In 2021, nearly everyone predicted Sam Bankman-Fried’s FTX would defeat Changpeng Zhao’s Binance as the two companies battled for crypto dominance. Today, it is Zhao—known to everyone in crypto as CZ—who has emerged utterly victorious, while his onetime rival is despised and disgraced beyond redemption. The Binance founder has come out of on top in every way, even as he prepares to join Bankman-Fried in prison this week.
On Tuesday, a federal judge in Seattle sentenced the 47-year-old Zhao to four months in custody for turning a blind eye to money laundering at Binance. While this is much lower than the three years prosecutors had sought, the sentence would still would be a sad end of the line for most corporate executives. But as this excellent New York Times profile notes, Zhao will be entering prison as the richest inmate in the country and can expect to do his time in a relatively cushy low security setting where he’s unlikely to face violence and extortion. Bankman-Fried, meanwhile, is settling in for a 25-year term and has been roughing it with the gangbangers at Brooklyn’s notorious Metropolitan Detention Center.
While awaiting his sentence, Zhao has been skiing in the Rockies and cultivating friendships with rich and powerful people like Sam Altman and former Sen. Max Baucus, who wrote a letter to the judge urging leniency. Zhao, whose ambitions were fueled by his brilliant but aloof father, has also been mending relations with his oldest son, who is at Pepperdine, and working with his friends and onetime romantic partner to set up Binance for long-term success. He’s also founded a philanthropic online primary school and dabbled in AI and biotech startups.
All of this will let Zhao begin his postprison life with a running start. His detractors view this recent activity, as well as the stack of glowing character references he supplied to the judge, as a cynical ploy by a criminal. But whatever his motives, Zhao has played his hand perfectly when it comes to negotiating his legal troubles. After holding off the U.S. Justice Department for years, he finally struck a plea deal and has since done all the right things. That includes owning up to Binance’s many slippery (or downright shady) actions, expressing remorse, and doing his best to come across as just another corporate executive who made a few bad choices.
It also helps that Binance is an ongoing concern and that neither the company nor its founder looted their customers’ money. Contrast this with FTX and Bankman-Fried: When the bottom fell out of his company as a result of his own massive fraud, the FTX founder—and son of Stanford law professors—tried to blame the whole mess on other people. And rather than throw himself on the mercy of the court, Bankman-Fried embarked on a cockamamie defense trial highlighted by his disastrous decision to testify. He’s lucky he only got 25 years after all that.
The bottom line is that Zhao not only played the crypto game far better than his rival—he played the criminal defense game much better, too.
This post was updated at 3pm ET to add Zhao’s prison sentence.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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