Changpeng “CZ” Zhao, the founder of Binance, has been released from prison, according to information from the U.S. Bureau of Prisons (BOP). His release came two days before his expected date, which was originally set for Sunday, September 29. The BOP allows early release when the official release date lands on a weekend or public holiday, as was the case for Zhao.
Zhao’s legal troubles began in April when he was sentenced to four months in prison for breaking the U.S. Bank Secrecy Act (BSA). This law requires financial institutions to have proper safeguards in place to prevent money laundering. Zhao’s company, Binance, failed to set up a strong know-your-customer (KYC) program, which helps verify the identities of users to prevent illegal activities. As part of a plea agreement, Zhao agreed to pay a $50 million fine and resigned as CEO of Binance. Additionally, Binance agreed to a massive $4.3 billion fine to settle various charges with U.S. regulatory authorities.
Zhao’s Sentence and Comparisons
While prison sentences for such violations are uncommon, Zhao’s case attracted significant attention due to his position and wealth. Notably, Arthur Hayes, the former CEO of BitMEX, faced similar charges in 2022 but was sentenced only to probation. Zhao’s sentence of four months in prison was lighter than the three years federal prosecutors initially sought. The judge in Zhao’s case, U.S. District Judge Richard Jones, appeared to be influenced by Zhao’s previously clean criminal record and his positive public reputation. Support for Zhao came from 161 letters written by his friends, family, and business associates, which may have contributed to the leniency of his sentence.
During his time in prison, Zhao, who was identified as inmate #88087-510, spent three months in a low-security facility called Lompoc II, located on the central coast of California. In August, he was transferred to a halfway house in San Pedro, California, where he stayed until his release. Despite serving time in prison, Zhao remains one of the wealthiest individuals in the world, with an estimated net worth of $25.3 billion according to the Bloomberg Billionaires’ Index. This makes him the richest person ever to serve time in a U.S. prison.
When asked for a statement, Zhao’s spokesperson declined to comment.