Binance CZ: Crypto Kingpin ↔️ Convicted
Binance founder Changpeng Zhao (CZ) begins four-month prison sentence in California. From McDonald's to crypto kingpin to convicted we look at the chequered timeline of the America's richest inmate.
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Changpeng Zhao, the former CEO of Binance, has begun serving his four-month prison sentence in California, confirmed by Zhao's custody with his legal team at Latham & Watkins - reports CNBC.
CZ was sentenced to 4 months in prison for money laundering violations.
What’s Lompoc? It’s a Federal Correctional Institution a low-security United States federal prison for male inmates. It houses around 1,300 inmates and offers work or educational programs.
Sam Mangel, who works as a federal prison consultant, told The Block in April.
"It appears CZ will not benefit from any earned time credit programs, and he is expected to serve the full 120 days in federal prison. Though he’ll be uncomfortable, I believe Zhao will be safe and will not be extorted or be in danger."
CZ pleaded guilty last year to failing to implement anti-money laundering controls at Binance. Despite prosecutors seeking a three-year sentence, Zhao's sentence was significantly less.
Reduced sentence after plea deal
How did CZ avoid a harsh sentence despite admitting to major financial crimes?
A flood of glowing letters from friends and family painted CZ as a philanthropist and first-time offender.
Prosecutors didn't deny CZ's charitable work, but argued it shouldn't excuse his crime.
CZ surrendered and cooperated with authorities and had no prior criminal history. Took full responsibility of what happened in a letter submitted to the court in April.
Resignation, fines and compliance measures
In November 2023, Zhao stepped down as CEO, pleaded guilty to violating banking laws, and paid a $50 million fine.
Binance itself agreed to a $4.3 billion fine and will undergo court-monitored anti-money laundering efforts for five years.
Read: Binance looks to ‘next 50 years’ as CZ steps down
From McDonald's to Crypto Kingpin to Convicted
Born in China, Zhao immigrated to Canada with his family at a young age.
He held various jobs including gas station attendant and McDonald's cook before studying computer science. He quit his job at Bloomberg to start Binance.
Zhao co-founded Binance with Ye Hi launch in July 2017.
In January 2018, Binance became the world's top crypto exchange by volume.
Read: Mr and Miss Binance 👫
We look at CZ’s rollercoaster ride
2018-2021
Regulatory Dance: Binance faces scrutiny from regulators around the world, including the US, for possible violations and lack of licensing.
2022
FTX Fiasco: CZ's rivalry with FTX CEO Sam Bankman-Fried intensifies. He fuels FTX's collapse by selling its FTT token and attempting a takeover, raising questions about his motives.
Early 2023
Legal Battles Mount: The US DOJ, CFTC, and SEC launch investigations into Binance for alleged money laundering, unregistered derivatives offerings, and misleading investors. Binance attempts to appease regulators by hiring a compliance monitor and former lawmakers for lobbying.
Mid 2023
Lawsuits and Fines: The SEC sues Binance and CZ for securities violations. Binance faces a class-action lawsuit for its role in FTX's collapse. The CFTC fines Binance and CZ for unregistered derivatives.
November 2023
Guilty Plea: CZ pleads guilty to violating Bank Secrecy Act, agrees to pay a $50 million fine, and steps down as CEO. Binance settles with the DOJ for a record $4.3 billion fine and appoints a compliance monitor.
April 2024
Prison Sentence: CZ pleads guilty and is sentenced to 4 months in prison for money laundering violations. Prosecutors seek a three-year sentence for Zhao, but Judge rejected calls for a harsher sentence, citing positive aspects of CZ's history.
May 2024
Jail Time: Begins serving his four-month prison sentence at a low-security federal correctional institution in Lompoc, California. Expected to serve entire 120-day sentence.
Check out DLNews detailed timeline: From co-founder to convicted: CZ sentencing caps years of Binance legal woes.
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