On April 24, 2024, it became known that the founder and former CEO of the largest crypto exchange Binance, Changpeng Zhao (CZ), could be sent to prison for 3 years
The editors of BeInCrypto found out how members of the crypto community reacted to the possible imprisonment of one of the most famous representatives of the crypto industry.
What is CZ accused of?
Binance came under the radar of American regulators in 2018. US authorities suspected the crypto exchange of evading local laws. The Binance team tried to resolve the conflict through the launch of an American subsidiary, Binance.US. Unfortunately, the step didn't help.
Binance's conflict with US regulators escalated in June 2023, when the US Securities and Exchange Commission (SEC) brought 13 charges against the trading platform, including violating securities laws. Zhao was charged by the prosecution with money laundering. The businessman admitted guilt and agreed to pay a fine.
The settlement with the SEC cost Binance $4.3 billion, of which $50 million was an individual fine from CZ. This is not the end of the company’s confrontation with American regulators.. Other regulatory authorities, including the US Department of Justice (DOJ), still have questions about Binance.
In January 2024, Zhao tried to leave for the UAE, but the businessman was not released from the USA. In March, a judge ordered him to surrender all his passports.
The court set Zhao's sentencing for April 30, 2024.. According to prosecutors, the businessman will be able to atone for his guilt with a prison sentence.. Ahead of the sentencing, CZ wrote a letter to the judge in which he apologizes and confirms his willingness to answer for his actions. Also sent to the court were 161 letters from Zhao's family members, friends and supporters.. In their appeals, CZ's relatives ask the judge for a lenient attitude towards the businessman.
Previously, the editors of BeInCrypto collected in one review a detailed chronology of the conflict between the crypto exchange and American regulators.
Reaction of the crypto community
Representatives of the crypto industry came to the defense of CZ. According to them, the accusations against Zhao are untrue.. In particular, the businessman was supported by his colleague, founder of the Tron crypto project Justin Sun.
“It is my sincere wish that CZ returns safely and continues to lead the industry in exploring limitless possibilities.. Time will put everything in its place!” — he wrote.
Screenshot of Justin Sun's tweet
Former Huobi crypto exchange CFO Chris Lee echoed the words of He Yi, co-founder of Binance and mother of three children CZ.
“If the crypto industry can be compared to the Wild West, then CZ is the custodian of this wild land,” Lee wrote.
Tweet by Chris Lee
Members of the crypto community pay attention to Zhao’s great services to the industry. In their opinion, without CZ, the digital asset market would not have grown to its current size.
Many consider the businessman a real hero, and the sentence requested by the prosecutor is too cruel. Zhao's supporters post on X under the tag #FreeCZ.
However, there are those who believe that CZ faced the court fairly. Zhao's opponents are confident that his biography has enough dark places related to breaking the law.
FTX trail
Not without conspiracy theories. Entrepreneur Kim Dotcom believes that CZ faced problems because it was he who triggered the chain of events that led to the collapse of the FTX crypto exchange. The fact is that FTX generously financed American Democrats. Amid the collapse of the crypto exchange, politicians lost their source of money. Dotcom claims he warned Zhao that putting pressure on FTX would backfire on him as Democrats would retaliate.
Chainstone Labs CEO Bruce Fenton, in turn, believes that FTX representatives lobbied pressure on Binance. Allegedly, in this way the exchange team tried to get rid of its main competitor.
Screenshot of Bruce Fenton's tweet
Some members of the crypto community saw echoes of the US-China confrontation in the pressure on CZ.