He has been banned from managing Binance for life, and says he plans to educate children and focus on charity. But does this mean that Czechoslovakia’s days in the cryptocurrency space are already over?
Changping Zhao was the richest prisoner in the world, with Forbes magazine estimating his net worth at $61.6 billion.
Now, after serving four months behind bars for admitting that Binance failed to implement adequate “Know Your Customer” checks — a violation of the Bank Secrecy Act — he walked out of a low-security prison in California as a free man on Friday, September 27.
CZ’s initial release date was scheduled for September 29, but rules indicate that since that would be a Sunday, guards have discretion to release him on Friday instead.
Despite the relatively short sentence, life will be very different for the billionaire. He attained cult-like status while overseeing Binance, but has now been banned for life from running the exchange.
All of this has led to a whirlwind of speculation about what Czechoslovakia will do next. Will he return to the cryptocurrency space, the industry that made him his enormous fortune? Could there be a pivot to artificial intelligence? At his sentencing hearing in April, the 47-year-old suggested that neither had priority, saying:
“In the next chapter of my life, I want to provide opportunities for others, specifically our youth. I am building a platform to provide high-quality education to underprivileged children, all over the world, for free.
To this end, a website called Laughter Academy – but a sneak peek indicates that it’s still in the pre-launch phase.
For its part, Binance wishes CZ well and clarifies that there are no hard feelings since Richard Teng succeeded him as CEO.
“We are thrilled to have CZ home with his family. Although he does not manage or operate Binance, we are excited to see what he does next.”
There is no doubt that the businessman will be keen to update his 8.8 million followers on X, where he was a visible presence before his imprisonment.
The future of Czechoslovakia
Activists contend that the punishment received by Czechoslovakia is little more than a slap on the wrist – with Better Markets previously claiming that there is “overwhelming evidence” suggesting that Czechoslovakia “knowingly, knowingly and intentionally designed and operated Binance to be a crypto money laundering superstore.” “For the most despicable global criminals.”
His four-month prison sentence was well short of the maximum 18 months set out in sentencing guidelines — and miles away from the three years sought by US prosecutors. A former Binance employee, who did not wish to be named, told crypto.news:
“The sentence appears to be very short compared to the crimes he was prosecuted for – it feels like another example of a financial criminal not being prosecuted long enough.”
They continued to argue that, given their personal knowledge of Czechoslovakia and his character, four months were not at all enough time for the fallen businessman to learn from his crimes.
“I imagine he sees this as a small but unfortunate blip on his way toward building his empire.”
The former Binance employee told us they weren’t sure if CZ would ever make an appearance in the cryptocurrency space — but noted that some of his closest lieutenants have now taken the helm of the exchange.
“Even if he never actually ‘works’ in crypto again, the fact that He Yi is still at Binance means that CZ will never be far from crypto.”
He Yi is Binance’s co-founder and Chief Customer Officer, and has been a CZ partner since 2014.
But there’s a bigger question to ask here – how much damage has Changpeng Zhao done to the world’s largest cryptocurrency exchange? The platform has been blocked by some of the world’s largest economies in recent years – including the UK and the US. When asked if his prison time would have a lasting impact on the platform, our source said:
“I don’t actually think so. No one seems to remember the CZ and Binance crimes compared to SBF and FTX.”
There’s no doubt that CZ’s top priority now is to start rehabilitating his image – but he and Binance will continue to face legal challenges in the coming months.
Just a few years ago, any sign of potential headwinds would have attracted the “4” from CZ — a number he used as shorthand for “FUD”: Fear, Uncertainty, and Doubt.
Changping Zhao was no longer part of the empire he helped build, and he might not be a more humble character.