Informed Crypto News
Binance founder CZ made over $25 million per day while in prison, report
Headline, "Binance founder CZ made over $25 million per day while in prison." Report published at 12.52 p.m. October 1, 2024 on Protos.com. Former Binance Chief Chungpeng Zhao's four-month prison stay might have actually been a pretty lucrative career move. Indeed, from the moment he entered a California prison earlier this summer to his release last week, the Binance founder might well have made more money than most executives could hope to earn in their lifetime. Although his wealth is mostly derived from equity in privately held companies, Forbes' calculations of CZ's net worth indicate that he could have made billions of dollars personally while serving his prison sentence. In fact, according to one such estimate, he may have made $25 million for every day he was in prison. However, it's important to note that another news agency with a more conservative methodology, Bloomberg, estimates that CZ actually lost money while in prison, detailed commentary for these estimates appears below. Subheading, "Determining the dates of CZ's prison term." In November, 2023, CZ pled guilty to willful violations of the Bank Secrecy Act that enabled money laundering through Binance.com. As a result, he agreed to resign as CEO, pay a $50 million fine, and never again publicly dispute the statement of facts from the U.S. government's lawsuit against Binance. The judge subsequently recommended the Seattle area prison CTAC. However, for nearly five weeks, post-sentencing due process and legal formalities delayed CZ's prison entry. Ultimately, the Bureau of Prisons admitted him to Lompoc II, a minimum security prison near Santa Barbara, on June 2, 2024. Once in the custody of the Bureau of Prisons, the probation department scheduled his release for September 29. However, due to his release date landing on a weekend, he officially exited his Long Beach halfway house two days early. He tweeted a standard crypto greeting on the day of his release. In summary, CZ was in prison 117 days from June 2 to September 27, 2024. Because he paid his $50 million personal fine before he entered prison, his fine is not a factor in determining his net worth change from entry to exit. Subheading CZ's 117-day change in net worth. Now, with the exact dates known, the next challenge is to calculate CZ's net worth change. Although CZ has disclosed holdings of crypto assets, BTC, and BNB, most of his net worth is in the form of equity and finance-affiliated companies. Sadly, because these companies are privately held and CZ has no obligation to publicly report his assets, this opacity makes it extraordinarily difficult to accurately calculate his net worth. In truth, only CZ knows his own net worth. Nevertheless, two news companies have attempted to estimate CZ's personal wealth, Bloomberg and Forbes. Sadly, Forbes does not disclose its methodology. Bloomberg, to its credit, rates its confidence at the lowest level possible, one out of five. It values CZ's holdings of BTC, BNB, and Binance.us at $0, and also discounts the value of his Binance.com equity by 50% from the average EV to sales multiple of three peers. Coinbase Global Inc., Galaxy Digital Holdings LTD, and Riot Platform's Inc. On June 2nd, Bloomberg estimated CZ's net worth at $36.5 billion. However, on September 27th, it estimated it at $30.8 billion. Bloomberg analysts, therefore, believe that CZ lost money during his prison term. Consider Forbes' inverted estimate, however. Subheading Forbes totally disagrees with Bloomberg. On September 27th, Forbes estimated CZ's net worth at $61 billion, nearly double Bloomberg's estimate from the same date. This likely reflects Forbes' non-zero estimates of CZ's crypto assets and a more modest discount on his equity in Binance.us and Binance.com. Unfortunately, Archive.org's Wayback Machine did not archive Forbes' estimate on CZ's prison entry date of June 2nd. On the next earliest available snapshot from May 7th, the outlet estimated his wealth at $33 billion. On Archive.org's next snapshot from July 12th, this had rocketed to an estimated $57.8 billion. Even assuming the higher of those two numbers for CZ's June 2nd prison entry, Forbes estimates that his net worth rose by at least $3 billion by the time he walked free. At a minimum, it is probably safe to assume that Forbes estimated CZ to have gained at least $3 billion, below $58 billion to $61 billion during his prison term. If true, that would mean that CZ gained $25 million per day in personal net worth for every day he served in prison. This recording was AI generated. Get more crypto news at protos.com.