Changpeng Zhao

Changpeng Zhao
Born:	1977 Jiangsu, China
Charges:	Failure to maintain an effective anti-money laundering program
Sentence:	4 months
Facility:	FPC Lompoc
Status:	Released / Pardoned (2025)

Changpeng Zhao (born 1977), commonly known as CZ, is a Chinese-Canadian business executive and cryptocurrency entrepreneur who co-founded and served as CEO of Binance, the worlds largest cryptocurrency exchange by trading volume. In April 2024, Zhao was sentenced to four months in federal prison after pleading guilty to violating the Bank Secrecy Act by failing to maintain an effective anti-money laundering program at Binance. At the time of his sentencing, with an estimated net worth of $36.5 billion, Zhao was believed to be the wealthiest person ever to serve time in a U.S. prison.

Early Life and Education

Changpeng Zhao was born in Jiangsu Province, China, in 1977. His father was a university professor who was labeled a pro-bourgeois intellect and temporarily exiled during the Cultural Revolution. When Zhao was 12 years old, his family emigrated to Vancouver, Canada.

Zhao attended McGill University in Montreal, where he studied computer science. After graduating, he worked in software development, including positions at the Tokyo Stock Exchange developing systems to match trade orders and at Bloomberg LP developing futures trading software.

Founding Binance

In 2017, Zhao founded Binance with co-founder Yi He. The company launched during the cryptocurrency boom and rapidly grew to become the largest cryptocurrency exchange in the world by trading volume. By 2022, Binance was processing over $65 billion in daily trading volume and had an estimated 120 million registered users worldwide.

Zhao became one of the wealthiest people in the cryptocurrency industry and was frequently listed among the worlds richest individuals, with his net worth at times exceeding $90 billion during cryptocurrency market peaks.

Federal Investigation

Anti-Money Laundering Failures

Federal investigators found that under Zhaos leadership, Binance had deliberately avoided implementing know-your-customer (KYC) verification and anti-money laundering controls as a business strategy to attract users who wished to remain anonymous. The exchange processed transactions for users in countries subject to U.S. sanctions, including Iran, Cuba, and Syria.

Prosecutors alleged that Binance knowingly facilitated transactions that supported child sexual abuse material, illegal drug trafficking, and terrorist financing. Internal communications showed that Zhao and other executives were aware that the platform was being used for illicit purposes but prioritized growth over compliance.

Settlement and Guilty Plea

On November 21, 2023, Binance Holdings Limited pleaded guilty and agreed to pay over $4.3 billion to resolve the Department of Justices investigation—one of the largest corporate penalties in U.S. history. The charges included violations of the Bank Secrecy Act, failure to register as a money transmitting business, and violations of the International Emergency Economic Powers Act.

As part of the resolution, Zhao personally pleaded guilty to one count of failing to maintain an effective anti-money laundering program, a violation of the Bank Secrecy Act. He agreed to step down as CEO of Binance and was banned from any involvement in the companys operations for three years. Zhao also agreed to pay a personal fine of $50 million.

Sentencing

On April 30, 2024, U.S. District Judge Richard Jones sentenced Zhao to four months in federal prison. The sentence was significantly lighter than the three years prosecutors had requested, which would have been above the federal sentencing guidelines range of 12 to 18 months.

Prosecutors argued for an above-guidelines sentence, emphasizing that Zhao had deliberately chose to prioritize Binances growth and his own profits over compliance with U.S. law. They noted that Binances compliance failures had enabled transactions linked to terrorism financing, ransomware attacks, and child exploitation.

Judge Jones, however, found that the unique circumstances of the case—including Zhaos voluntary return to the United States for sentencing, his cooperation with authorities, and the absence of personal enrichment from specific illicit transactions—warranted a sentence at the lower end.

Incarceration

Zhao reported to Federal Prison Camp Lompoc (FPC Lompoc) in California on June 1, 2024, to begin serving his four-month sentence. FPC Lompoc is a minimum-security federal prison camp located in Santa Barbara County on Californias central coast. Zhao was assigned inmate number 88087-510.

Zhao completed his sentence and was released from custody in late September 2024.

Presidential Pardon

On October 23, 2025, President Donald Trump granted Zhao a full presidential pardon, formally forgiving his conviction.

The pardon drew criticism from lawmakers, including Senator Elizabeth Warren, who characterized it as an example of corruption, noting that Zhao had promoted cryptocurrency ventures associated with Trump and had lobbied for a pardon following his conviction.

Impact on Cryptocurrency Regulation

The Binance case and Zhaos conviction marked a significant escalation in U.S. enforcement actions against cryptocurrency exchanges. The $4.3 billion settlement was the largest ever imposed on a cryptocurrency company and signaled increased regulatory scrutiny of the industry.

Following the settlement, Binance appointed Richard Teng as its new CEO and implemented comprehensive compliance reforms, including enhanced KYC procedures and expanded cooperation with law enforcement agencies worldwide.