NewsletterHow Binance’s Changpeng Zhao Sentence Will Impact The Market?
Former Binance CEO Changpeng Zhao was sentenced to four months in prison after pleading guilty to money laundering violations in the United States. On April 30, the former CEO of the largest crypto exchange by volume once regarded as the most powerful man in the market was sentenced.
The court’s decision sparked several discussions along crypto spaces on the impact of the conviction of Zhao. Last year, the $4.3 billion settlement with the Department of Justice (DOJ) which led to Zhao stepping down slowed down investor confidence in the market. This is because of the position Zhao and Binance hold among cryptocurrency stakeholders.
Crypto Users Hold Different Views on Sentencing
While the initial signal sent to the market was a negative trend, several analysts view the impact to be minimal. Regulatory clampdowns by global authorities are often a bearish undertone for crypto assets.
The fall of FTX which heightened the bear market is a typical example of negative sentiments on the back of global investigations. However, in the case of FTX, the fall of the second largest exchange and the billions of assets wiped out was the cause of the market plunge and not subsequent global regulatory efforts.
At press time, Bitcoin trades at $57,560, a 6.4% drop in the last 24 hours while the wider market plummeted 5.33%. This drop can be seen in both ways; the continued price correction or Zhao’s sentencing.
On the other hand, analysts opine that the price drop is due to macroeconomic factors and not the sentencing of Zhao.
Binance Changpeng Zhao Becomes World’s Richest Prisoner
Another twist to the story is Changpeng Zhao becoming the richest inmate with about $33 billion. Although Zhao stepped down from his role as Binance’s CEO, he still controls a major stake in the company.
The conviction of Changpeng Zhao comes after Sam Bankman-Fried of FTX although authorities stressed the distinction of both cases. Following Zhao’s resignation, he launched an educational program, Giggle Academy for disadvantaged kids.
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