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About two years ago, Changpeng Zhao and Sam Bankman-Fried were running their own company. business empires. While the first one was at the top of Binance, the world’s
About two years ago, Changpeng Zhao and Sam Bankman-Fried were running their own company. business empires. While the first one was at the top of Binance, the world’s largest cryptocurrency exchange in terms of volume, the second one determined the course of FTX, which ranked fifth in the said ranking.
But things have changed in recent months. Zhao and Bankman-Fried lost management of companies they had seen growing. Both have been tried and convicted, so their fate will be imprisonment for a certain period of time. And here’s an interesting point: one will take it worse than the other.
On April 30, Zhao was sentenced to four months in a federal prison in the United States; four years Prosecutors had a request. The sentence given to the businessman, who was born in China and became a Canadian citizen, was light due to the nature of the case.
US authorities investigated Binance and its founder for years. After this period, various accusations were made against the platform and its founder. Zhao appeared in court, admitted his guilt, and reached a settlement that included his resignation and sanctions.
Zhao resigns as Binance CEO and pays 50 million dollars as a fine. The platform, for its part, committed to bringing in independent moderators and also agreed to pay a fine of $4.3 billion.
The businessman was found guilty of a single charge of violating the US anti-money laundering law. It concluded that the platform was used by a wide range of actors, including organizations such as Hamas, to carry out illegal operations, in some cases violating international sanctions.
Despite the significance of the mentions, Zhao was not accused of committing fraud with Binance customers. This last factor, together with the above-mentioned agreement and his cooperation with the authorities, allowed him to continue to exist. he preserved both his legacy Like Binance operations.
The fate of someone once called the ‘King of Cryptocurrencies’ was very different. Problems at FTX began in November 2022, when CoinDesk noticed that Alameda Research, another firm founded by Sam Bankman-Fried, had an unusually large amount of FTT on its balance sheet. Problem? It was a token created by FTX.
So rather than being primarily backed by independent entities, Alameda Research A token created by its sister company. As if that wasn’t enough, FTX had lent billions of dollars to Alameda Research from its customers, funds used for high-risk investments.
Bankman-Fried had done everything possible to hide these movements, but when the data was revealed everything quickly began to fall apart. Zhao, who holds FTT, announced that he would liquidate these tokens, the price of the coin dropped and users began withdrawing large amounts of assets.
Zhao, who was the head of Binance at that time, even announced that he would later purchase FTX. Complete Due DiligenceHowever, this operation ultimately did not yield any results. The platform suspended withdrawals and later filed for Chapter 11 of the US Bankruptcy Code together with Alameda Research.
Bankman-Fried faced various charges from the justice system but was initially released on bail. However, he violated this requirement by, among other things, attempting to manipulate witnesses in the case. After that, he was detained until he began serving his sentence.
In November 2023, the former guru was found guilty of two counts of wire fraud conspiracy, two counts of wire fraud, and one count of wire fraud conspiracy. money launderingone count of conspiracy to commit commodities fraud and one count of conspiracy to commit securities fraud.
A federal court in Manhattan sentenced Bankman-Fried to 25 years in prison and ordered him to pay $11 billion for his responsibility in a massive and complex fraud scheme. Months ago, Bankman-Fried lost 94% of his fortune in just one day. He is not currently included in the Bloomberg Billionaires Index.
Pictures | Binance | FTX | Maxim Hopman
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Source: Xataka
Jason Root is a blockchain enthusiast and author at Div Bracket. He provides comprehensive coverage of the latest developments in the world of blockchain, offering readers a unique perspective on the industry and its potential for revolutionizing various industries.
