Ex-Binance CEO CZ Says Crypto Has Already Lived Through Its ‘Darkest Quarter’

Despite Binance’s settlement and his prison term, Zhao argues that the crypto sector is now structurally stronger.

• Binance faced intense U.S. scrutiny following the 2022 FTX collapse, culminating in a $4 billion settlement and CZ’s prison term.
• CZ said the crypto industry has already endured its darkest quarter,  referencing regulatory crackdowns and post-FTX turmoil.
• The former Binance CEO believes that the current volatility in the industry is macro-driven and not systemic.

Former Binance (BNB) CEO Changpeng Zhao said the crypto industry has already endured its “darkest quarter,” surrounding the 2022 collapse of FTX and the regulatory crackdown that followed, on the All-In Podcast, on Monday. 

Speaking with host Chamath Palihapitiya, Zhao reflected on the legal battles, enforcement actions, and market turmoil that engulfed the sector after FTX’s bankruptcy, describing it as an unprecedented strain on both Binance and the broader industry. He added that crypto has since emerged more resilient and structurally stronger.

Binance (BNB) was trading at $592.23m, down 5.5% in the last 24 hours. On Stocktwits, retail sentiment around BNB remained in the 'neutral' zone, as chatter around the coin remained at 'extremely high' levels over the past day.

FTX Collapse Triggered Industry-Wide Shock

The 2022 collapse of FTX marked the climax of crypto’s 2020 to 2021 bull cycle and accelerated the industry’s brutal bear market. Once one of the largest exchanges globally, FTX filed for bankruptcy after it was revealed that customer funds were allegedly misused and commingled with its trading arm, Alameda Research. 

While Binance was not accused of FTX-related fraud, the collapse intensified regulatory scrutiny across the cryptocurrency sector, particularly in the United States. Zhao acknowledged that by late 2022, regulatory discussions had turned more aggressive. He described the experience as navigating negotiations with limited precedent, saying many lawyers told him they had “never seen this case like this.”

From Systemic Crisis To Macro-Driven Volatility 

Unlike the FTX-driven panic of 2022, today’s volatility is rooted more in macro uncertainty and institutional positioning. Bitcoin’s recent decline to $60,000 last week reflected broader risk-off sentiment rather than a single catastrophic corporate failure.

Zhao argues that the structural stress test has already happened. Exchanges collapsed, executives were prosecuted, regulators intervened, and yet crypto markets continued to function. Zhao suggests that the industry has emerged from its darkest stretch.

“There were some really tough periods,” Zhao said, recalling months of negotiations with U.S. authorities in late 2022 and early 2023. He added that the “worst case” scenario was his prison sentence.

Binance’s $4 Billion Settlement, Prison Term

Zhao ultimately served four months in prison after Binance agreed to a multi-billion-dollar settlement with U.S. regulators over anti-money laundering and compliance failures. As part of the resolution, he stepped down as CEO.

Read also: Bitcoin Drops 47% From Peak, But Jefferies Sees No New Crypto Winter

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