Changpeng ‘CZ’ Zhao: Don’t compare me to SBF, it’s an insult

Changpeng Zhao, better known as CZ, the man who built Binance from the ground up, doesn’t want his name anywhere near Sam Bankman-Fried’s.

In his own words, comparing him to SBF, the convicted founder of FTX, is like “comparing somebody who’s stealing money versus somebody who failed to register a company.” 

CZ, blunt as always, says he’s got no interest in SBF’s brand of downfall. At the Coca-Cola Arena in Dubai, he made a high-profile appearance a few days after his release from prison, greeted like a rockstar with fans lining up for selfies, one fan shouting, “he’s a martyr,” and another declaring, “the king is back!”

But CZ isn’t picking up the reins at Binance, a move that’s part of a plea deal with the U.S. Department of Justice. Now he’s a “passive investor,” content to watch from the sidelines while Binance moves into a new era.

Binance under DOJ scrutiny and CZ’s plea deal

CZ’s exit from Binance didn’t come easy. After years of building Binance into a global crypto powerhouse, he was forced out due to legal trouble with the U.S. government. Earlier this year, CZ pled guilty to failing to implement an adequate anti-money laundering (AML) program at Binance, leading to the four-month stint at a minimum-security prison in California.

The U.S. government slapped a $4.3 billion fine on Binance, demanding accountability from one of the most prominent crypto leaders. It was a clear message: play by the rules, or face the consequences.

CZ’s time in prison made him the wealthiest U.S. inmate in history. Prosecutors originally pushed for a three-year sentence, hoping to set an example, but CZ’s cooperation earned him a shorter term. Though his days in lockup were no luxury retreat.

CZ kept a low profile, armed with advice from a prison consultant to stick to a modest commissary budget and keep his head down. He filled his time with workouts, writing a book, and connecting with fellow inmates interested in crypto.

Some inmates soon recognized CZ as the “big Bitcoin guy” and started asking him for investment advice. “Many of them asked, like, which coins should they buy?” he said, laughing. Guards even wanted tips, but CZ claimed he was out of the loop. He had no access to market updates and was as blind to crypto trends as anyone else inside.

One particular inmate, a bank robber serving 25 years, stood out as a crypto enthusiast and became CZ’s workout buddy. Together, they spent 90 minutes a day in the open-air gym, pushing through a routine that helped CZ stay grounded.

Since his release, CZ’s been working to connect this inmate with pro-bono lawyers to reduce his sentence, using his influence for a cause he says he believes in.

Binance moves on without CZ

Meanwhile, Binance had to adjust. With CZ stepping down, the DOJ wanted a clean break between him and Binance, leading to the appointment of Richard Teng, a former Abu Dhabi regulator, as the new CEO.

But CZ still casts a big shadow. As the largest shareholder, he’s not entirely out of the picture, though he claims Binance’s leadership consults him “very rarely.” He’s still a co-defendant in ongoing civil cases, including one filed by the Securities and Exchange Commission.

Binance’s co-founder, Yi He, with whom CZ has children, is still deeply involved, ensuring some continuity despite CZ’s absence. And she has been doing a remarkable job so far.

Even before his legal troubles, CZ made major moves, like investing $500 million in Elon Musk’s Twitter takeover, now called X. That hasn’t aged well though, from a financial perspective, as Twitter’s valuation plummeted after Musk’s chaotic revamp.

But CZ’s unbothered, saying that, “We’re very long-term investors.” Musk’s Twitter, in line with his political leanings, became a significant platform for Trump’s reelection efforts.

Trump’s win, widely seen as positive for crypto due to his skepticism of regulation, coincidentally gave CZ’s net worth a $12.1 billion boost, taking it to nearly $53 billion, according to Bloomberg.

While CZ declined to weigh in on Trump’s victory, he did comment on Musk’s overhaul of Twitter, now X. “I think after Elon took over, things have moved a lot faster,” he said. “There’s new features, change happens at a much faster pace.”

The crypto community, like CZ, is keeping an eye on how Musk’s platform could change under Trump 2.0, especially with the promise of more crypto-friendly policies.

A different life behind bars

Before he made his triumphant return to Dubai, CZ spent his sentence at Lompoc II, a low-security prison in California’s Santa Barbara County, notorious for its bland meals and strict racial segregation, a system meant to minimize violence. It was a far cry from his usual lifestyle.

CZ, known for his paleo diet of proteins and vegetables, had to settle for a high-starch, low-protein diet heavy on Spam-like meat and occasionally fried fish. “I usually stick to a paleo diet, just proteins and veggies. That’s not possible there,” CZ said, underscoring the stark contrast to his previous life.

His cellmate, the bank robber-turned-crypto lover, was just one of many connections CZ made in prison. With the monotony of prison life setting in, CZ found purpose in helping his friend fight for a reduced sentence. His experience behind bars seems to have given him a new perspective on the world, especially as he plots his next moves.

His interests are changing too. He’s eyeing investments in artificial intelligence and biotechnology, as well as launching Giggle Academy, a nonprofit educational app aimed at making learning accessible.

While he says his “emotional attachment” to Binance remains, he’s clear that his direct involvement has come to an end. “It’s like a kid, right?” he says of Binance. “Once it grows up, it doesn’t need to be attached to me.”

As he steps back, Binance is still one of the largest crypto exchanges globally, but Teng and the leadership team now bear the weight of the company’s direction.

CZ’s image in the crypto community is unlikely to vanish, even if he’s no longer on the front lines. He’s left a mark, built a legacy, and whether from behind bars or from a distance, CZ’s influence on crypto is undeniable.