23.
Binance itself will pay a stunning $4.3 billion fine.
Neither Binance nor CZ have resolved the Securities and Exchange Commission’s (SEC) lawsuit. The SEC still alleges that Binance sold unregistered securities in the form of BNB and BUSD, and has operated an unregistered securities exchange since inception.
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Source: https://protos.com/the-rise-and-fall-of-binances-cz/