CZ Zhao: Binance's $4.3 Billion Fine

On 21 November 2023 Changpeng Zhao, known everywhere as CZ, stood in a federal courtroom in Seattle and pleaded guilty to a crime. The founder of Binance, the biggest cryptocurrency exchange in the world, admitted failing to run an effective anti-money laundering programme. The same day he stepped down as chief executive, and Binance itself pleaded guilty and agreed to pay $4.3 billion, one of the largest corporate penalties in US history.

An exchange in crypto works like a stockbroker: customers deposit money and buy and sell digital coins. Brokers and banks in the US must check who their customers are and report suspicious payments. Binance, the US government said, had chosen not to, because checks would have cost it customers.

Less than two years later, President Donald Trump pardoned him. Zhao served four months. He kept his fortune and his stake in Binance.

What Binance admitted

The case was brought by the Department of Justice (DOJ), the Treasury and the Commodity Futures Trading Commission (CFTC), the regulator for futures markets. Binance admitted three crimes: failing to keep an anti-money laundering programme, running an unlicensed money transmitting business, and breaking US sanctions law.

The details in the DOJ's case were stark. Prosecutors said Binance did not report more than 100,000 suspicious transactions, including ones linked to the Al-Qassam Brigades (the armed wing of Hamas), Palestinian Islamic Jihad, al-Qaeda and the Islamic State. They said it processed more than 1.1 million trades, worth about $898 million, between customers in the US and customers in Iran, a country under US sanctions.

The $4.3 billion was made up of a criminal fine of about $1.81 billion and forfeiture of about $2.51 billion, with separate settlements with the Treasury's FinCEN and sanctions office (OFAC) and with the CFTC. Binance also accepted an independent monitor, an outside compliance overseer with access to its books, for three years. Zhao agreed to a $50 million fine and was barred from running the company. Richard Teng, a former Abu Dhabi financial regulator, replaced him as chief executive.

Four months in Lompoc

Prosecutors asked for three years in prison, twice the top of the sentencing guidelines, arguing that a message had to be sent. On 30 April 2024 US District Judge Richard Jones gave Zhao four months, noting that he had pleaded guilty, apologised and had no criminal record. Zhao told the court he was sorry.

He served the sentence at a low-security prison in Lompoc, California, and was released on 27 September 2024. He was widely described as the richest person ever to serve time in a US federal prison.

The pardon

Zhao did not go quiet. In April 2025 Pakistan named him a strategic adviser to its new Crypto Council, and in May 2025 he became an adviser on digital assets to Kyrgyzstan's president, Sadyr Japarov. He also ran YZi Labs, the investment arm that grew out of Binance Labs, and Giggle Academy, a free online school project.

Binance's ties to the Trump family grew at the same time. In 2025 MGX, an investment company from Abu Dhabi, bought a $2 billion stake in Binance and paid using USD1, a stablecoin issued by World Liberty Financial, the crypto company launched by Trump's sons. A stablecoin is a digital token meant to stay worth exactly one dollar, like a casino chip that can be cashed at face value. Binance also hired lobbyists to seek clemency: Politico reported that one firm, Checkmate Government Relations, was paid $450,000 for a month's work on "executive relief", and Zhao's lawyer Teresa Goody Guillén, who also represented World Liberty Financial, led the effort.

On 23 October 2025 the White House announced that Trump had pardoned Zhao. Press secretary Karoline Leavitt said he had been prosecuted by "the Biden Administration in their war on cryptocurrency". World Liberty Financial said it did not discuss or influence the pardon. Senator Elizabeth Warren said Zhao had boosted a Trump crypto venture and lobbied for a pardon, and with Senators Adam Schiff and Jeff Merkley pushed a resolution condemning it, which went nowhere. Asked about the pardon on CBS's 60 Minutes in November 2025, Trump said he did not know who Zhao was and had been told the case was a Biden "witch hunt".

Where things stand in October 2026

A pardon wipes out the conviction and its penalties for Zhao personally. It did not undo Binance's corporate plea or its monitor. In September 2025 Bloomberg reported that Binance was in talks with the DOJ to end the monitorship early. No ending had been confirmed by October 2026.

Instead, new questions arrived. In February 2026 Fortune reported that Binance compliance investigators had found more than $1 billion flowing through the exchange to entities tied to Iran between March 2024 and August 2025, and that at least five of them were later fired. Binance denied breaking sanctions and said the staff were not dismissed for their findings. The Wall Street Journal reported that the DOJ was looking into the matter; Binance said it was not aware of any investigation and sued the newspaper for defamation. In April 2026 Senator Richard Blumenthal wrote to the acting Attorney General asking whether the DOJ had discussed ending the monitor early, and in May 2026 Binance said the Treasury had sent it a letter asking for records and staff interviews.

Zhao faces fresh lawsuits too. The FTX bankruptcy estate is suing Binance and Zhao for about $1.76 billion, money FTX says was improperly paid out when Sam Bankman-Fried bought back Binance's stake in FTX in 2021. In June 2026 nearly 1,700 UK investors sued Binance and Zhao in London's High Court, alleging Binance sold them complex derivatives (bets on future prices) without the authorisation UK law requires; their lawyers later said the group had grown to about 2,700. Binance says it will defend both.

Zhao has said in interviews that he does not plan to return to running Binance, though he remains its largest shareholder. In April 2026 he published a memoir, Freedom of Money. Forbes put his fortune at about $111 billion that month; Zhao told the New York Times in October 2026 that the true figure is between $10 billion and $30 billion.