Crypto Kings No More: Binance CEO Changpeng Zhao and Terraform Labs’ Do Kwon
In a remarkably turbulent two-year period, Changpeng Zhao, the CEO of Binance, has emerged as the most influential figure in the cryptocurrency world to face significant challenges. This occurrence is particularly noteworthy given the already unpredictable nature of the industry.
Zhao stepped down as CEO of Binance, the world’s largest cryptocurrency exchange, after he and the company pleaded guilty on Tuesday to broad US money laundering violations and agreed to pay more than $4 billion in fines.
Here are three of the highest-profile crypto leaders who have run afoul of the law since last year:
– Changpeng ‘CZ’ Zhao –
Born in China in 1977, Zhao moved to Canada with his family in the 1980s and later earned a degree in computer science from McGill University, according to his Bloomberg Billionaires Index profile.
He founded Binance in 2017 in Shanghai and led the company’s explosive growth into the world’s largest cryptocurrency exchange.
Zhao became an outspoken celebrity in the crypto world, with 8.7 million followers on X, becoming the richest well-known figure in the nascent industry. His net worth peaked at around $65 billion in 2022, according to the Forbes index.
With prestige and wealth came increased scrutiny of Binance’s operations as well-known crypto companies around the world began to sink under a wave of criminal investigations.
The United States accused Zhao and Binance of several violations, including knowingly allowing transactions for militant groups such as the Islamic State and in prohibited jurisdictions such as North Korea and Iran.
On Tuesday, they pleaded guilty. According to court documents, the company has agreed to pay nearly $4.4 billion in fines, and he will pay $50 million.
Zhao stepped down as CEO of Binance, and while he reportedly retains his shares in the company, he is barred from participating in its business. He is expected to be sentenced at a later date.
Forbes listed his net worth at $10.2 billion on Wednesday.
– Sam Bankman-Fried –
If Zhao was the richest and most influential person in crypto, Sam Bankman-Fried was easily the most famous.
Born to professors at Stanford University, Bankman-Fried graduated from MIT with a degree in physics.
In 2019, he founded FTX, which became the second largest crypto exchange in the world.
Along the way, Bankman-Fried built her image as an unofficial ambassador for the cryptocurrency industry, making high-profile media appearances and even the US Congress.
At some point in 2022, his net worth was $24 billion, according to Forbes.
But he had walked a dangerous path—his team used clients’ money for everything from buying luxury real estate to risky moves by subsidiary Alameda Research.
It all came crashing down when these moves were revealed in the media in November 2022. Within hours, competitor CZ Zhao said Binance would sell all the FTX tokens it held.
It caused the stunning collapse of FTX and the Bankman-Fried empire, and his reputation became famous.
He was arrested in the Bahamas in January and found guilty this month of what US prosecutors described as “one of the largest financial frauds in US history”. He faces up to 110 years in prison.
During the trial, the 31-year-old admitted he had made “mistakes” but denied trying to deceive anyone.
– Do Kwon –
South Korean entrepreneur Do Kwon founded Terraform Labs in 2018 to develop cryptocurrencies TerraUSD and Luna.
The Stanford grad managed to market them as the next big thing in crypto, attracting billions in investment and global hype.
South Korean media described him as a “genius”.
But in May of last year, the value of those currencies — which were marketed as “stable coins” — collapsed, wiping out about $40 billion in investment and sending shockwaves through the rest of the industry.
That led to more than $500 billion in additional losses in global crypto markets, industry data suggested.
Experts said Do Kwon – whose full name is Kwon Do-kyung – had been marketing the vaunted Ponzi scheme.
Brash and outspoken on social media, Do Kwon left South Korea before the collapse and went on the run for months.
He was arrested in Montenegro this year after he was caught trying to board a flight with fake Costa Rican travel documents.
Several criminal charges have been filed against him in the United States and South Korea.
