Binance co-CEO reshuffle reignites scrutiny of Changpeng Zhao’s grip on power
Binance’s decision to elevate Yi He to co-chief executive officer is reviving long‑standing questions about how much influence founder Changpeng Zhao still wields over the world’s largest crypto exchange – and how far U.S. authorities can realistically go in enforcing a ban on his involvement.
The move comes at a politically charged moment. Former U.S. president Donald Trump’s pardon of Zhao has cast fresh uncertainty over the durability of a three‑year management prohibition that was central to a high‑profile 2023 plea deal with U.S. prosecutors. That combination – a new co‑CEO who is also Zhao’s long‑time partner, and a legal order whose force is now contested – is fueling speculation that CZ could, in practice, be closer to the controls at Binance than official agreements suggest.
From guilty plea to management ban
In 2023, Zhao, widely known as CZ, pleaded guilty to a federal offense in the United States in a case linked to Binance’s compliance failures. As part of a negotiated settlement, he resigned as chief executive and agreed not to take part in the global management of Binance for three years, during which the company would be subject to a government monitorship.
Court filings make clear that the ban was meant to be comprehensive: CZ was to step away from executive decision‑making and refrain from any role in directing the exchange’s worldwide operations. The monitorship program was conceived as a way for the U.S. Department of Justice and Treasury to oversee reforms inside Binance and ensure that the company overhauled its controls around sanctions, money laundering, and other regulatory priorities.
Yi He’s promotion and intertwined interests
Against that backdrop, Binance’s appointment of Yi He as co‑CEO is more than a routine corporate reshuffle. Yi He is not only a co‑founder of the exchange and a long‑time executive, but also the mother of Zhao’s children and his partner in managing the family’s wealth. Together they oversee YZi Labs, a family office that handles CZ’s personal and family investments. The name YZi itself fuses “Yi,” her first name, and “Z,” the initial of Zhao’s surname, underlining how closely their business and personal lives are intertwined.
This close relationship is central to the concerns now being raised. While nothing in the public record suggests that Yi He is acting as a proxy on behalf of Zhao, her promotion to the top executive tier of Binance inevitably raises the question: how cleanly can CZ’s influence be separated from the company’s strategic choices when a key decision‑maker is his partner in both family and finance?
CZ’s economic power remains overwhelming
Beyond personal ties, Zhao’s financial clout over Binance remains largely intact. Estimates indicate that he controls around 90% of the global exchange’s equity, as well as roughly 86% of its U.S. affiliate. That level of ownership gives him enormous leverage, regardless of whether he occupies a formal management position.
Even after stepping down, Zhao continues to reference Binance in his online persona, including in his social media profiles and handle. While branding choices alone do not violate legal obligations, they reinforce the perception that he remains deeply connected to – and potentially influential within – the company he built.
For regulators, this creates a structural challenge: separating “management control” from “owner influence” in a business where one individual dominates the cap table and remains closely linked to the leadership team.
Trump’s pardon throws enforcement into doubt
The situation was made more complex when Donald Trump issued a presidential pardon for Zhao. The pardon eliminated his federal criminal conviction and, according to legal analysts, restored various civil rights that had been impaired by the felony judgment.
What remains contested is how far that pardon reaches into the realm of regulatory obligations born out of the plea agreement. The management ban and the monitorship program were not just political punishments; they were specific conditions of a legal settlement between Zhao, Binance, and U.S. authorities. Whether those conditions automatically dissolve with the pardon is far from settled.
Split legal views on what the pardon actually does
Legal commentators are sharply divided on the impact of the pardon on Zhao’s commitments. One school of thought argues that voiding the conviction undermines the legal basis for key aspects of the settlement, potentially weakening the ability of the Department of Justice and the Treasury to enforce the monitorship and the management prohibition. From this perspective, if the underlying criminal judgment disappears, some or all obligations connected to it could be vulnerable to challenge.
An opposing view holds that Zhao entered into the plea agreement voluntarily and that his promise to step away from executive roles at Binance may stand as a binding contractual obligation unless it is explicitly withdrawn by a separate presidential action or renegotiated with the authorities. Under this interpretation, the pardon affects criminal liability and civil rights, but not necessarily the negotiated corporate governance constraints that were part of the deal.
The absence of a clear public interpretation from the government has left a vacuum, into which speculation and legal theorizing have rushed.
Binance’s push to end the monitorship early
Complicating matters further, Binance has been in active talks with the Department of Justice about winding down the monitorship program ahead of schedule, according to people familiar with internal discussions. Both the DOJ and Binance have declined to publicly discuss the pace or prospects of those negotiations, but the mere fact that conversations are taking place suggests the company believes it has made sufficient progress on compliance reforms to argue for a lighter supervisory touch.
Ending the monitorship early would have major implications. It could reduce direct U.S. oversight of Binance’s internal processes and, by extension, affect how closely Washington can scrutinize any behind‑the‑scenes role Zhao might seek to play. For critics already skeptical about the enforceability of the management ban, that prospect heightens concerns about a potential early return of CZ to a more hands‑on capacity.
Governance, optics, and regulatory trust
The appointment of a co‑CEO who shares both a personal life and business interests with the founder under scrutiny presents a serious optics problem for Binance. Even if all legal obligations are technically observed, regulators and market participants are likely to question whether informal channels of influence could circumvent the formal ban.
For a company already under the microscope for its past compliance missteps, the perception of governance weakness can be almost as damaging as an actual breach. Institutional clients, banking partners, and regulators tend to look not only at legal structures, but at practical realities: who sets the tone, who drives strategy, and whose interests ultimately prevail in key decisions.
What this means for investors and users
For users and token holders, the reshuffle raises broader issues about concentration of power in major crypto platforms. Binance remains a central hub of liquidity for the digital asset ecosystem, and disruptions to its operations or regulatory standing can ripple across markets. A scenario in which regulators doubt the effectiveness of earlier settlements, or perceive Binance as testing the limits of those agreements, could trigger renewed investigations or stricter oversight.
On the other hand, supporters of CZ and Binance argue that continuity of vision is vital in a still‑emerging industry, and that the involvement of founding figures, even from the sidelines, helps guide long‑term strategy. They see Yi He’s promotion as a logical elevation of an experienced executive who has been instrumental in building Binance’s brand and global footprint, rather than as a covert attempt to reinsert Zhao into management.
Wider implications for crypto regulation
The standoff over Zhao’s role has implications well beyond one company. It is rapidly becoming a test case for how far governments can go in imposing behavioral conditions on powerful founders in decentralized or cross‑border industries. If a presidential pardon can effectively neutralize key aspects of a complex settlement, future enforcement actions against crypto giants may need to be structured differently to ensure durability.
Regulators around the world are watching how U.S. authorities respond. Many jurisdictions have been wrestling with how to police influential individuals who can move assets and operations across countries with relative ease. The Binance‑CZ saga highlights the tension between national legal tools and the global nature of crypto businesses: ownership can sit in one jurisdiction, management in another, and servers in a third, complicating any attempt to ring‑fence influence.
The path ahead: clarity vs. ambiguity
In the coming months, several developments could bring more clarity: a public statement from U.S. authorities about how they interpret the pardon’s scope; formal changes, if any, to the monitorship agreement; and observable shifts – or lack thereof – in Zhao’s public role in Binance’s strategic decisions.
If Washington chooses to take a hard line, it may seek written assurances, additional undertakings, or even new legal actions to reinforce the original intention of sidelining CZ from management. If it opts for a more pragmatic, negotiated approach, the effective result could be a gradual normalization of his influence, even without a formal reinstatement.
A founder who never really left
For now, the situation sits in a gray area. Officially, Zhao remains outside the executive suite, bound by an agreement negotiated in 2023. Unofficially, he retains majority ownership, a strong public association with the brand, and a partner now seated in one of the highest roles at the company.
Yi He’s promotion crystallizes a reality that many in the industry already suspected: CZ’s departure from Binance was always more legal formality than clean break. Whether U.S. authorities can, or will, translate legal technicalities into practical constraints on his influence will shape not only Binance’s future, but the broader precedent for regulating dominant founders across the crypto landscape.