He enjoyed a home-cooked dinner with a former U.S. senator in Montana. He visited Telluride, Colorado, and Moab, Utah, a vacation destination known for its national parks. And he talked startups with Sam Altman, CEO of OpenAI.
After pleading guilty to money laundering offenses in November, Qiao Changpeng, the founder of cryptocurrency exchange Binance, has not remained silent. A federal judge denied his request to return to Dubai, but Mr. Zhao, 47, was free to roam the United States. So he spent the past five months traveling the country and networking with others. entrepreneur And lay the foundation for your next move.
Mr. Zhao, once the most powerful figure in the global cryptocurrency industry, resigned as Binance's chief executive when he pleaded guilty and agreed to pay a $50 million fine. He is scheduled to be sentenced in federal court in Seattle on Tuesday, with prosecutors seeking a three-year prison sentence and the defense seeking a suspended sentence and a prison sentence.
But Mr. Zhao, who goes by his initials CZ, is already looking to the future. According to Forbes, he has a fortune of $33 billion. announced Last month, it announced the launch of a new web platform to promote online education.
Mr. Zhao has also expressed interest in investing in artificial intelligence and biotechnology, and is corresponding with other executives. Mr. Altman and Mr. Altman exchanged text messages late last year to discuss the challenges of scaling a startup globally, two people familiar with the matter said.
A number of powerful crypto executives have faced federal lawsuits and criminal charges since the collapse of the multi-trillion dollar industry in 2022. Some went to prison, while others enjoyed a life of luxury until their arrest. Mr. Zhao's fate is likely to be kinder than others.
His frenetic activity since November stands in contrast to the consequences faced by Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX. Bankman Freed, once Mr. Zhao's biggest rival, was nearly ousted after FTX collapsed in 2022 and prosecutors charged him with stealing $8 billion in customer funds. A jury found him guilty of fraud last year and he was sentenced to 25 years in prison in March.
Although Zhao pleaded guilty three weeks after Bankman Fried was found guilty, he still enjoys wide support in the cryptocurrency industry. Dozens of current and former Binance employees have submitted a letter to Judge Richard A. Jones, the federal judge overseeing Chao's case, asking him to impose a lenient sentence. And many crypto entrepreneurs, investors, and senior officials continue to support Mr. Zhao, court records revealed.
John Reed Stark, a former Securities and Exchange Commission official and critic of the cryptocurrency industry, said a short prison sentence is “a small price to pay to become a lifelong millionaire.” “The industry is completely oblivious to the extraordinary crypto crime wave brought on by people like CZ.”
Representatives for Zhao and OpenAI declined to comment.
Throughout Binance's existence, Zhao has been dogged by accusations that he broke laws to build his crypto empire. Binance was the world's largest cryptocurrency exchange, processing two-thirds of all transactions. Chao has since become a cryptocurrency celebrity, with nearly 9 million followers on X. His posts helped set off a chain of events that would lead to the demise of FTX in 2022.
Last year, Binance faced its own liquidation. The company agreed to pay $4.3 billion to the U.S. government for allowing criminal activity to flourish on its exchanges.
U.S. officials said Binance violated economic sanctions by allowing people from countries including Cuba, Syria and Iran to access its platform. Prosecutors said Mr. Zhao failed to maintain proper anti-money laundering controls and allowed customers to register for accounts without providing basic personal information typically required by financial services companies.
“Mr. Zhao violated U.S. law on an unprecedented scale,” prosecutors wrote in a court filing Wednesday. “Mr. Zhao's sentence should reflect the seriousness of his crimes.”
The moment the indictment was announced, Mr. Zhao began talking about his next act.in post Appearing in federal court in Seattle on November X, the defendant stated that he was interested in investing in areas such as cryptocurrency, biotechnology, and AI
“I may be open to being a coach/mentor to a few future entrepreneurs,” he wrote. “At least you can tell them what not to do.”
Prosecutors said in a filing last week that Mr. Zhao traveled throughout the United States, visiting New York, Los Angeles, Telluride and Moab. Mr. Zhao grew up in Canada and has spent some of his free time skiing and snowboarding, according to people familiar with him.
Mr. Zhao met Mr. Altman in person about a year ago, according to a person familiar with the matter. According to two people familiar with the exchange, the two men had been in touch again after a battle for leadership at Open AI in late November. The next month, over hotpot in Los Angeles, Mr. Chao told Columbia University computer science professor Longhui Gu that he had contacted Mr. Altman.
“He's been talking to Sam, and we both believe that AI will go a long way in enabling technology advancement and human knowledge,” Gu, who founded the startup that Binance helped fund, said in an interview. ” he said.
At the same meal, Gu said, Zhao said he was “looking for opportunities” to invest in large-scale data centers to power AI applications.
(The New York Times sued OpenAI and its partner Microsoft, alleging copyright infringement of news content related to the AI system.)
In a letter filed in court last week, Zhao said he had also spoken to “a number of biotech start-ups” in recent months and intended to focus on disease prevention in the next chapter of his life.
“We want to use blockchain technology to not only provide access to healthcare to billions of people around the world, but also to fund small research institutes that aim to cure diseases once and for all.” he wrote.
In March, Mr. Zhao announced At X, we reported that we are launching a project called Giggle Academy, a free online learning platform for children. A seven-page “concept paper” posted on Giggle Academy's website says the platform will include AI and automation, as well as non-fungible tokens and unique digital collectibles known as NFTs. ing.
Chao wrote to X that Giggle Academy would have “no income” and was looking for a small team to work directly with it.
During his travels, Mr. Zhao also met with influential acquaintances. A few months ago, he had dinner at the Montana home of Max Baucus, a former U.S. senator and ambassador to China. Baucus, who worked as an advisor at Binance, said in a letter filed in court last week that he had discussed the criminal case with Chao.
“He made no excuses other than saying he wasn't hurting anyone,” Baucus, a Democrat, wrote. “He did not use other people's funds in his own accounts, distinguishing him from Sam Bankman Freed, who did just that.”
At the December dinner with Gu, Zhao's son, a freshman at Pepperdine University, was also present. In a letter to the court last week, Gu wrote that the dinner party was mostly casual. He and Chao discussed their shared interest in cryptocurrencies and “insights on how to be a great CEO.”
So Mr. Zhao's son asked his father if he was really guilty. “The sudden silence that followed was palpable,” Gu wrote. “He acknowledged his mistakes and guilt and emphasized that there is no shame in making mistakes.”
The letter said Mr. Zhao quickly lightened the mood and joked about Mr. Gu's “willingness to continue to eat together.”
kitty bennett contributed to research.
