In an unprecedented turn of events, Binance co-founder Zhao Changpeng has become the wealthiest individual ever to serve time in a US federal prison. This follows a significant rally of the BNB token, a cryptocurrency intrinsically linked to Binance and Zhao, in the first week of his incarceration.
Zhao, often referred to as “CZ,” reported to a federal prison in California on June 4 to begin a four-month sentence for failing to implement adequate anti-money laundering measures at Binance, the world’s largest cryptocurrency exchange. Despite his imprisonment, Zhao’s financial stature has continued to soar.
The BNB token hit a record high of $717.48 on June 6, pushing its market capitalization to $109 billion, according to CoinGecko. This surge reflects a more than twofold increase in the token’s value since the beginning of the year, further elevating Zhao’s net worth to an estimated $38.5 billion. This figure places him as the 40th richest person globally, with his wealth growing by $4.1 billion in 2024 alone, as reported by the Bloomberg Billionaires Index.
The price rally of BNB coincides with Binance’s recovery and growth. The exchange’s total asset value has increased from $80 billion in January to $125 billion currently, reinforcing its market dominance despite a turbulent 2023, which saw Binance paying a $4.3 billion fine to resolve allegations with US authorities.
BNB token holders benefit from trading-fee discounts on Binance, and the token is also utilized for transaction fees on BNB Smart Chain, a blockchain favored by numerous crypto applications, including games and exchanges. The recent surge in BNB’s value was anticipated by derivative market trends in late May, with spot demand rising significantly in early June. According to Dessislava Aubert, an analyst at Kaiko, buying activity consistently outpaced selling from June 2 to June 5.
“BNB trades on more than a dozen centralized exchanges, which differs from other exchange tokens that are almost exclusively traded on their affiliated platforms,” Aubert noted. However, Binance remains the dominant trading venue, accounting for 85 percent of global BNB volume.
Zhao’s imprisonment follows allegations that Binance had facilitated transactions for entities linked to Hamas, Al-Qaeda, and other militant groups by failing to enforce stringent anti-money laundering controls. As part of the settlement, Zhao agreed to pay a personal fine of $50 million, a fraction of his substantial net worth.
In a 2021 interview, Zhao disclosed that the majority of his wealth is held in BNB, and he is a significant shareholder in Binance. Although he has never publicly revealed the exact amount of BNB he owns, the 2017 white paper for BNB’s initial coin offering indicated that 80 million tokens, now valued at approximately $56 billion, were allocated to the founding team. The funds raised from the ICO were instrumental in launching the Binance exchange.
Despite his current legal challenges, Zhao’s financial ascendancy continues unabated, highlighting the complex interplay between regulatory scrutiny and the explosive growth of digital assets.
