When Donald Trump secured the 2025 US presidency on Tuesday night, some of the world’s richest men were celebrating their own, personal windfalls. No one made more money overnight than billionaire Elon Musk, for example, whose net worth popped from $264 to $290 billion within 24 hours of Trump’s victory. Shares of his automaker Tesla have soared 20% since Trump beat Kamala Harris.

However, the crypto industry also had its own, albeit slightly more modest, tale of newfound riches. According to an estimate by Bloomberg, the net worth of Binance founder Changpeng Zhao (CZ) rallied an estimated $12 billion from US election day to the following morning.

On Tuesday, Bloomberg said CZ was worth $38 billion. Today, it estimates him at $52.7 billion.

Forbes has its own, more generous methodology for estimating the Binance executive’s wealth. Although it does not provide a history of its estimates, as of today, Forbes claims he is worth $60.6 billion.

CZ’s wealth derives predominantly from his 90% equity in Binance, the world’s largest crypto exchange with more than 150 million registered users. Although the company is private and does not file publicly accessible financials, Bloomberg estimates the company generates $9.8 billion in annualized revenue from spot and derivatives transactions. 

CZ has also said he owns bitcoin and BNB personally.

Read more: A complete career timeline of Binance’s billionaire chief Changpeng Zhao

Analysts attributed CZ’s overnight enrichment to a rally in crypto prices following Trump’s win. With bitcoin up 7% this week and hundreds of billions of dollars added to global crypto market capitalizations, there were understandable increases in Binance’s equity value as a crypto-holding entity that benefits from the fortunes of its crypto-holding customers.

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Fans of Binance cheered on September 27 when founder Changpeng Zhao (CZ) walked free from US Bureau of Prisons custody. One of crypto’s wealthiest entrepreneurs had seemingly emerged victorious – fines paid, prison sentence served, and according to Forbes, billions of dollars richer. 

However, a health check of the market indicates that CZ was better for crypto prices while he was in prison.

Whether by luck or cause, CZ’s departure from his Lompoc II prison and California halfway house has been bad news for crypto investors. Indeed, Binance’s own estimate of the market capitalization of all crypto assets has declined by $200 billion since CZ was freed last week.

Binance’s own exchange token has fared even worse, declining 9% since his departure date.

CZ pleaded guilty to permitting money laundering on Binance, paid a $50 million fine, and received a four-month prison sentence. Many people were expecting his exit from custody to trigger a bull run — but it did the exact opposite.

“CZ officially released! Let the bullrun begin!” said one trader. “CZ is officially free. Hope your bags are packed. The bull run is undoubtedly here,” another cheered. “Bull market is officially on,” said another.

Read more: Explained: How bitcoin market sell orders cause flash crashes

Unfortunately, despite an endless stream of similar posts pouring onto social media, the anticipated October bull market — Uptober — never materialized. CZ has said nothing since his release except that food tastes better, and “let me chill for a bit.” While crypto waits for his next move, prices are drifting in the wrong direction.

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The post CZ’s release was supposed to launch Uptober — instead, we lost $200B appeared first on Protos.

Former Binance chief Changpeng Zhao’s four-month prison stay might have actually been a pretty lucrative career move. Indeed, from the moment he entered a California prison earlier this summer to his release last week, the Binance founder might well have made more money than most executives could hope to earn in their lifetime.

Although his wealth is mostly derived from equity in privately held companies, Forbes’ calculations of CZ’s net worth indicate that he could have made billions of dollars personally while serving his prison sentence. In fact, according to one such estimate, he may have made $25 million for every day he was in prison.

However, it’s important to note that another news agency with a more conservative methodology, Bloomberg, estimates that CZ actually lost money while in prison.

Detailed commentary for these estimates appears below.

Determining the dates of CZ’s prison term

In November 2023, CZ pled guilty to wilful violations of the Bank Secrecy Act that enabled money laundering through Binance.com. As a result, he agreed to resign as CEO, pay a $50 million fine, and never again publicly dispute the Statement of Facts from the US government’s lawsuit against Binance.

The judge subsequently recommended the Seattle area prison Seatac. However, for nearly five weeks, post-sentencing due process and legal formalities delayed CZ’s prison entry.

Ultimately, the Bureau of Prisons admitted him to Lompoc II, a minimum security prison near Santa Barbara, on June 2, 2024.

Once in the custody of the Bureau of Prisons, the probation department scheduled his release for September 29. However, due to his release date landing on a weekend, he officially exited his Long Beach halfway house two days early. He tweeted a standard crypto greeting on the day of his release.

In summary, CZ was in prison 117 days from June 2 to September 27, 2024. Because he paid his $50 million personal fine before he entered prison, his fine is not a factor in determining his net worth change from entry to exit.

Read more: New CZ lawsuit will ‘put blockchain analytics on trial,’ says lawyer

CZ’s 117-day change in net worth 

Now with the exact dates known, the next challenge is to calculate CZ’s net worth change.

Although CZ has disclosed holdings of crypto assets BTC and BNB, most of his net worth is in the form of equity in Binance-affiliated companies. Sadly, because these companies are privately held and CZ has no obligation to publicly report his assets, this opacity makes it extraordinarily difficult to accurately calculate his net worth.

In truth, only CZ knows his own net worth.

Nevertheless, two news companies have attempted to estimate CZ’s personal wealth: Bloomberg and Forbes. Sadly, Forbes does not disclose its methodology.

Bloomberg, to its credit, rates its confidence at the lowest level possible (one out of five). It values CZ’s holdings of BTC, BNB, and Binance.us at $0 and also discounts the value of his Binance.com equity by 50% from the average EV-to-sales multiple of three peers: Coinbase Global Inc, Galaxy Digital Holdings Ltd, and Riot Platforms Inc.

On June 2, Bloomberg estimated CZ’s net worth at $36.5 billion. However, on September 27, it estimated it at $30.8 billion. Bloomberg analysts, therefore, believe that CZ lost money during his prison term.

Consider Forbes’ inverted estimate, however.

Forbes totally disagrees with Bloomberg

On September 27, Forbes estimated CZ’s net worth at $61 billion — nearly double Bloomberg’s estimate from the same date. This likely reflects Forbes’ non-zero estimates of CZ’s crypto assets and a more modest discount on his equity in Binance.us and Binance.com.

Unfortunately, Archive.org’s WayBack Machine did not archive Forbes’ estimate on CZ’s prison entry date of June 2. On the next-earliest available snapshot from May 7, the outlet estimated his wealth at $33 billion. On Archive.org’s next snapshot from July 12, this had rocketed to an estimated $57.8 billion.

Even assuming the higher of those two numbers for CZ’s June 2 prison entry, Forbes estimates that his net worth rose by at least $3 billion by the time he walked free. At a minimum, it is probably safe to assume that Forbes estimated CZ to have gained at least $3 billion — below $58 billion to $61 billion — during his prison term.

If true, that would mean that CZ gained $25 million per day in personal net worth for every day he served in prison.

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Jailed former Binance CEO Changpeng Zhao says he may use his upcoming four months of ‘quiet time’ to write a book on his tenure as the leader of the world’s biggest crypto exchange.

Zhao tweeted on Sunday that he’s considering embarking on a literary career after a Binance supporter said they were “Waiting for the CZ book, the book for crypto upcoming leaders.”

“I got some ‘quiet time’ coming up. Will use that to write something,” the disgraced exchange boss replied.

Zhao received a four-month prison sentence last month after pleading guilty in the US to several charges of violating the Bank Secrecy Act (BSA). Prosecutors recommended he receive a three-year sentence while Zhao’s defense pushed for zero jail time.  

In response to another user, Zhao said that he’s “Got nothing else to do.” Indeed, it appears that Zhao will need to find something to occupy the entire four months as, due to sentencing laws, he’ll likely be required to serve his entire sentence.

Three Arrows Capital co-founder Su Zhu also received four months in prison after he tried to flee the country, violating a court order. He described his time in jail as an ‘enjoyable experience overall’ and said “I think it’s definitely good for you.“

Read more: Expert in losing money Su Zhu says you can afford to lose $10k

BitMEX co-founder Arthur Hayes also received a relatively small sentence of just six months house arrest after failing to implement anti-money laundering protocols in the operation of his exchange. FTX chief Sam Bankman-Fried, on the other hand, received a far heftier 25-year prison sentence for his high-profile crimes.  

During his prison stay, Zhao will also have time to work on his ‘Giggle Academy,’ a recently-announced ‘platform for online education for underprivileged kids.’

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The US has ordered former Binance CEO Changpeng Zhao to surrender all of his passports, active or expired, to a third party and keep authorities updated on his travels. 

That’s according to a legal filing submitted yesterday, modifying Zhao’s bond conditions for release. As part of the bond, United States District Judge A. Jones ordered Zhao to remain in the US for the remainder of his sentencing and notify court authorities of any planned travel. 

The ex-Binance chief will also give up his Canadian passport to a third-party custodian who must accompany him whenever he travels anywhere that requires identification. In addition, the filing states Zhao “may not apply for or obtain a new passport or travel document from any country without the Court’s permission.”

The third parties holding the former Binance exec’s passports can only return them to him with the permission of pretrial services or the court.

Read more: Binance ordered to pay $2.7B to CFTC, former chief to pay $150M

Zhao pleaded guilty last November to violating the Bank Secrecy Act, failing to register Binance as a money services business, and failing to create an effective anti-money laundering program. He is scheduled to be sentenced on April 30.

Last week the US applied to modify Zhao’s bond requirements with the travelling restrictions. In response, Zhao argued the restrictions would be unnecessary as his travel “has not been an issue to date.”

Arguing against Zhao’s defense, the government said, “something that ‘has not been an issue to date’ can become an issue in the future.”

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On November 21, 2023, Binance founder Changpeng Zhao (CZ) traveled to the US to plead guilty to federal crimes. Countless media stories published an assumption that he voluntarily surrendered to authorities in Seattle. However, new facts about France, its Financial Action Task Force (FATF), and a last-minute plea is casting doubt on CZ’s self-described cooperative behavior.

A globe-trotting billionaire, CZ has stayed in several countries that do not honor US extradition requests, including China, Bahrain, and the UAE. For years, he has repeatedly declined invitations from family, friends, and crypto celebrities to attend events within the US or Canada. His deflections about geolocating himself or committing to speaking in-person at any US conference became standard fare during media interviews.

In short, it was common knowledge that CZ has long avoided the US. Now, with the benefit of hindsight, his travel choices made perfect sense.

For years, the Commodities Futures Trading Commission (CFTC), Department of Justice, and other regulators were quietly investigating Binance and CZ. Their enforcement efforts recently culminated in a record-setting $4.3 billion fine and multi-count criminal settlement.

CZ will likely go to prison this year. A federal judge is scheduled to sentence him next month.

Why CZ’s visit to Seattle might not have been entirely voluntary

Despite countless articles proclaiming CZ voluntarily went to the US, there are reasons to doubt this characterization.

Firstly, CZ would have had to enter the US three months later, anyway — to attend his sentencing. Whether CZ had entered the US voluntarily in November or waited until February, the ultimate outcome is that he must attend his criminal sentencing in-person.

Therefore, the maximum period of time that could possibly be characterized as CZ voluntarily staying in the US is the three months from late-November through February’s sentencing hearing.

However, these three months of ‘cooperation’ might be highly motivated by other, less voluntary, regulatory proceedings. French law enforcement were actively probing whether Binance advertised financial services before obtaining regulatory approval. Unlike its non-cooperation with the US, the UAE has a treaty stipulating “judicial cooperation” with France. UAE authorities might have extradited CZ if French authorities ever chose to pursue criminal charges against him.

CZ had courted French officials, even having dinner with French President Macron. Despite some initial praise from Finance Minister Bruno Le Maire, French parliament members like Aurore Lalucq were critical of Binance’s registration due to its worrisome investigations worldwide.

Read more: Scoop: European states working with SEC on Binance investigation

Binance also has plenty of problems elsewhere in Europe. For example, the Financial Conduct Authority (FCA) denied it permission to operate in the UK due to its notorious lack of regulatory compliance. The Netherlands’ central bank fined Binance for offering digital assets without a license, saying that avoiding levies gave it an unfair competitive advantage.

FATF negotiations with Dubai

Just months ago, CZ was living in Dubai and considered moving Binance’s global headquarters to the UAE. The government granted him enviable Emirati citizenship. CZ might have enjoyed the non-extradition status of UAE had he not traveled to Seattle in November — but it may not have lasted long.

The FATF added UAE to its “grey list” of countries with lax anti-money laundering and anti-finance terrorism controls in early 2022. In response, UAE had been negotiating with FATF to be removed from that list. FATF had mentioned Binance as an area of particular money-laundering and financing of terrorism concerns. Binance has held a dismissive attitude toward terrorism financing, which included making excuses for its seeming inability to stop those activities. Binance allowed groups like Hamas to receive stablecoin donations through Binance accounts.

The FATF has especially reported on the UAE’s efforts to improve its effectiveness to combat money laundering and terrorist financing. It noted the nation’s improvements on a few line items in its list of 40 recommendations.

Changpeng Zhao’s willingness to take a plea deal in the US could have been a dodge of consequences elsewhere.

Maybe CZ didn’t voluntarily arrive after all

Whether CZ’s trip to the US in November was voluntary is highly debatable. First, he would have had to enter the US three months later for sentencing involuntarily. Second, France was in advanced stages of regulatory probes into Binance — and unlike the US, France does have an extradition policy with CZ’s home country, UAE.

Finally, FATF had brought up Binance to UAE officials as particularly concerning; and UAE officials were negotiating steps to remove the country’s FATF Grey List designation. Perhaps bringing Binance into compliance — and CZ to justice — might have been part of UAE’s demonstration of its commitment to FATF.

In any case, CZ is in the US now. He has desperately tried to gain permission to leave the US for even a few weeks to no avail.

Read more: A complete timeline of Binance and CZ’s tumultuous 2023

Days after his guilty plea in November, he requested leave for travel to Dubai, which a Seattle judge quickly denied. In December, he bid again for permission to travel for a scheduled family member’s surgery in the UAE while he awaited trial.

He even offered to pledge all of his Binance US equity as surety for his return in February. He comically claimed it was worth $4.5 billion as of several years ago. (Nowadays, Binance US has collapsed in value, intermittently processes USD withdrawals, and is the defendant in a sweeping SEC lawsuit). However, that bid was similarly rejected by a US federal judge.

Only a few more weeks remain until CZ is sentenced for committing federal crimes.

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Binance and founder Changpeng Zhao (CZ) have had a defining year in 2023. The world’s largest spot crypto exchange is surviving a criminal settlement with the US Department of Justice (DoJ) plus multi-billion dollar fines to the Commodity Futures Trading Commission (CFTC) and bureaus of the US Treasury.

All the while, it continues battling another unresolved, multi-billion dollar SEC lawsuit.

Before the start of 2023, alarm bells were already sounding that Binance was on the brink of serious trouble. It was the subject of several probes by US agencies.

When Russia invaded Ukraine in February 2022, Binance openly defied US government wishes to stop serving Russia-based users. By July that year, Reuters staff had kicked off a long-lasting feud with the firm. A string of exposes revealed Binance knowingly skirted US sanctions by serving clients in Iran, and that the exchange has washed billions in crypto for money launderers.

News that Binance was the subject of yet another probe by the Securities and Exchange Commission (SEC) erupted that same month. By November, the UK grilled Binance and other firms as part of an inquiry launched in the wake of FTX’s collapse.

So, by January 2023, it seemed likely that the world’s largest crypto exchange was on the first page of a monumental year.

Binance admits to commingling funds to kick off 2023

January 2: Data Finnovation researchers find evidence that BUSD was not always fully backed by US dollars as promised.

January 24: Binance admits it commingled B-token reserves, including BUSD, with customer funds. It blames the error on a failure of oversight and subsequently fuels concerns over its lack of financial backing.

March 10: The DoJ appeals a proposal by Binance US to buy Voyager Digital’s assets. The firm, which declared bankruptcy in July 2022, had worked out a tentative deal with Binance US worth billions of dollars. The decision to appeal also heightened suspicions that Binance US is under investigation by the DoJ.

March 14: In the UK, Binance freezes GBP deposits and withdrawals.

Spring showers bring accusations and denials

At the end of March, a CNBC report alleged that Binance helped traders bypass know-your-customer (KYC) controls. Three days later, the CFTC alleged that trading firms controlled by CZ through proxies traded against customers on Binance and Binance US.

These accusations were followed by steep bitcoin discounts triggered by the announcement of ramp closures in Australia, and a round of lay-offs by the end of spring.

May 1: Binance alleges that someone used ChatGPT to generate false reports that CZ had connections to the Chinese Communist Party.

The following day, an analysis shows that verified customer account logins for Binance can be traded on the dark web. Binance then decides to blame false identities for its failure to stop terrorism funding.

May 8: Binance pauses bitcoin withdrawals due to soaring transaction fees caused by demand for Bitcoin Ordinals.

Read more: Aussie Binance users withdraw, bitcoin trades at 20% discount

May 30: Binance Australia users liquidate enough bitcoin to trigger a 20% discount compared to other bitcoin markets and withdraw their funds. Local users were getting ahead of the firm’s subsequent fiat off-ramp closures by dumping their holdings, Binance said, which led to the sharp decrease in bitcoin price.

May 31: Anonymous sources say Binance is likely to conduct a round of layoffs despite a pledge to hire more people.

Binance’s EU and Australian headquarters raided, US banks bail

In the summer of 2023, it was clear that regulators across the globe were after Binance. The SEC accused the exchange of commingling customer funds and using them to buy an $11 million yacht. US banks severed ties with Binance.

By August, the crypto exchange was no longer welcome in the Netherlands or Germany.

June 5: Reuters finds evidence that Binance could improperly access Binance US bank accounts. That same day, the SEC files its initial complaint against Binance. Charges include the misrepresentation of its level of control over its US arm.

June 7: The SEC accuses Binance of spending customer funds on luxury items like an $11 million yacht. Commissioners say it commingled customer funds with corporate finances.

June 8: Binance alleges that SEC chairman Gary Gensler volunteered to be an advisor and should be recused from the SEC’s lawsuit against Binance. A day later, it suspends US dollar deposits and withdrawals after losing access to US banks.

June 16: Binance’s EU headquarters in Paris is raided by French police. Authorities said that the firm engaged in aggravated money laundering and offered “illegal” digital asset services to local users.

Read more: SEC claims Binance spent commingled funds on $11M yacht

June 19: A report by Protos reveals that European nations are assisting the SEC’s investigation into Binance.

June 28: Nomo Bank suspends customer payments to the exchange.

July 5: The Australian Securities and Investment Commission searches Binance Australia’s offices for evidence of harm to investors.

July 18: Polymarket, a crypto predictions platform, gives Binance a 12% chance of becoming insolvent by the end of the year. That same day, it was reported that Binance’s money processor Advcash is accused of being a Russian money laundering operation.

July 20: Binance officially tells Dutch users to withdraw their assets but redirects them to an affiliated broker named Coinmerce.

July 26: Binance abandons efforts to obtain a license in Germany after being told that a digital asset custody license would not be granted.

Russian execs and Binance US chief jump ship

August 4: During a Coinbase earnings call, Brian Armstrong says Binance dumped its USDC holdings.

August 15: Binance requests a protective court order shielding BAM Trading executives from the SEC’s information requests, accusing the SEC of being on a “fishing expedition.”

August 18: Checkout.com ends its relationship with Binance, citing regulatory concerns.

August 21: Binance appears to suspend euro deposits and withdrawals through SEPA. The termination of its relationship with payment processor Checkout.com might have been a factor. However, it quickly deleted an X post about that suspension.

September 6: Binance’s Russian executives leave the company. The following week, Binance US CEO Brian Shroder leaves.

September 18: Binance US is caught using Ceffu, a wallet developed by Binance, to hold user funds. Binance denies having control over funds belonging to Binance US customers.

Read more: Another Binance executive jumps ship amid regulatory woes

Binance deals with Hamas ties and penalty payouts

November 2023 brought Binance more headlines than any other month in its history. Binance US suspended USD deposits and withdrawals; Binance was ordered to pay $13 million for dodging Australia’s legal hoops.

A string of accusations that Binance heavily facilitated Hamas were followed by the monumental news that CZ and his exchange had pled guilty to criminal charges. The $4.3 billion settlement ended investigations by the DoJ, CFTC, and two bureaus of the US Treasury — but CZ was forced to resign as CEO.

September 27: Binance sells its Russian division to CommEX.

October 5: A Forbes investigation indicates that Binance’s BNB ICO might have raised less than $5 million – approximately one-third of the official figure.

October 11: Binance begins rolling out self-trading prevention.

October 16: ChainArgos alleges that Hamas used Binance-controlled Tron addresses to receive 93.7 million USDT from a scam. Israel Defense Forces sanctioned those addresses.

Read more: Palestinian jihadists received USDT via Binance, says Israel

October 17: Binance US suspends US dollar withdrawals. It recommends stablecoin withdrawals as a work-around.

November 7: The SEC rebuffs Binance’s motion to dismiss its securities lawsuit, dismissing Binance’s “creative” interpretation of the US Supreme Court’s Howey Test.

November 9: Australia’s Securities and Investments Commission orders Binance to pay $13.1 million to users of Binance Australia Derivatives. That Securities and Investments Commission alleged that Binance misclassified users as wholesale instead of retail in order to dodge legal requirements.

The same day, it was reported that Binance moved 3.9 billion USDT-on-TRON from a cold wallet labeled “Binance-Cold 2” to a hot wallet called “Binance 3.” ChainArgos flagged the transaction.

Guilty pleas and orders for CZ to resign

November 15: Majority Whip Tom Emmer, Committee on Financial Services chairman Patrick McHenry, and 55 other members of the House of Representives sign a letter to President Biden and Treasury Secretary Janet Yellen. The letter lists Binance as a source of Hamas financing.

November 17: Binance begins delaying processing withdrawals in euros and USDT. The problem implies another issue with a third-party financial partner. Outages last at least a week.

November 21: CZ and Binance settle charges brought by the US Department of Justice and the CFTC. Binance will pay at least $4.3 billion in fines. CZ agrees to step down as Binance’s CEO and plead guilty to charges. A separate SEC lawsuit remains unresolved.

On the same day, Richard Teng replaces CZ as Binance’s CEO.

Read more: Who is Richard Teng, Binance’s new CEO?

November 27: A judge denies CZ’s request to leave the US prior to his sentencing. Citing his substantial net worth and ties to non-extraditing countries, a Seattle judge ruled that he must stay within the continental 48 states until his sentencing — approximately three months away.

November 28: CZ resigns as chairman of Binance US’s board of directors and transfers his voting rights.

December 19: A hacker reveals a $10,000 law enforcement request received by Binance.

A bright 2024 ahead: SEC suit, US gov’t monitor

CZ faces a US criminal trial in March 2024. Until then, he’s forced to reside in the country while his family are in Dubai. A judge ruled that a lack of an extradition treaty with the emirate, along with an inability for authorities to seize the majority of his funds, meant that he posed a significant flight risk.

Binance must still battle a lawsuit with the SEC, which alleges that BNB is a security, that CZ-controlled entities were responsible for suspect flow of funds between Binance and Binance US, and that these CZ-owned entities engaged in massive wash-trading.

To top it all off, Binance will need to navigate choppy financial waters in 2024. Penalty payments aside, Binance faces serious fees as a result of a plea deal requirement: a US government monitor.

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A US court has ordered crypto exchange Binance and its former chief Changpeng Zhao (CZ) to pay $2.7 billion and $150 million respectively to the Commodity Futures Trading Commission (CFTC).

The CFTC announced on Monday that the US District Court for the Northern District of Illinois approved the historic settlement, which was first reached in November as part of a larger package with the Department of Justice (DoJ), CFTC, and two bureaus of the US Treasury.

By formalizing the settlement, the US court has found that Binance and CZ violated the Commodity Exchange Act (CEA) and CFTC regulations. Binance will disgorge $1.35 billion in “ill-gotten transaction fees” and also pay a $1.35 billion penalty to the CFTC. CZ will personally pay a $150 million civil monetary penalty.

Read more: This one sentence from CZ’s criminal settlement has raised eyebrows

In November, CZ was forced to resign as chief of Binance as part of a plea deal. He pled guilty to breaking US anti-money laundering and sanctions laws.

Binance was found to have withheld over 100,000 suspicious transactions with organizations flagged by the US as terrorist groups, along with transactions with sites selling child pornography and sexual abuse.

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The post Binance ordered to pay $2.7B to CFTC, former chief to pay $150M appeared first on Protos.

On the day that Binance and its founder (CZ) pleaded guilty to federal crimes in Seattle, the crypto industry was stunned. There were endless reasons to be gobsmacked. Why did CZ step foot on US soil at all? How long might he go to prison? How could he and his company afford to pay their multi-billion dollar settlement? Does Binance have distant ties to Jeffrey Epstein?

Astute observers were questioning another, perhaps far more important event that day. In an obstinate post to X (formerly Twitter), CZ issued an incredible declaration, “I am proud to point out that in our resolutions with the U.S. agencies they do not allege that Binance misappropriated any user funds.”

Journalists blinked twice. One word in that sentence might impact CZ’s civil liberties. Were it not for “resolutions” that post would have been a lie on the very day that he thought he had signed a criminal settlement.

It’s not the best idea to mislead the public about a settlement with the US Department of Justice, two bureaus of the US Treasury, and the Commodity Futures Trading Commission (CFTC).

Read more: Changpeng Zhao resigns from Binance US board, transfers voting rights

The reason CZ’s sentence is so problematic is that the one US agency with whom Binance and CZ did not reach a resolution does allege that Binance misappropriated user funds. Indeed, according to the lawsuit filed by the Securities and Exchange Commission (SEC):

“Through accounts owned and controlled by Zhao and Binance, billions of U.S. dollars of customer funds from both Binance Platforms were commingled in an account held by a Zhao-controlled entity (called Merit Peak Limited).”

Needless to say, secretly redirecting Binance customers’ money into a privately owned crypto trading fund owned by CZ, as alleged by the SEC, is… not appropriate.

‘No misappropriation’ post CZ settlement

Binance and CZ have not resolved the SEC’s lawsuit. There is no public record of commissioners even offering a settlement. To be clear, their lawsuit could be worth many billions of dollars, depending on its final outcome.

The SEC alleges that Binance sold BNB and BUSD in illegal securities offerings, operated illegal securities exchanges for years, withheld information about investment risks from thousands of Americans, and illegally charged trading fees for operating its unregistered exchange, broker-dealer, and clearing agency.

If commissioners win their lawsuit and convince a federal judge to force Binance to disgorge all of the profits it obtained from these activities, that worst-case judgment would add billions more atop Binance’s existing, $4.3 billion payable. At worst, that final judgment could bankrupt Binance.

On the other hand, maybe Binance wins its lawsuit with the SEC. It is already the world’s largest crypto exchange and can certainly afford the world’s best defense attorneys. Another well-funded ICO issuer with high-powered attorneys, Ripple, famously won a partial victory in its SEC lawsuit.

CZ denies misappropriation and market manipulation

For his part, former Binance CEO Changpeng Zhao has denied the SEC’s allegations that entities he controlled commingled user funds. He also denies engaging in market manipulation.

Even if Binance wins its SEC lawsuit, it must pay its $4.3 billion settlement to resolve investigations from other government agencies: US Justice Department, US Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Asset Controls (OFAC), and CFTC.

The SEC case is still ongoing. It is specifically looking into whether CZ-controlled market makers called Merit Peak Ltd. and Sigma Chain not only inappropriately held customer funds, but also traded with customers’ money without their owners’ permission.

Read more: Top Binance exec Noah Perlman’s ties to Epstein, Moonstone, and Gemini

Reuters found evidence of the commingling in bank records and company messages. Dirty Bubble Media independently found evidence of the same commingling in addresses belonging to Merit Peak.

In summary, unfortunately for CZ, the exact allegations that he claims do not exist in his “resolutions” do exist in the 136-page complaint filed by the SEC.

CZ bragged, “Funds are SAFU,” in his statement on his resignation from Binance. However, customer funds have not always been as “SAFU” as he would have liked customers to believe.

If the SEC’s allegations are true, customers’ funds were occasionally misappropriated into non-Binance entities.

That also makes one word in CZ’s admission on the day of his criminal guilty plea — “resolutions” — a saving grace. Time will tell whether it can hold the weight of his unresolved obligations.

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Crypto exchange Binance US has announced that Changpeng Zhao (CZ) will resign as chairman of the board and transfer his voting rights — but in its hurry to point out that it’s not under scrutiny by US agencies like the CFTC, Binance US forgot to mention its own SEC enforcement action.

“As CZ transitions to life after Binance, he has decided to step down from his role as Chairman of our Board of Directors and transferred his voting right through a proxy arrangement,” Binance US wrote on X on Tuesday, “whereby his interest in the company is purely economic and he will no longer be involved in our governance.”

According to the announcement, the US-based crypto exchange remains “fully operational” and “well capitalized” after CZ’s decision to sever ties — even claiming the event has provided “renewed clarity and momentum.”

The news comes after CZ and Binance pled guilty to federal crimes and the 46-year-old was required to step down as CEO. Binance US wasn’t the subject of that particular Securities and Exchange Commission’s (SEC) lawsuit — both entities claim to operate independently.

Read more: Binance US still relies on Binance for custody through Ceffu

The exchange was quick to point this out in its announcement post. “Binance US is not a party to the settlements announced last week, nor do we have any outstanding enforcement matters with the DOJ, FinCEN, OFAC, or CFTC,” its post read.

However, Binance US seems to have forgotten that it faces its own SEC enforcement action for offering unregistered securities — in which Binance and CZ are also named. The case is ongoing.

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