On November 22, Mr. Changpeng Zhao (CZ) announced that he was leaving Binance and pleading guilty to violating anti-money laundering laws, and paying a fine of 4.3 billion USD under an agreement with the US government so that the cryptocurrency exchange could continue to operate.
CZ is not the only one in the sights of regulators, however. As token prices plummeted last year, the cryptocurrency market experienced a stunning meltdown that left industry leaders in a difficult position. Being investigated and accused does not mean they have done anything wrong or will be convicted, as the men have denied the charges brought by the US.
Changpeng 'CZ' Zhao
CZ was born and raised in China and moved to Canada at the age of 12. He founded Binance in Shanghai, China, in 2017 but later moved the exchange to Tokyo and then Malta, with Binance's parent company based in the Cayman Islands. Corporate filings show that the billionaire owns real estate in Singapore and the Burj Khalifa in Dubai, but he rarely flaunts his wealth.
In addition to the settlement with the U.S. Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), and the U.S. Treasury Department, the platform has faced other challenges. In June, the U.S. Securities and Exchange Commission (SEC) sued Binance and CZ for operating a fraudulent website. The SEC accused Binance of faking trading volumes, diverting customer funds, failing to restrict U.S. customers from using the platform, and misleading investors about market oversight controls.
Binance said the SEC’s lawsuit is not justified based on the facts, the law, or the commission’s own precedent.
Sam Bankman-Fried
In November, a jury in New York (USA) convicted former CEO of FTX Bankman-Fried of defrauding customers and investors of at least $10 billion.
Bankman-Fried said he made mistakes running FTX but did not defraud customers. This is a criminal case that has shocked the cryptocurrency industry. Before his conviction, Bankman-Fried was a well-known figure in the cryptocurrency world. The exchange he founded, FTX, was considered the second-largest cryptocurrency exchange in the world.
Before FTX collapsed, Bankman-Fried had a fortune worth $26 billion.
Do Kwon
Do Kwon co-founded Terraform Labs and developed the TerraUSD and Luna cryptocurrencies. The market value of TerraUSD and Luna was once estimated at over $40 billion and their collapse left millions of investors bankrupt.
Kwon faces multiple fraud charges in the U.S. and was arrested in Montenegro in early 2023 on charges of document forgery, authorities said. The SEC also filed civil charges against Kwon and Terraform Labs, accusing the two of orchestrating a multibillion-dollar cryptocurrency scam.
According to a press release from the Montenegrin court, Kwon denied falsifying documents. In a court filing on October 30, Terraform said the SEC had not provided evidence to prove that Do Kwon and Terraform had committed fraud.
Alex Mashinsky
In July 2022, Alex Mashinsky, founder and former CEO of cryptocurrency company Celsius Network, filed for bankruptcy. The New York (US) judiciary sued Mashinsky for fraud in January. Mashinsky's lawyer said the former CEO refused to plead guilty and wanted to defend himself in court.
Mashinsky also faces lawsuits from the SEC, CFTC, and the Federal Trade Commission (FTC), alleging that he misrepresented the company's true condition.
Barry Silbert
Silbert is the head of the Digital Currency Group (DCG), the company that owns Genesis, which filed for bankruptcy in January 2023. Silbert is accused of defrauding customers of more than $1 billion, along with Genesis and DCG. Silbert says the allegations are baseless and will fight the lawsuit in court.
Stephen Ehrlich
Stephen Ehrlich's cryptocurrency company Voyager Digital was heavily impacted by the 2022 cryptocurrency crisis. Faced with accusations of defrauding customers by the CFTC and FTC, Mr. Ehrlich said he was used as a "scapegoat" for the bad actions of other companies.
Justin Sun
In March, the SEC sued Chinese cryptocurrency entrepreneur Justin Sun and his companies, including the Tron Foundation, for fraud. The SEC said Justin Sun faked trading volumes for his company’s cryptocurrency tokens and hid payments to celebrities to promote them. Sun said in a post on the X platform that the SEC’s complaint was without merit.
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