Countdown to Zhao Changpengs Release Can Binance Turn the Tide

That man is back.
Last week, according to the U.S. Bureau of Prisons website, CZ, who has been incarcerated for nearly four months, is set to be released on September 29. The latest news indicates that after 118 days at Lompoc Federal Prison, CZ has left prison and has been transferred to the Residential Reentry Management Office (RRM) in Long Beach, where he remains under supervision.
Following this news, the market is evidently buzzing with excitement, as Binance’s new tokens surged to the top of the charts in anticipation of the return of its spiritual leader, with positive sentiments continuously expressed on platform X.
After all, in the currently relatively subdued market, a boost is indeed needed.
Looking back, in November of last year, Binance reached a resolution with the U.S. Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), the Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN) regarding investigations into Binance’s historical registration, compliance, and sanction issues.
CZ ultimately acknowledged violations of the Bank Secrecy Act, the International Emergency Economic Powers Act, and the Commodity Exchange Act, among others, conducting unlicensed transfer operations, conspiracy charges, and prohibited trading, and paid a staggering fine of $4.368 billion, setting a record for the largest fine ever imposed by FinCEN.
The initial expected sentence was 18 months, but the DOJ later sought to increase it to three years. However, after 161 letters of support and considerations for voluntary guilty pleas, CZ was ultimately sentenced to four months in prison in April this year, officially starting his sentence in June, with an expected release date of September 29.
A four-month sentence is not particularly long, but since November of last year, Rachael Teng has officially become the new CEO of Binance. During this nearly year-long power transition, the opportunities and challenges faced by Binance have been vividly illustrated.
From the perspective of opportunity, CZ’s departure has officially ushered in a major compliance era for exchanges and the cryptocurrency sector, signaling the formal end of the wild west era. Compliance for exchanges has become an inevitable trend, and it was after this that Bitcoin ETFs officially brought institutions into the crypto space. With CZ’s dramatic exit, Binance was able to shed its historical burdens and gain a first-mover advantage in the market under the banner of compliance.
Rachael Teng’s ascent is precisely based on this; a professional manager with a solid political and business background can better lead Binance in the global compliance effort. Likewise, although there are currently no plans to return to the U.S., Binance now holds 19 licenses globally, having recently obtained compliance licenses in Thailand, India, and Brazil, showcasing notable achievements in compliance.
Initially, the market doubted that CZ’s departure would affect Binance’s operations, but data shows that Binance has performed remarkably well this year. Coingecko indicates that Binance’s daily trading volume has remained relatively stable, ranking first among all exchanges for 24-hour trading volume, with monthly active users reaching 530 million. According to DefiLlama data, Binance has seen a net influx of over $4 billion from the end of November last year to the present, firmly holding its position as the leading exchange. Recently, Rachael announced that Binance’s historical trading volume surpassed $100 trillion in early September.



Overall, after leaving behind the strong support of the patriarch, Binance seems to have delivered a commendable performance. However, on the other hand, new crises are slowly approaching.
In terms of compliance, earlier this year, Nigeria dealt a heavy blow to Binance, announcing in February that Binance was suspected of illegal financial transactions on its platform. Furthermore, it accused Binance of exacerbating the collapse of its national currency, with rumors circulating that the authorities intended to impose a $10 billion fine. Although this rumor was later debunked, in February, Nigerian authorities detained Binance executives Tigran Gambaryan and Nadeem Anjarwalla under various pretexts, and to this day, Binance’s issues with Nigeria remain unresolved, with Gambaryan still not released.
On the other hand, public scrutiny has never left Binance.
At the end of last year, due to unsatisfactory new projects on the Launchpad, Binance faced accusations of “friend tokens,” claiming that the Hooked Protocol’s IEO, with unclear product attributes and limited team experience, was merely a result of friendly relations between Primitive Capital’s Dovey Wan and He Yi. In April, following the IEOs of Space ID and Open Campus, these rumors intensified, with users on platform X even sarcastically claiming that Binance had a “friend token” section. At that time, He Yi responded by stating that Binance absolutely did not have a “friend token” section, and earlier this year, CZ outlined three main focus areas for Binance’s 2023 plan, with education at the forefront, followed by compliance and product service, gradually calming public sentiment.
If the “friend token” issue was merely a small circle of disputes, it wasn’t long before high FDV tokens sparked a major debate in the entire cryptocurrency market. Initially, Tradetheflow released a chart indicating that the tokens listed by Binance in the past six months generally performed poorly, with many experiencing a halving right after listing, all sharing significant high FDV characteristics. This led to a debate between Dragonfly and a16z regarding MEME and VC tokens. In this context, Binance was accused of frequently listing tokens that siphoned off market liquidity, leading to a decline in altcoins, and serving only VC tokens, straying from community interests and becoming a tool for market exploitation, prompting a chorus of resistance from the market.



On May 20, Binance’s public relations team acted swiftly, announcing a public recruitment plan for listing projects. According to the announcement, tokens launched with high valuations and low circulation models would lead to significant selling pressure upon future unlocks, which is detrimental to ordinary investors and loyal community members. To cultivate a healthy industry ecosystem, Binance pledged to support small and medium-sized cryptocurrency projects first.
On June 16, He Yi also addressed FDV and “friend tokens” during a community AMA, stating that the anti-VC sentiment and the popularity of memecoins reflect a lack of quality assets in the market, expressing hope for more projects with genuine business models to be built on blockchain rather than remaining as mere concepts, and acknowledging insufficient investigation prior to the listing of Hooked.
In reality, after that, Binance has been cautious about listing VC tokens, with the frequency of high FDV tokens being significantly reduced, and began aligning with community-favored MEME tokens and the trending Ton ecosystem. Following the initial listing of NOTCoin, DOGS followed suit, while Hamster and Catizen have also been listed on Binance, bringing the total to six tokens related to the TON ecosystem. However, this move sparked dissatisfaction within the community, accusing Binance of unclear listing logic, with a shift from application value to traffic value, and a lack of industry intent by listing tokens for quick profits. The dispute over the Nerio project further fueled the controversy, as a $20 million market cap project became a focal point of criticism, with accusations of market manipulation and widespread allegations of insider trading.
In the face of various criticisms, He Yi maintained stability, not only writing a lengthy response but also elaborating on the current listing process and the four major listing criteria, humbly stating that “he may not necessarily be right.”
Interestingly, throughout this whirlpool of public opinion, the core reason seems to be Binance’s innovation. In the current market environment, Binance seeks to change steadily to capture a larger share, yet it is precisely due to seemingly bold innovations and the underperformance of new tokens that it has been repeatedly accused of losing its original intention and vision, with He Yi’s responses being criticized as overly active and not resembling a captain.
Ultimately, in users’ minds, Binance remains the Binance led by CZ, where the rapid growth during the industry boom dulled users’ tolerance thresholds. Users have become accustomed to the founder’s silent work style and hope for Binance to lead crypto growth and innovation as an industry bellwether.
However, it is worth noting that the current market environment is vastly different from before. Over the past two years, not only is the specter of compliance hanging high, but the entry of Wall Street institutions adds uncertainty. The crypto market is no longer centered around exchanges as the absolute voice. Meanwhile, the primary market investment institutions are entering a winter, with pronounced liquidity shortages in the market, and innovative applications are increasingly rare, with PvP becoming prevalent, leaving only MEME tokens thriving. Even project operations and promotions are now appearing in newly devised ways. All this reflects that the industry has entered a reshuffling period, and exchanges are inevitably shedding their faith-driven guise, arriving in the world with a primitive commercial posture.
Given this context, the market holds high expectations for CZ’s return, hoping that he can once again lead the cryptocurrency space through the storm to find a new direction. However, it is important to emphasize that, as part of the plea agreement, CZ will be prohibited from participating in the company’s daily operations for three years. Of course, his equity in Binance remains valid, allowing him to monitor the company’s performance as a shareholder or take actions such as appointing or nominating new board members or a new CEO.
However, due to CZ’s status at Binance and the presence of co-founder and partner He Yi, it is highly likely that he will participate in the company’s operations in other forms. Nonetheless, given that two external monitors appointed through the plea agreement will closely scrutinize similar situations, CZ’s involvement in guiding company operations will likely be indirect for safety reasons.
Even after reaching the plea agreement, CZ has expressed no intention to assume any form of CEO role, focusing instead on investing in blockchain, artificial intelligence, and biotechnology companies. The non-profit project Giggle Academy, which CZ was previously involved in, has stalled since his incarceration, and the market can look forward to its future progress.
Can CZ turn the tide? From the current market situation, the challenges are numerous, as this is a market issue that cannot be resolved by a single individual. In other words, CZ is someone who climbed to the top from the old era, and the old narrative is now losing its strength. Fortunately, new flows are still entering, with younger and more creative groups stepping into the cryptocurrency space. In this moment of change, how to embrace and prioritize these new groups and new logics may be a challenge that the legendary CZ needs to address going forward.
On the other hand, regardless of the circumstances, CZ’s return is a significant boon for Binance, and the uplift in user sentiment will have a positive effect, making it highly probable for Binance’s series of tokens to experience an upward trend, as some market participants have already begun to target the so-called CZ release concept.
This illustrates that even though the market is no longer the same, CZ remains the same CZ.