<-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa43d0000","_type":"00000160-6f41-dae1-adf0-6ff519590003"}">Changpeng “C-Zsp” -person> has become the latest in a long line of crypto founders to face potentially significant legal consequences.
The founder of <-bsp-bb-link state="{"bbHref":"bbg://securities/1624796D%20CH%20Equity","_id":"0000018b-f71b-de26-a7ef-ff3fa4420000","_type ":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">Binance Holdings Ltd.-bsp-bb-link>, the world’s largest crypto exchange, has stepped down as CEO as part of <-bsp-bb-link state="{"bbDocId":"S4HQUFDWX2PS","_id":"0000018b-f71b-de26-a7ef-ff3fa4420001","_type":"0000016b-944a-dc2b-ab6b-cc">057ba settlement agreement”-057ba} bsp-bb-link> with US prosecutors that includes the possibility of prison terms. It makes him the latest member of a club that <-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa4420002","_type":"00000160-6f41-dae1-adf0-6ff5195900 insluit "}">Sam Bankman-Fried-bsp-person> of FTX, <-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa4420003","_type":"00000160-6f41- dae1-adf0-6ff519590003"}">Alex Mashinsky-bsp-person> of Celsius, and <-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa4420004","_type":" 00000160-6f41-dae1-adf0-6ff519590003"}">Do Kwon-bsp person> from <-bsp-bb-link state="{"bbHref":"bbg://securities/1741983D%20SP%20Equity", "_id":"0000018b-f71b-de26-a7ef-ff3fa4420005","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">Terraform Labs-bsp-bb-Link>.
Zhao, who founded Binance in 2017, has developed a reputation as a shrewd operator, a fierce competitor and someone prone to saying things like “<-bsp-bb-link state="{"bbDocId":"RLCJZAT0AFB4","_id ":"0000018b-f71b-de26-a7ef-ff3fa4430000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">I don’t really care much about collecting money-bsp-bb-link>”. <-bsp-bb-link state="{"bbDocId":"S3517RDWRGG0","_id":"0000018b-f71b-de26-a7ef-ff3fa4430001","_type":"0000016b-944a-dc2b-05ba-dc2b-05 "}">a fortune measured in the billions-bsp-bb link>.
Read more: <-bsp-bb-link state="{"bbDocId":"S4HLALDWX2PS","_id":"0000018b-f71b-de26-a7ef-ff3fa4800000","_type":"0000016b-944a-dc2b-944a-dc2b- -d57ba1cc0000"}">Changpeng Zhao, Brawling Titan of Binance, Meets a Sudden Defeat-bsp-bb-link>
Zhao’s resignation and his almost simultaneous replacement by <-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa4810000","_type":"00000160-6f41-daeff1-5019"-60} ">Richard Teng bsp person>, who built his reputation not in crypto but at Singapore’s central bank, is emblematic of the kind of shift in approach being driven by regulators around the world.
The landscape for digital assets appears to be shifting away from the “<-bsp-bb-link state="{"bbDocId":"RAY6BKDWRGGD","_id":"0000018b-f71b-de26-a7ef-ff3fa4830000","_type ":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">wild west-bsp-bb-link>” of crypto populated by risk-loving cowboys looking for <-bsp-bb-link state="{"bbDocId" :"S4HQUFDWX2PS","_id":"0000018b-f71b-de26-a7ef-ff3fa4830001","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}"toestemming in plaas van->forgiveness, what <-bsp-bb-link state="{"bbDocId":"S2AJDZDWRGG0","_id":"0000018b-f71b-de26-a7ef-ff3fa4830002","_type":"0000016b-944a-6b-dc2b" d57ba1cc0000"}">publicly saving with the liquidators-bsp-bb-link> trying to recover assets for their creditors, or using stolen billions to <-bsp-bb-link state="{"bbDocId":"RLG5FGT1UM10", "_id":"0000018b-f71b-de26-a7ef-ff3fa4830003","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">lobby for policy changes-bsp-bb-link>.
The growing ranks of crypto-founders facing civil and criminal penalties around the world suggests that governments are increasingly empowered to crack down on bad behavior by digital-asset influencers.
The Inefficient Altruist, Sam Bankman-Fried
Sam Bankman-Fried, the disgraced founder of now-bankrupt crypto firms FTX and Alameda Research widely known as SBF, has been convicted of seven counts of fraud and conspiracy and faces decades in prison.
Bankman-Fried directed the transfer of FTX client money to Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies collapsed into bankruptcy last year.
Read: <-bsp-bb-link state="{"bbDocId":"RLG5FGT1UM10","_id":"0000018b-f71b-de26-a7ef-ff3fa4840000","_type":"0000016b-944a-dc2b-ab6b-ab6 d57ba1cc0000"}">FTX’s Crypto Kids Got Perilously Close to Future-bsp-bb-link>
Sam Bankman-Fried leaves court in New York on December 22, 2022.
Photographer: Stephanie Keith/Bloomberg
The King of the LUNAtics, Do Kwon
Before Terraform Labs co-founder Do Kwon was accused by US prosecutors of <-bsp-bb-link state="{"bbDocId":"RS070AT0AFB4","_id":"0000018b-f71b-de26-a7ef-ff3fa4c00000"," _type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">with a years-long fraud bsp-bb-link> that wiped out at least $40 billion in market value, he has a particularly infuriating niche in the digital asset industry.
The collapse of its algorithmic stablecoin project TerraUSD and its related token Luna acted as a major trigger for the crypto winter that began in 2022.
Do Kwon arrives at the court in Podgorica on May 11.
Photographer: Savo Prevelic/AFP/Getty Images
Kwon was jailed in Montenegro on allegations of attempting to travel with a forged passport, and was considered <-bsp-bb-link state="{"bbDocId":"RWYBJST0AFB4","_id":"0000018b-f71b-de26- a7ef-ff3fa5010000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">a fugitive-bsp-bb-link> from fraud charges in his native South Korea. Kwon denied wrongdoing.
The Master Marketer, Alex Mashinsky
<-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa5050000","_type":"00000160-6f41-dae1-adf0-6ff519590003"}">Alex Mashinsky-b , the former CEO of cryptocurrency lender Celsius Network, was arrested in New York in July <-bsp-bb-link state="{"bbDocId":"RXR1GOT0G1KW","_id":"0000018b-f71b-de26-a7ef- ff3fa5050001","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">on charges of committing wire fraud and other crimes-bsp-bb-link>. Mashinsky is accused of running a multi-year scheme to defraud customers before the company he founded filed for bankruptcy with more than $1 billion in debt.
Prosecutors also accused him of <-bsp-bb-link state="{"bbDocId":"RXYAI9DWLU68","_id":"0000018b-f71b-de26-a7ef-ff3fa5060000","_type":"0000016b-24b -ab6b-d57ba1cc0000"}">is pumping up the price bsp bb link> of his firm’s native crypto token, CEL. He pleaded not guilty to the charges and is currently out on bail. His trial is set for September 2024.
Alex Mashinsky
Photographer: Piaras O Midheach/Sportsfile/Getty Images
The Friends Since High School, Su Zhu and Kyle Davies
The founders of Three Arrows Capital <-bsp-bb-link state="{"bbDocId":"RFDO2HDWLU69","_id":"0000018b-f71b-de26-a7ef-ff3fa5420000","_type":"0000016b-944a- dc2b-ab6b-d57ba1cc0000"}">bankrupted their hedge fund bsp-bb-link> with leveraged bets that went south, taking a large chunk of the crypto market down with them. Liquidators seek to <-bsp-bb-link state="{"bbDocId":"RWW6ELDWX2PS","_id":"0000018b-f71b-de26-a7ef-ff3fa5420001","_type":"0000016b-9244-a-d" ab6b-d57ba1cc0000"}">recovered $1.3 billion dollars-bsp-bb-link> from the pair, who listed themselves among the creditors of their collapsed fund.
<-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa5450000","_type":"00000160-6f41-dae1-adf0-6ff519590003"}">Su Zhu-bsp- was <-bsp-bb-link state="{"bbDocId":"S1R37EDWLU68","_id":"0000018b-f71b-de26-a7ef-ff3fa5450001","_type":"0000016b-944a-dc2b-06ba1bc2b-06ba "}">detained in Singapore-bsp-bb-link> while trying to leave the country in September. The exact whereabouts of <-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa5450002","_type":"00000160-6f41-dae1-adf0-6ff519590003"}>Kyle Davies bsp-person>, who is subject to a similar order after months of sparring with the liquidators, is unknown.
To contact the reporter about this story:<-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa5480000","_type":"00000160-6f41-dae1-adf0-6ff519590003"} >Sidhartha Shukla-bsp-person> in Mumbai at [email protected]
To contact the editors responsible for this story:<-bsp-person state="{"_id":"0000018b-f71b-de26-a7ef-ff3fa54a0000","_type":"00000160-6f41-dae1-adf0-6ff51959000 ">stacy-marie ishmael-bsp-person> at [email protected]
Philip Lagerkranser
© 2023 Bloomberg LP All rights reserved. Used with permission.
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