Regulators Are Coming for Rule-Breaking Crypto Founders Like CZ

Changpeng “CZ” Zhao has become the latest in a long line of crypto founders facing potentially significant legal consequences.

The founder of Binance Holdings Ltd., the world’s largest crypto exchange, resigned from his post as CEO as part of a settlement agreement with US prosecutors that includes the possibility of jail time. That makes him the newest member of a club that includes Sam Bankman-Fried of FTX, Alex Mashinsky of Celsius, and Do Kwon of Terraform Labs.

Zhao, who founded Binance in 2017, developed a reputation for being a canny operator, a fierce competitor, and someone prone to ...