Binance Bans CZ For Life From Becoming CEO

Binance co-founder Changpeng Zhao (CZ) has been permanently barred from managing the crypto exchange. The ban ensures that Zhao cannot take on any leadership role at the company again.

Zhao’s legal issues began when United States financial authorities charged him with violations linked to Binance’s operations. These included allegations of offering unregistered securities, market manipulation, and lapses in the platform’s anti-money laundering (AML) procedures.

Regulatory Issues and Leadership Shift

Over the past months, Binance has faced regulatory scrutiny from governments in different countries. Its co-founder, Zhao, has also suffered from the crackdown. Last year, CZ stepped down as Binance’s CEO in November following a settlement with the U.S. Department of Justice. This agreement mandated his permanent removal from the company’s “management or operations” role.

Richard Teng, Zhao’s successor as CEO, confirmed the lifetime ban as a vital component of the agreement with U.S. authorities. Although Zhao is barred from managing Binance, he remains a majority shareholder. He retains some influence over the company’s direction, such as proposing changes to management or appointing new board members.

Following Zhao’s ban, Binance now operates with a seven-member board, compared to the single-director structure under CZ. To ensure compliance with the agreement, the U.S. Department of Justice (DOJ) has appointed two external agents to oversee Zhao’s adherence to the ban.

Zhao has stated he has no intention of holding executive roles in the future. Instead, he plans to invest in emerging fields like blockchain, artificial intelligence (AI), and biotechnology.

CZ’s Sentence and Upcoming Release

In July, CZ started his prison term at the Federal Correctional Institution in Lompoc, California. While federal prosecutors had initially pursued a three-year sentence, Zhao received a shorter term. In addition to his prison time, he has agreed to pay a $50 million fine.

Zhao is expected to be released on September 29 and has recently been moved from the Federal Correctional Institution in Lompoc to a rehabilitation center in Los Angeles, a standard procedure to help inmates reintegrate into society.