From 25 years in prison to just four months: Inside the final verdict on a crypto billionaire CEO archrivalry

Combination showing Former FTX CEO, Sam Bankman-Fried (L) and Zhao Changpeng (R), founder and chief executive officer of Binance.

Mike Segar | Reuters | Benjamin Girette | Bloomberg | Getty Images

An arch rivalry between one-time crypto titans was brought to a close at a federal courthouse in Seattle on Tuesday when Binance founder Changpeng Zhao was handed a sentence of four months in prison. A month earlier, on the opposite coast in downtown Manhattan, FTX’s Sam Bankman-Fried received a 25-year prison sentence for his crimes.

It seemed an underwhelming and somewhat anti-climactic finish to a protracted battle between Zhao and Bankman-Fried, two men who were legendary adversaries, as well as key stewards of the $2.2 trillion crypto sector.

For years, Binance’s Zhao and FTX’s Bankman-Fried preached the power of decentralized, digital currencies to the masses. Both were bitcoin billionaires who drove Toyotas, 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 overreach of the government.

Ultimately, both also helped crypto critics and regulators make the case that the skeptics had been right all along — the industry was rife with grifters and fraudsters intent on using new tech to carry out age-old crimes.

Bankman-Fried, 32, was 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, 47-year-old 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.

Yet, much else about the pair is starkly at odds — perhaps most notably, the 296-month difference in their respective prison sentences.

“Comparing CZ and SBF, both figures emerged as prominent in the cryptocurrency sector but under vastly different circumstances,” said Braden Perry, a former senior trial lawyer for the CFTC.

“The nature of their alleged crimes reflects different aspects of the ‘dark’ and illicit corners of crypto: CZ’s case seems to focus on regulatory and compliance failures, while SBF’s case hinges on direct financial misconduct and deception,” Perry said.

Indeed, the disparate consequences for the two former crypto CEOs lay bare that the pair was, in the end, nothing alike in business or in personal dealings.

A tale of two bitcoin billionaires

It was the small things — the type of details that you don’t notice at first and are often difficult to articulate the significance of once you do — that betrayed the more notable differences between the two former CEOs.

Take Manfred, a worn stuffed animal that Bankman-Fried has carried around the world with him since birth, from California, to Hong Kong, to the Bahamas, and then back home to Palo Alto, where the FTX founder lived under house arrest until he was remanded to custody for tampering with witnesses.

The 32-year-old toy, which has lost much of its shape and identifying features, sat on the bed of his sparsely decorated room in his parents’ house on Stanford University’s campus in his final days before incarceration. It was a harmless prop at first glance, more a charming nod to an adolescent spirit than the sort of window into Bankman-Fried’s inner psyche that some of those who knew him would later attempt to turn it into.

Two of Bankman-Fried’s former colleagues and friends took turns at speculating on its meaning. One thought that SBF kept the stuffed animal close because “he doesn’t need to share Manfred with anyone,” according to reporting from “Going Infinite,” the Michael Lewis book that profiled Bankman-Fried. Another guessed, “I think it is very, very important for him to have an emotional attachment.”

Lewis himself writes that “Sam didn’t care about real animals” and that it had, in fact, been “an expected value calculation, rather than emotion, that had led him to go vegan.”

Bankman-Fried did have a history of intimacy issues. Part of it, according to his family, friends, work colleagues, criminal defense attorneys, and even Bankman-Fried himself, had to do with his inability to feel much of anything, for anyone, including romantic love interests.

FTX founder Sam Bankman-Fried leaves the U.S. courthouse in New York City on July 26, 2023.

Amr Alfiky | Reuters

His lawyers described him as often struggling socially, disclosing that in high school, Bankman-Fried “realized he was anhedonic, or unable to experience joy or pleasure.”

“As Sam describes it, he experiences negative emotions in ways that are not very different from many other people — neither much more extreme, nor much less negative. But he does not feel pleasure, or happiness, or joy, even when something very good happens to him,” a court filing in SBF’s criminal…

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