CZ Slams Baseless Accusations About Federal Reserve Ties and Prison Avoidance

As speculation and conspiracy theories continue to ripple through the crypto community, a particularly bizarre claim has emerged—this time targeting Binance co-founder and former CEO Changpeng Zhao (CZ).

A Chinese influencer, known as Liangxihgui on X (formerly known as Twitter), recently alleged that CZ never served jail time and is secretly working for the US Federal Reserve.

The accusation, made during an X Spaces session that drew over 119,000 listeners, quickly gained traction across Chinese-speaking circles online.

CZ swiftly addressed the rumours, taking to X to publicly debunk the claims.

In a post that included a screenshot of the original message, he called the theory “amusing but entirely false.”

He confirmed that he did in fact serve a four-month prison sentence in the US, from May to September 2024, related to violations of anti-money laundering regulations.

He also shared brief reflections on his experience behind bars.

According to CZ, such outlandish narratives are being amplified by influencers seeking traffic, engagement, and visibility.

He remarked on the growing trend of content creators name-dropping him, Binance Coin, or the exchange itself to drive attention.

While he dismissed the claim as baseless, he ended his post on a surprisingly light note—joking that the viral attention could even be a bullish signal for the market.

The original post by CZ has since been deleted.

CZ Denounces WSJ’s “Baseless” Claims

Prior to addressing the recent conspiracy theories, CZ had already pushed back against another rumour making the rounds.

This earlier claim alleged that he had cooperated with the US Department of Justice to target fellow crypto entrepreneur Justin Sun.

According to a Wall Street Journal report, Binance executives were purportedly negotiating a return to the US regulatory landscape while simultaneously aiding the DOJ in gathering evidence against Sun.

CZ firmly denied the report, labelling it a smear campaign and accusing the publication of spreading misinformation for profit.

He reiterated that he had served his prison sentence and rejected any implication of collusion with authorities.

Sun also responded, stating he was unaware of such claims and dismissed the idea outright.

CZ noted that such narratives often originate from influencers chasing clout and engagement.

In response to the more outlandish rumors, one follower wryly remarked that if CZ truly worked for the Federal Reserve, Bitcoin would have already hit a new all-time high.

Justin Sun Teams Up with CZ to Debunk Rumours

Sun was the first to respond publicly, describing CZ as a mentor, friend, and benefactor.

He denied any knowledge of the allegations and expressed full confidence in CZ, noting that his own firm, T3FCU, has consistently cooperated with the US Department of Justice.

According to WSJ, Binance executives had met with officials from the US Treasury Department, reportedly requesting the removal of a government-appointed monitor overseeing the exchange’s compliance with anti-money laundering regulations.

This monitor was installed following Binance’s 2023 guilty plea and $4.3 billion settlement with U.S. authorities.

The report also claimed that the Justice Department had been investigating Sun for months and alleged that CZ had agreed to provide evidence against him as part of a plea agreement.

However, Sun’s representatives firmly denied the story, rejecting all claims made in the Journal article:

“It is false to suggest that Tron enables criminal activity.”

A spokesperson said:

“We decline to comment on baseless allegations about legal matters.”

Even Co-Founder & Chief Customer Service Officer Yi He weighed in.