Changpeng Zhao Denies Wild Federal Reserve Allegations, Emphasizes Past Prison Time

A bizarre conspiracy theory claiming that Binance founder Changpeng “CZ” Zhao is secretly working for the U.S. Federal Reserve has gone viral on social media, prompting a firm denial from Zhao himself.

The rumor, which originated during a widely attended audio chat on X hosted by Chinese influencer Liangxihgui, suggested that CZ’s legal troubles in the U.S. were fabricated and that he’s actually a covert government operative. The discussion quickly caught attention, drawing over 100,000 listeners.

Zhao responded directly on X, calling the story fictional and “entertaining, but completely false.” To set the record straight, he confirmed he did spend four months in a U.S. prison from May to September 2024 over anti-money laundering violations, and shared some of his experiences following his release. However, at the time of writing, the tweet from CZ seems to be deleted.

This wasn’t the first time CZ had to confront online rumors. Earlier, he pushed back against a Wall Street Journal report alleging he collaborated with the U.S. Justice Department to undermine Justin Sun. Zhao dismissed the article as part of a smear campaign and accused certain media outlets of profiting from false narratives. Sun also denied any knowledge of such claims and voiced support for Zhao.

READ MORE:

Best Crypto to Buy Now as Investors Turn to Stablecoins for Safety

CZ pointed out that many of these rumors appear to be attempts by influencers to boost engagement, adding with some humor that if he truly worked for the Fed, Bitcoin might be at record highs by now.

Since stepping down as Binance CEO, Zhao has turned his attention to new ventures. He’s now leading YZi Labs, formerly Binance Labs, and continuing to develop Giggle Academy—an educational project aimed at children, which officially launched its app in late 2024. Zhao has said his focus going forward will be on expanding this initiative.

Alexander Stefanov