Heroes to zeroes in 12 months: How the two biggest crypto billionaire CEOs proved the critics right
Combination showing Former FTX CEO, Sam Bankman-Fried (L) and Zhao Changpeng (R), founder and chief executive officer of Binance.
Getty Images | Reuters
After a brutal 18 months of bankruptcies, company failures and criminal trials, the crypto market is starting to claw back some of its former standing.
Bitcoin is up more than 150% this year. Meanwhile, Solana is nearly 10x higher in the last 12 months, and bitcoin miner Marathon Digital has also skyrocketed. Crypto-pegged stocks like Coinbase, MicroStrategy and the Grayscale Bitcoin Trust rose more than 300% in value year-to-date.
But even as prices swell, the sector’s reputation has struggled to regain ground after names virtually synonymous with bitcoin have both been found guilty of crimes directly related to their multibillion-dollar crypto empires.
For years, Binance’s Changpeng Zhao and FTX’s Sam Bankman-Fried preached the power of decentralized, digital currencies to the masses. Both were bitcoin billionaires who ran their own global cryptocurrency exchanges and spent much of their professional career selling the public on a new, tech-powered world order; one where an alternative financial system comprised of borderless virtual coins would liberate the oppressed by eliminating middlemen like banks and the over-reach of the government.
Yet they both, in the end, helped crypto critics and regulators make the case that some of them had been right all along; that the industry was rife with grifters and fraudsters intent on using new tech to carry out age-old crimes.
Even when the crypto market was at its hottest, as token prices hit all-time highs in Oct. 2021, some of the biggest names in business and politics shared their doubts.
JPMorgan Chase CEO Jamie Dimon said in 2021 at peak crypto valuations that bitcoin was “worthless,” and he doubled down on that sentiment earlier this year when he said that the digital currency was a “hyped-up fraud.” Microsoft co-founder Bill Gates said in 2018 that he would short bitcoin if he could, adding that cryptocurrencies are “kind of a pure ‘greater fool theory’ type of investment.” Legendary investor Warren Buffett said he wouldn’t buy all of the bitcoin in the world for $25, because “it doesn’t produce anything,” and Senator Elizabeth Warren (D-Mass.) has long been one of crypto’s greatest naysayers on Capitol Hill.
Rather than ushering in a new era of financial freedom, Zhao and Bankman-Fried were found guilty on a mix of charges including fraud and money laundering. Once the two biggest names in crypto, the sector’s greatest proponents now face jail time.
Bankman-Fried, 31, could be sentenced to life in prison after being convicted of seven criminal counts in early November, including charges related to stealing billions of dollars from FTX’s customers. Less than three weeks after Bankman-Fried’s conviction, Zhao pleaded guilty to criminal charges and stepped down as Binance’s CEO as part of a $4.3 billion settlement with the Department of Justice.
Their crimes varied, but ultimately, both crypto execs went from industry titans to convicted frauds in the span of 12 months, and it was, in part, the bitter feud between them that landed them there.
“They were both responsible for behavior that has kept a black eye on crypto and its association with criminal behavior,” said Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section.
The early days
Zhao and Bankman-Fried were friends at first, before they became one another’s chief rival.
CZ, as Zhao is also known, had been first to the space. After a stint as the chief technology officer of a centralized crypto exchange called OKCoin, he launched a spot exchange of his own in 2017 called Binance, which has since become the largest cryptocurrency trading platform in the world, by volume.
That same year, Bankman-Fried earned street cred in crypto circles for his bitcoin arbitrage trading strategy, dubbed the Kimchi swap.
While the price of bitcoin today is relatively standard across the world’s exchanges, six years ago, the price differential would sometimes vary by more than 50%. This kind of arbitrage-based strategy, though relatively straightforward, wasn’t the easiest thing to execute on crypto rails back then, since it involved setting up connections to each one of the trading platforms.
To scale the operation, Bankman-Fried launched his own quantitative crypto hedge fund, Alameda Research. But what really put him on the map, according to Bankman-Fried, was CZ himself.
Just after Bankman-Fried moved his business to Hong Kong at the end of 2018, he met CZ for the first time after contributing $150,000 to co-sponsor a Binance conference in Singapore. One of the perks of that donation was a slot onstage with the Binance chief.
According to author Michael Lewis, whose book profiling Bankman-Fried was published the day the former FTX CEO’s criminal trial began in October, Bankman-Fried said this appearance is what gave him “legitimacy in crypto.”
The pair, according to Lewis’s reporting, were nothing alike in business or in personal dealings.
“Sam was gunning to build an exchange for big institutional crypto traders; CZ was all about pitching to retail and the little guy,” Lewis wrote, adding, “Sam hated conflict and so was almost weirdly quick to forget grievances; CZ thrived on conflict and nurtured the emotions that led to it.”
The relationship between Zhao and Bankman-Fried began to sour a few months after they met.
In March 2019, CZ passed on paying Bankman-Fried $40 million to buy the futures crypto exchange that SBF had designed with his team, instead building a version of the same platform in-house. A month later, Bankman-Fried and a few others founded FTX.com, a first-of-its-kind futures trading exchange with a flashy new liquidation engine and features which catered to large-scale institutional clients. Binance was the first outside investor in FTX, funding a Series A round in 2019. As part of that arrangement, Binance took on a long-term position in FTX’s native token, FTT, which was created to give perks to customers.
FTX’s success begat a $2 billion venture fund that seeded other crypto firms. Bankman-Fried’s personal wealth grew to around $26 billion at its peak, and FTX reached a valuation of $32 billion before it all came crashing down.
As crypto prices ran up in 2021, Bankman-Fried’s reputation did the same. Suddenly, the wunderkind was praised by the press as the poster boy for crypto everywhere.
The FTX logo adorned everything from Formula One race cars to a Miami basketball arena. Bankman-Fried went on an endless press tour, bragged about having a balance sheet that could one day buy Goldman Sachs, and became a fixture in Washington, where he was one of the Democratic Party’s top donors, promising to sink $1 billion into U.S. political races before later backtracking. Bankman-Fried wielded some of that political influence to cast shade on Zhao and Binance’s dealing.
At the same time, CZ’s influence continued to grow, as did Binance’s market dominance. With assets of more than $65 billion on the platform, it processed billions of dollars in trading volume every year.
As the two grew to be formidable opponents, FTX opted to buy out Binance in 2021 with a combination of FTT and other coins, according to Zhao.
But much of Bankman-Fried’s empire was a mirage, while Zhao’s operation was laced with questionable business tactics under the hood. What ultimately exposed the grift at the two exchanges was the rivalry between the crypto bosses.
Battle of the titans rocks crypto
As crypto prices tanked in 2022 and a cascade of bankruptcies rocked confidence in the sector, Bankman-Fried boasted that he and his enterprise were immune. But in fact, the industry-wide wipeout hit his operation quite hard.
Alameda borrowed money to invest in failing digital asset firms in the spring and summer of 2022 to keep the industry afloat, then reportedly siphoned off FTX customers’ deposits to stave off margin calls and meet immediate debt obligations.
In Nov. 2022, a fight between Bankman-Fried and CZ on Twitter, now known as X, pulled the mask off the scheme.
Zhao dropped the hammer with a tweet saying that because of “recent revelations that have came [sic] to light, we have decided to liquidate any remaining FTT on our books.”
The threat led to a panic-led sell-off of the FTT token. As the price of the coin plummeted by over 75%, so too did confidence in the platform. FTX executives scrambled to contain the damage, but customers proceeded to pull billions of dollars off the exchange. Zhao, who swooped in and agreed to buy FTX in a fire sale, backed out of the deal after one day’s worth of due diligence, and the company spiraled into bankruptcy.
As outsiders got a look at FTX’s actual books for the first time, the fraud became clear: Bankman-Fried and other leaders at FTX had taken billions of dollars in customer money.
In fact, during the criminal trial of Bankman-Fried, both the prosecution and defense agreed that $10 billion in customer money that was sitting in FTX’s crypto exchange went missing, with some of it going toward payments for real estate, recalled loans, venture investments and political donations. They also agreed that Bankman-Fried was the one calling the shots.
The key question for jurors was one of intent: Did Bankman-Fried knowingly commit fraud in directing those payouts with FTX customer cash, or did he simply make some mistakes along the way? Jurors decided within a few hours of deliberation that he had knowingly committed fraud on a mass scale.
The government’s beef with Zhao and Binance was different.
Three criminal charges were brought against the exchange, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy. Binance has agreed to forfeit $2.5 billion to the government, as well as to pay a fine of $1.8 billion, for crimes which included allowing illicit actors to make more than 100,000 transactions that supported activities such as terrorism and illegal narcotics.
U.S. Attorney General Merrick Garland said in a press conference on Nov. 21 that the fine is “one of the largest penalties we have ever obtained.”
“Using new technology to break the law does not make you a disruptor; it makes you a criminal,” Garland said.
The $4.3 billion settlement and plea arrangement with the U.S. government, including the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department, resolves a multiyear investigation into the world’s largest cryptocurrency exchange. The Securities and Exchange Commission, however, was notably absent.
Zhao and others were also charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law,” according to the Justice Department. The DOJ is recommending that the court impose a $50 million fine on Zhao.
In the meantime, CZ has been released on a $175 million personal recognizance bond secured by $15 million in cash and has a sentencing hearing scheduled for Feb. 23. Bankman-Fried faces a sentencing hearing on March 28.
Indicted FTX founder Sam Bankman-Fried leaves the U.S. Courthouse in New York City, July 26, 2023.
Amr Alfiky | Reuters
Winning the war
Legal experts tell CNBC that one critical distinction in the case of Zhao versus Bankman-Fried is the success of their respective enterprises.
“One key difference between CZ and SBF that should not be underestimated is that CZ ran a company that remains highly profitable and solvent,” said Mariotti. He added, “Binance has a war chest that it could use to pay hefty fines and provide leverage that gave the DOJ and CFTC a reason to settle.”
Binance will continue to operate but with new ground rules, per the settlement. The company will be required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money-laundering standards. The company is also required to appoint an independent compliance monitor.
FTX, on the other hand, remains in bankruptcy court in Delaware as it looks to claw back cash in an attempt to make the exchange’s former investors and customers whole.
“Several factors may play into the outcome of CZ and why his guilty plea may have him spending minimal, if not any, time in prison versus SBF’s likely lengthy, if not life, sentence behind bars,” Braden Perry, who was once a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator, told CNBC.
Perry said that the connection with foreign crime, including money laundering and breaching international financial sanctions, was key to Binance’s undoing. There was, however, no pursuit of criminal fraud of its customers’ money — a key distinction from the case of Bankman-Fried.
Another thing in Zhao’s corner: his willingness to cooperate with the government.
Any time the Justice Department pursues a criminal prosecution or the SEC brings a civil enforcement action against a defendant, they will consider the cooperation of the defendant, according to Richard Levin, a partner at Nelson Mullins Riley & Scarborough, where he chairs the fintech and regulation practice.
While CZ faces considerably less time in prison, Mariotti points out that despite the Binance founder’s significant fortune, he will still take a financial hit from the U.S. government.
“In the end, neither CZ nor SBF won,” said Mariotti, adding, “Leaders within the crypto community have seen what can happen, and perhaps the fall of these crypto ‘titans’ will signal smoother times ahead. But the continued lack of regulatory clarity and regulation through enforcement has not helped those looking for guidance on crypto compliance.”
Even as the dust settles, some of the companies still standing have struggled to stay afloat after venture capital dollars sought safer shores in startups geared toward generative artificial intelligence.
But a turnaround in token prices and crypto-pegged stocks has begun to buoy investor sentiment.
Traders are also increasingly bullish that the SEC will begin approving applications for a new spot bitcoin ETF, launched by leaders in traditional finance, by the first quarter of 2024. This type of exchange-traded fund would allow investors to buy into digital currency directly, through the same mechanism they already used to buy stock and bond ETFs.
Top asset managers, including BlackRock, WisdomTree and Invesco have all filed applications. A note from Bernstein says that, if approved, this will be the “largest pipe ever built between traditional financial markets and crypto financial markets.”
Environment
Tesla is under NHTSA probe for not properly reporting crashes involving Autopilot and FSD
NHTSA announced that it has launched an investigation into Tesla for not correctly reporting crashes involving its Autopilot and Full Self-Driving systems.
The National Highway Traffic Safety Administration (NHTSA), the road safety regulator in the US, already has several open investigations into Tesla, most of which are related to Tesla’s advanced driver assistance systems (ADAS): Autopilot and Full Self-Driving (FSD).
Now, it is opening a new investigation related to inconsistencies in how Tesla reports crashes involving its ADAS systems.
Due to the Standing General Order 2021-01 (the “SGO”), automakers are required to report to NHTSA crashes involving their autonomous driving and advanced driver assistance systems within five days of being notified of them.
When it comes to Tesla, it generally receives notification within minutes of a crash, as it has an automated collision snapshot that is sent to its mothership server following an accident.
Now, NHTSA claims that Tesla has sometimes waited months to report crashes involving Autopilot and Full Self-Driving.
They wrote in their notice that they opened a new probe into Tesla:
The Office of Defects Investigation (“ODI”) has identified numerous incident reports submitted by Tesla, Inc. (“Tesla”) in response to Standing General Order 2021-01 (the “SGO”), in which the reported crashes occurred several months or more before the dates of the reports. The majority of these reports involved crashes in which the Standing General Order in place at the time required a report to be submitted within one or five days of Tesla receiving notice of the crash. When the reports were submitted, Tesla submitted them in one of two ways. Many of the reports were submitted as part of a single batch, while others were submitted on a rolling basis.
Tesla told NHTSA that this was due to an “error” in their systems, and they claim to have fixed it, but the agency wants to investigate further:
Preliminary engagement between ODI and Tesla on the issue indicates that the timing of the reports was due to an issue with Tesla’s data collection, which, according to Tesla, has now been fixed. NHTSA is opening this Audit Query, a standard process for reviewing compliance with legal requirements, to evaluate the cause of the potential delays in reporting, the scope of any such delays, and the mitigations that Tesla has developed to address them. As part of this review, NHTSA will assess whether any reports of prior incidents remain outstanding and whether the reports that were submitted include all of the required and available data.
It’s not surprising to see the regulator being suspicious about Tesla’s excuse, following our report that Tesla lied and misled police and plaintiffs to hide its Autopilot crash data in a recent wrongful death case that the automaker lost in trial.
Tesla leads level 2 ADAS system crash data reporting by a mile (ADAS level 2 on the left and ADS level 3-5 on the right):
Tesla only appears on the chart for the level 2 driver assistance system and not on the crash reporting for the automated system, since, despite what its CEO and some shareholders claim, Tesla doesn’t have any system deployed in the US that qualifies as fully automated.
However, when it comes to level 2 ADAS crash reporting, Tesla leads with over 2,300 crashes, followed by GM, which reports 55 crashes with its SuperCruise system.
It’s not the first time that Tesla has had issues with NHTSA’s crash reporting. We previously reported that Tesla abuses NHTSA’s confidential policies to have most of the data related to the crashes redacted, and the automaker claimed that it would ‘suffer financial harm’ if its self-driving crash data became public.
Electrek’s Take
It certainly wouldn’t be the first time that Tesla tries to weasle its way out of reporting crash data related to its automated driving efforts.
At this point, it’s basically its modus operandi.
Yet, we are supposed to trust the company to deploy safe systems that automate driving?
Tesla has proven extremely opaque and untrustworthy in its safety reporting regarding Autopilot and Full Self-Driving. I think that’s a fair statement backed by facts.
That’s not what you want from a company deploying products that are potentially dangerous to road uses.
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Toyota’s new electric SUV boasts significantly more range, a revamped interior and exterior design, and an NACS port for recharging at Tesla Superchargers. Despite the upgrades, the 2026 Toyota bZ is $2,000 cheaper than the outgoing model.
2026 Toyota bZ electric SUV prices and range by trim
The bZ4X, Toyota’s first electric SUV, has been killed off and replaced with the upgraded bZ. Toyota improved it in almost every way possible for the 2026 model year, adding driving range, more features, a fresh new look, and more.
Even with the upgrades, the new and improved Toyota bZ is cheaper than the outgoing bZ4X. Toyota revealed prices for the 2026 bZ electric SUV will start at $34,900, or $2,170 less than the outgoing model.
That’s for the base XLE FWD trim with a 57.7 kWh battery, good for 236 miles range. Upgrading to the extended-range bZ XLE FWD Plus will cost $37,900, but a larger 74.7 kWh battery provides up to 314 miles of driving range, representing a 25% improvement over the 2025 model year.
For AWD, prices start at $39,900. Thanks to new SIC semiconductors, AWD models now pack up to 388 hp, 50% more than the outgoing electric SUV.
The range-topping 2026 Toyota bZ Limited FWD trim starts at $43,300, while upgrading to AWD will cost you an extra $2,000.
| 2026 Toyota bZ trim | Battery | Range | Starting Price* |
| XLE FWD | 57.7 kWh | 236 miles | $34,900 |
| XLE FWD Plus | 74.7 kWh | 314 miles | $37,900 |
| XLE AWD | 74.7 kWh | 288 miles | $39,900 |
| Limited FWD | 74.7 kWh | 299 miles | $43,300 |
| Limited AWD | 74.7 kWh | 278 miles | $45,300 |
Toyota’s new electric SUV now features a built-in NACS port, allowing you to recharge at Tesla Superchargers. With a new thermal management system and battery preconditioning, the bZ can charge from 10% to 80% in about 30 minutes.
The new electric SUV features a fresh look both inside and out. Like the latest Camry and Crown, the bZ features Toyota’s new “hammerhead front end design” with an LED light bar across the front.
Inside, the 2026 bZ gets a redesigned center console and a larger 14″ Toyota Audio Multimedia touchscreen, two wireless phone chargers, and an improved dashboard.
Toyota said dropping the “4X” at the end of the name was to simplify things for buyers. The 2026 models are expected to begin arriving at dealerships in the second half of 2025, which could be any day now.
With the 2026 model year arriving soon, Toyota is offering clearance prices on the 2025 bZ4X with up to $12,000 off in lease cash. You can use our link to find Toyota bZ4X models in your area (trusted affiliate link).
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Environment
ChargePoint’s Omni Port that can charge any EV is now available as a conversion kit for older stations
Innovative EV charging network ChargePoint is expanding the availability of its modular Omni Port EV charger to its customers. While pre-fitted new chargers continue to roll out across the US, ChargePoint has introduced a new conversion kit version of the universal charging technology, giving older stations more modern compatibility.
If you’ve ever owned, leased, or rented an EV in the US, chances are you’ve encountered a ChargePoint ($CHPT) station or port during your travels. The company estimates that it currently holds a 60%+ market share of public AC charging ports in North America and continues to introduce new strategies and technologies to keep that EV network humming.
For example, ChargePoint began implementing AI to monitor and report EV charger issues so they could be addressed more quickly, reducing downtime. Last month, the company announced a new charger checkup program called “Safeguard Care” to maintain and clean stations before any issues arise.
On the tech side of things, ChargePoint has introduced faster V2X level 2 chargers and anti-theft and anti-vandalization charger cables. However, ChargePoint’s most interesting innovation of the past year is its Omni Port EV Charger plug, which combines J1772 and NACS ports into one while maintaining the capabilities for CCS1 DC fast charging where available.
It’s been just over a year since the Omni Port was unveiled. While new EV chargers donning the tech continue to roll out, ChargePoint has introduced an additional solution to update older, existing stations.
ChargePoint’s conversion kit can update older EV chargers
ChargePoint shared details of its new “Omni Port adaptable charging solution,” designed to bring modern updates to existing EV chargers. The new conversion kit will roll out alongside production of the charging network’s pre-fitted Omni Port Level 2 chargers to further ensure more customers can charge in any space, with any connector (aside from CHAdeMO), regardless of make and model.
ChargePoint hopes the addition of the conversion kit will enable it to bolster its existing EV charger network by providing a solution to the connector issue. Many existing BEVs still utilize J1772 plugs while the entire industry slowly transitions to the North American Charging Standard (NACS). ChargePoint’s CTO of Hardware, Hossein Kazemi, elaborated:
As many automakers shift toward the NACS charging port, charging providers need to serve all of their customers – regardless of their vehicle’s connector type. Omni Port enables customers to future proof their charging infrastructure and eliminates the hassle of dedicating parking spaces to a specific connector type. For EV drivers, it ensures they will encounter the connector type they need to charge at any Omni Port location.
As we explained when the Omni Port debuted last summer, the charging process is seamless. EV drivers register their vehicle in the ChargePoint app and tap to charge, and the station automatically releases the correct connector type.
At the time, ChargePoint also pointed out that the modular design of its EV chargers would allow station owners to upgrade to new technology like the Omni Port, which debuted as being “future-ready.” With the addition of the conversion kit, station owners do not need to replace their EV chargers entirely and instead can swap a minimal amount of components quickly and affordably—all while upgrading to the most up-to-date universal charging technology.
There is no word yet on when the conversion kits will start rolling out, but this could provide a huge technological boost to ChargePoint’s existing EV charger networks, which are already one of the most prominent in North America. We love to see it.
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