Binance founder CZ, or Changpeng Zhao, is set to be released from prison on September 29, 2024. He has served the last month of a four-month sentence at the Long Beach Residential Reentry Management facility in California, a halfway house where he has been serving his term. It is a significant moment for both CZ and Binance, the cryptocurrency exchange that he founded.
Legal Issues and Reduced Sentence
CZ’s legal battles date back to April 2023 when he pleaded guilty over violations of the U.S. anti-money laundering laws. The Department of Justice found that Binance failed to curb illegal activities like money laundering and cybercrime on its platform.
In November 2023, CZ and Binance pleaded to various charges. Binance agreed to a settlement of over $4.3 billion with the authorities in the United States.
CZ faced three years in jail if things had not gone as well as they did. His attorneys pleaded that he was not playing a part in the illegal activities, and combined with his personal reputation, meant that the jail time was shot down to only four months. Read more: Ex-Binance CEO Changpeng Zhao Receives Four-Month Prison Sentence
Future Plans and Ongoing Legal Challenges
CZ will likely head to the UAE to visit his family after release. However, Binance’s legal troubles continue with a new class-action lawsuit in Washington. Non-Binance users claim the exchange laundered their stolen funds due to weak KYC and anti-money laundering controls.
Impact on Binance and Crypto Market
The CZ release did spark several questions in relation to its possible impact on Binance as well as its native coin, BNB. Some in the crypto world believe his release could boost Binance’s market position and activity. However, CEO Richard Teng clarified that CZ is banned from running the company or holding any official role.
Under Teng, Binance has reportedly done more to become even regulatory compliant. They recently created 19 new licenses in India and Dubai as well as Thailand. Compliance costs are also rising, though. For one, the exchange spent $158 million in 2022 and increased that to $213 million in 2023.
Market Position and Growth of Binance
Despite a decline in trading volume due to tightening regulations, Binance remains the market leader in the cryptocurrency exchange. The exchange had approximately 200 million users globally. It had grown 56% over two years from about 128 million users in 2022 and 170 million in 2023. The site processed around $19.38 billion in daily trading volume with a commanding 43.8% share of the global trading market.
Binance’s total crypto trading volume fell to $4.4 trillion in 2023 from $5.2 trillion in 2022. Even with this drop driven partly by rising regulatory scrutiny of Binance, the latest figures suggest there is solid dominance at the firm. Among its users, 65% own Bitcoin and most keep between 1% and 20% of portfolios in the cryptocurrency.
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