CZ Walks Free, But Is Binance Really Out of His Hands?

Changpeng Zhao, co-founder and former CEO of Binance, is set to walk out of prison on September 29. Early reports, based on a plea deal with the U.S. Department of Justice (DoJ), suggested that CZ might be sidelined from any key position for three years. However, current CEO Richard Teng has confirmed that once released, the former CEO will be permanently barred from holding any significant roles at the exchange.

Yet, as Zhao seemingly steps out from the prison walls and away from his role at the crypto exchange, one question lingers — can Binance ever truly escape the influence of its digital finance mastermind? Zhao may relinquish the CEO chair, but who’s to say he’s giving up control over whoever’s sitting in it?

Free, but Still Under Control

A plea deal with the U.S. Department of Justice has reshuffled the deck at Binance. Once a one-man show with CZ as the sole board member, the crypto exchange now boasts a seven-member board — thanks to the DoJ’s involvement.

Teng pointed out that the plea agreement leaves a lot of room for interpretation. So, while CZ may be banned for life from holding any official positions, his influence as the largest shareholder is far from over.

Teng explained:

As a shareholder, he’ll closely monitor the company’s performance. And if things don’t go how he expects, he has every right to shake things up — whether appointing a new board or even a new CEO. Shareholders can always put forward a resolution, after all.

Under the plea deal, the DoJ also appointed two external monitors to oversee Binance's seven-member board. These DoJ-backed watchdogs will ensure the exchange toes the line for the next three to five years. 

CZ’s Iron Grip on Binance

Binance, one of the largest crypto exchanges by trading volume, operates globally through a web of subsidiaries that follow local laws and regulations. But when it comes to CZ’s role and influence over the day-to-day operations, things get a bit murkier.

Take, for example, the now-defunct U.S. subsidiary of Binance. On paper, the exchange claimed its U.S. arm was fully independent, with CZ having no say in its operations. 

Well, not quite. As regulators began closing in, it was revealed that CZ was actually the majority shareholder of the U.S. subsidiary. So, despite the polished paperwork suggesting otherwise, CZ was very much in the driver’s seat, running the company's operations.

Shadow Leader

The plea deal, stated that Changpeng Zhao is prohibited from "any current or future involvement in the management or operations" of Binance. But let’s be honest — does anyone really believe CZ is stepping away from managing Binance? Sure, on paper, he might not have the title, but he clearly still holds sway over the current CEO, Richard Teng, who, let’s not forget, was handpicked by CZ himself. 

Over on X, the running joke is that CZ won’t be managing Binance, but he’ll definitely be managing Teng.

CZ, for his part, doesn’t seem too upset about this arrangement. He’s more than happy to take on the role of the “power behind the throne.”

He’s made it clear that he has no intention of returning as CEO. In fact, back in the spring, CZ stated he’d rather focus on education and remain a passive investor.

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