Former Binance CEO Changpeng Zhao (CZ) has been transferred from FCI Lompoc II prison in California to a halfway house at RRM Long Beach, but contrary to speculation on social media, he has not been released. The move is part of the U.S. Bureau of Prisons’ process to transition inmates nearing the end of their sentences into residential reentry management (RRM) facilities. He has been sentenced to 4 months prison time after his guilty plea.
RRM Long Beach is not a traditional prison but a facility designed to help inmates reintegrate into society before their full release. While CZ is technically no longer in prison, he remains under strict supervision and must adhere to the rules of the halfway house. The facility operates on voluntary compliance, but CZ is still serving his sentence and is not free.
Background: CZ pleaded guilty to money laundering charges and was sentenced to four months in prison on April 30, 2024. This sentence came after a November 2023 settlement with U.S. authorities, in which CZ admitted to violating anti-money laundering laws and agreed to step down as CEO of Binance. The U.S. government imposed a hefty penalty of $4.3 billion on Binance, while Zhao personally agreed to pay a $50 million fine. Prosecutors had sought a three-year sentence, citing the extensive nature of Zhao’s misconduct, but the judge opted for a shorter term, acknowledging Zhao’s cooperation and lack of prior offenses. As part of the settlement, Zhao waived his right to appeal any sentence up to 18 months, and Binance will operate under the supervision of a government monitor for compliance oversight
The confusion surrounding CZ‘s status stems from misinformation on social media platforms like X (formerly Twitter), where users incorrectly assumed his move to the halfway house signified an early release. In reality, CZ‘s sentence is set to conclude on September 29, 2024, not August 30 as previously speculated. The earlier date was tied to his sentencing on April 30, but his imprisonment began in late May, extending his time in custody.
As CZ approaches the end of his sentence, he faces additional legal challenges. A class action complaint filed on August 16 accuses CZ and Binance of enabling the laundering of stolen funds due to inadequate anti-money laundering (AML) and know-your-customer (KYC) protocols. The plaintiffs, three crypto traders, allege that Binance’s lax regulatory practices led to the loss of their funds.
With his sentence nearing completion, CZ‘s legal battles are far from over, raising further concerns about Binance’s regulatory compliance and operational integrity.
