The former richest Chinese man was released from prison so quickly

The richest prisoner in American history is out of prison.

On September 27, Binance founder and former CEO Zhao Changpeng was released two days early, completing his four-month sentence and appearing on the streets of Long Beach, California as a free man.

Although he was imprisoned in the United States, Zhao Changpeng is not an American. He was born in Jiangsu, China, and has dual citizenship of Canada and the United Arab Emirates.

Zhao Changpeng was a programmer who developed trading software. In 2017, he founded Binance in Shanghai. Within a few years, Binance quickly grew into the world's largest cryptocurrency exchange, with a market share of more than 2/3 at its peak and still above 50% at present.

In September 2024, Binance's cumulative transaction volume exceeded 100 trillion US dollars. Binance's own cryptocurrency "Binance Coin (bnb)" also rose from $0.1 in 2017 to about $605 at present.

In 2021, Zhao Changpeng's wealth once reached 94.1 billion US dollars, making him the richest Chinese in the world. In April this year, before Zhao Changpeng was sentenced in the United States, this figure was still as high as 39.7 billion US dollars, ranking 38th on the global rich list.

Zhao Changpeng's sentence in the United States was originally scheduled to end on September 29. However, because his release date fell on the weekend, according to US law, he was able to leave the Long Beach Reentry Management Center (Long Beach RRM) early on September 27 (Friday).

His lawyer told the media that Zhao Changpeng did not want to be interviewed on the day of his release.

On the day of his release, the 47-year-old Zhao Changpeng's personal wealth continued to decline to US$30 billion, but he is still the richest man in Canada. On the global rich list, he is only one place lower than Li Ka-shing, who has a net worth of US$30.3 billion, ranking 61st.

Voluntary flight to the United States to plead guilty and settle a record

On the social media X (formerly Twitter), Zhao Changpeng’s current profile only has one sentence: co-founder and former CEO of Binance, holder of Binance Coin and Bitcoin.

In fact, Zhao Changpeng's resignation as CEO of Binance, which he founded, is also part of the agreement reached with the United States.

In response to the US's scrutiny of Binance and himself, on November 21, 2023, Zhao Changpeng went to the United States and signed a plea agreement with the US Department of Justice. In the agreement, Zhao Changpeng admitted that Binance violated the US Bank Secrecy Act by failing to implement an effective anti-money laundering program and deliberately violated US economic sanctions.

For a long time before, although Binance established Binance US (binance.us), a cryptocurrency trading platform that complies with US laws and regulations, Binance still allowed and even encouraged some US users to prove that they were "not" in the United States in order to use Binance, which is outside the US regulatory system, to trade cryptocurrencies.

After all, freedom from regulation is one of the most important meanings of the existence of cryptocurrency and an important reason for Binance's growth and development.

According to the plea agreement, Zhao Changpeng needs to pay a personal fine of US$50 million, resign as CEO of Binance, and is not allowed to participate in any activities of Binance for three years. On the same day, Binance announced that Singaporean Richard Teng would take over as CEO.

On the same day, Binance reached a settlement with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), paying fines of $3.4 billion and $968 million, respectively, setting a record for the largest settlement amount in the history of the U.S. Treasury Department.

In addition, the U.S. Commodity Futures Trading Commission (CFTC) also reached a settlement with Binance on November 21, 2023. Binance was required to hand over $1.35 billion in "illegal income" and pay a fine of the same amount. Zhao Changpeng personally also had to pay a fine of $150 million to the commission.

However, this package settlement does not include the 13 charges brought by the U.S. Securities and Exchange Commission (SEC) against Binance for violating U.S. securities laws. The lawsuit has not yet ended, and as Zhao Changpeng is about to be released from prison, the SEC has reiterated that Binance has violated federal securities laws.

In August this year, three more cryptocurrency investors filed a lawsuit against Binance and Zhao Changpeng, accusing the stolen funds of being laundered through Binance.

These pending cases make it uncertain whether Zhao Changpeng can return to his home in the UAE as soon as he is released from prison. Last year, Zhao Changpeng "voluntarily" flew to the United States to sign a plea agreement. He originally planned to leave the United States and return to his home in the UAE immediately after signing.

An investigation by Forbes magazine in the United States showed that Zhao Changpeng purchased a 1,077.68-square-meter, six-bedroom apartment in Dubai for US$13.5 million in October 2021.

The apartment is located in the luxurious residential building "118" in the center of Dubai. It is 45 stories high and has only 28 fully furnished luxury apartments. One of the core selling points of these apartments is the 3.5-meter large floor-to-ceiling windows inside, which allow residents to enjoy a 360-degree view of the magnificent city skyline of Dubai's financial district.

A bedroom in Apartment 118 as shown on the luxury property trading website. Source: luxhabitat.ae

It is worth mentioning that Zhao Changpeng sold his property in Shanghai in 2014 and instead bought about $1 million worth of Bitcoin at a price of about $600 per coin, thus becoming a firm "non-home buyer."

In May 2018, at an online exchange event held by Binance, his partner He Yi revealed that Zhao Changpeng had neither purchased real estate nor cars. Zhao Changpeng himself has repeatedly emphasized the importance of asset liquidity to his personal wealth management, and explained that he avoided buying houses because the liquidity of real estate is relatively weak.

Purchasing real estate in Dubai is also seen by the outside world as a gesture of goodwill to Dubai. He once hoped to establish Binance's global headquarters in Dubai.

The prosecutor hopes to be sentenced to three years, and 161 people jointly plead for leniency to the judge

In the judicial practice of the United States, plea agreements are very common. According to data from the American Bar Association, in recent years, about 98% of federal criminal cases have been settled through plea bargaining and plea agreements.

Zhao Changpeng "voluntarily" flew to the United States, admitted guilt at the personal level and Binance at the corporate level, paid a huge fine for criminal and regulatory settlements, and promised that Binance will operate in the United States in accordance with U.S. laws and regulations, hoping to exchange for a lighter sentence.

According to the plea agreement, the maximum sentence for the plea agreement signed by Zhao Changpeng and the Ministry of Justice is 18 months.

This is already a "leniency". Just over a month before Zhao Changpeng was sentenced, on March 28, FTX exchange's "post-90s" co-founder and CEO, Sam Bankman-Fried, known as the "Jewish King of the Cryptocurrency Circle", was sentenced to 25 years in prison for massive fraud.

But 18 months is still too long. In order to further shorten the sentence, Zhao Changpeng hired top lawyers Benjamin A. Naftalis and William A. Burck.

Zhao Changpeng himself, and 161 people including his family, partner, friends, political and business leaders, colleagues, industry experts, Binance angel investors, and users, jointly submitted a letter of appeal to the judge.

"I apologize for my wrong decision and take full responsibility for my actions," Zhao Changpeng said in his own letter to the judge.

He himself explained why he came to the United States to be punished: "I also don't like leaving unresolved issues. That's why I voluntarily "surrendered" and took responsibility - because I wanted to solve the problem in front of the court and start over."

Zhao Changpeng's partner He Yi wrote in a letter of appeal: "As CZ's life partner, I have known CZ for nearly ten years." CZ is the abbreviation of Zhao Changpeng's name, which is also his self-proclaimed name and the name given to him in the "cryptocurrency circle."

He Yi said in the letter that Zhao Changpeng lived a simple life and knew nothing about the jewelry, luxury goods, luxury cars, and art auctions that the rich are keen on. He also tried his best to take time out of his busy work to maintain high-quality interaction with his three young children. The children were very close to him, and now they always ask: Why is Dad not at home? When can Dad come back? "

He Yi believes that Zhao Changpeng's "biggest mistake was ignorance" and he did not knowingly commit the crime. In fact, apart from Richard Teng, a Singaporean professional manager who replaced Zhao Changpeng as CEO of Binance, He Yi is the "real power" of Binance after Zhao Changpeng left.

The Wall Street Journal said that He Yi holds at least 10% of Binance's Cayman Islands holding company. In the absence of Zhao Changpeng, He Yi has become Binance's largest shareholder. He Yi "holds extensive control" over Binance's marketing and investment business, and also "exerts influence" in the election of the board of directors.

Zhao Changpeng's wife Yang Weiqing also said in a letter of appeal: "He rarely missed any opportunity to take care of the children himself, such as changing diapers, feeding, accompanying the children on trips, etc."

Yang Weiqing called Zhao Changpeng "Changpeng." She continued in the letter: "Changpeng has also taken care of my family for many years. He helped my parents buy a house in Tokyo. He also helped my nephew find a job." She pleaded with the judge to give Zhao Changpeng a lenient sentence and give him a chance to continue to take care of his family.

I had planned to write a book in prison so that I could go out and watch movies during my sentence.

On the morning of April 30, 2024, the day of trial, Zhao Changpeng, wearing a blue suit and a light blue tie, was "on pins and needles" while waiting for the delayed court session.

This is because, just a week ago, the U.S. Department of Justice raised its request for a prison term to three years. According to U.S. law, judges have the corresponding discretion.

Ultimately, African-American federal judge Richard A. Jones sentenced Zhao Changpeng to four months in prison, far less than the three-year sentence recommended by prosecutors.

Obviously Zhao Changpeng and his partners are satisfied with the result.

He posted on social media X, "Thank you for your concern and support, whether it is writing, on X, or expressing support in any other form." He said that "I will focus on the next chapter of my life: education." He also did not forget to give a "soft advertisement" to Binance's User Asset Security Fund (SAFU) in the article.

Later, He Yi retweeted a social post by Zhao Changpeng on March 6, 2023, "Remember 4", and commented "Got it". It seemed that the outside world felt that Zhao Changpeng and his entourage had already "foreseen" the four-month sentence.

Zhao Changpeng began serving his sentence one month after the verdict. While waiting to serve his sentence, Zhao Changpeng said in an X interaction with He Yi that he might use his sentence to write an autobiography:

"I will have some 'quiet' time and will use it to write something." He Yi forwarded this and wrote in English with a Chinese-style thinking that has a sense of "involution": "Want to know how CZ grew from a McDonald's hourly worker to the founder of Binance? Do you want to know the secret of Binance's success?"

But in reality, Zhao Changpeng’s time of peace may not be that long. The sentence itself is not long, and Zhao Changpeng served about two months in the SeaTac Federal Prison (FDC SeaTac) before being transferred to the Long Beach Halfway House (Long Beach RRM) to prepare for his “reentry into society”.

Fortune magazine quoted a prison staff member as saying that in the halfway house, Zhao Changpeng could go out under supervision and even go to the movies.

I wonder if this arrangement has affected the progress of writing the autobiography.

In other words, the United States is convicting Zhao Changpeng not to suppress him mentally or physically, but to make a statement about the world of cryptocurrency.

With Zhao Changpeng's guilty plea, sentencing, and serving his sentence, the United States' regulatory attitude towards the cryptocurrency industry has become increasingly clear: it will not be a complete ban, but it will adopt stricter supervision.