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Binance Founder Sentenced to 4 Months in Prison

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Changpeng Zhao, the billionaire founder of the giant cryptocurrency exchange Binance, was sentenced on Tuesday to four months in prison, a much lighter penalty than other crypto executives have faced since the industry imploded in 2022.

Mr. Zhao pleaded guilty last year to a money-laundering violation, acknowledging that his company allowed terrorist groups and other criminals to have access to its platform. Defense lawyers asked for probation without any prison time, while prosecutors requested a three-year sentence, calling it an “unprecedented” crime.

But Judge Richard A. Jones, who oversaw the case in U.S. District Court in Seattle, said in court on Tuesday that Mr. Zhao had taken responsibility for his offenses and was unlikely to break the law again.

“Your conduct does not warrant a 36-month sentence,” Judge Jones said. He called Mr. Zhao “a dedicated family man and a giving person” and praised his “staggering accomplishment” in building Binance.

Wearing a dark suit and light blue tie, Mr. Zhao, 47, did not visibly react as the sentence was announced. But he nodded vigorously during Judge Jones’s statement and touched his hand to his heart.

“I failed here,” Mr. Zhao said in brief remarks to the court. “I deeply regret my failure, and I’m sorry.”

It was not immediately clear when Mr. Zhao would report to prison. His lawyers asked the judge to expedite the process, and requested that he serve his sentence at SeaTac, a federal prison in the Seattle area.

The sentencing was the second high-profile penalty this year in the Justice Department’s campaign to root out criminal behavior in the crypto industry. In March, Sam Bankman-Fried, the founder of the collapsed FTX exchange and Mr. Zhao’s onetime business rival, was sentenced to 25 years in prison for fraud.

But Mr. Zhao’s sentence was an extraordinary contrast to Mr. Bankman-Fried’s penalty and the consequences that likely await other crypto executives who have been accused of crimes. Do Kwon, another high-profile crypto founder, was charged with fraud last year and sent to jail in Montenegro, as he awaits extradition to either the United States or his home country, South Korea. Alex Mashinsky, the chief executive of the failed crypto bank Celsius, is battling charges that carry decades of prison time.

Mr. Zhao’s four-month sentence is “an egregious miscarriage of justice and sends exactly the wrong message to criminals worldwide,” said Dennis Kelleher, the president of Better Markets, a nonprofit that supports stringent financial regulation.

Representatives for Mr. Zhao’s legal team and the Justice Department declined to comment. In a letter to Congress this week, Carlos Uriarte, an assistant attorney general, said lawmakers should establish harsher penalties for violations of the Bank Secrecy Act, the law that Mr. Zhao admitted to breaking.

Not long ago, Mr. Zhao stood atop the multitrillion-dollar crypto industry, with a large fortune and a devoted online following. Binance was the most powerful crypto company in the world, processing as much as two-thirds of all transactions. But it also faced investigations by several U.S. agencies into whether Mr. Zhao had broken the law to build his empire.

Facing intense legal scrutiny, Mr. Zhao, who goes by the initials CZ, was often dismissive. He described the concerns about Binance as “FUD,” or fear, uncertainty and doubt — shorthand in the crypto world for false rumors intended to hurt a business.

In November 2022, Mr. Zhao’s industry power increased after he helped bring down Mr. Bankman-Fried with a series of social media posts — Mr. Zhao has millions of followers on X — that prompted a run on FTX’s accounts. When FTX didn’t have the money to repay its customers, Mr. Zhao briefly agreed to buy the exchange, before pulling out of the deal. Soon Mr. Bankman-Fried was arrested on fraud charges, leaving Mr. Zhao as the industry’s dominant figure.

But behind the scenes, Mr. Zhao and Binance were negotiating with federal prosecutors, hoping to escape their own legal woes. Mr. Zhao lived in the United Arab Emirates, which does not have an extradition treaty with the United States, and prosecutors wanted an agreement that would force him to face criminal charges. With a possible indictment on the horizon, Mr. Zhao hired a team of white-collar defense lawyers at the well-known law firm Latham & Watkins.

Then he cut a deal.

In November, Binance agreed to pay $4.3 billion to several U.S. agencies, including the Justice Department, to settle charges that it had permitted terrorist organizations like Hamas, the Islamic State and Al Qaeda to use its platform. Prosecutors said that, under Mr. Zhao’s watch, Binance had refused to comply with American sanctions, allowing access to customers in countries like Iran, Syria and Cuba. The company also failed to report suspicious transactions involving narcotics and child sexual abuse materials, the government said.

Mr. Zhao told Binance employees that it was “better to ask for forgiveness than permission,” prosecutors said in a recent court filing. He also bragged that if Binance had complied with U.S. law, it would not be “as big as we are today,” the prosecutors wrote.

But unlike Mr. Bankman-Fried and other crypto executives, Mr. Zhao pleaded guilty to only a single criminal count. He admitted that he had failed to establish an adequate anti-money-laundering system at Binance, resigned as the company’s chief executive and agreed to a $50 million fine. But he retained his ownership stake in Binance and, with it, a $33 billion fortune, according to Forbes, making him crypto’s wealthiest executive.

In court filings last week, prosecutors said Mr. Zhao’s crime carried a sentence of 12 to 18 months in prison under federal guidelines. But they asked Judge Jones to impose a three-year term, arguing that he had violated the law “on an unprecedented scale.”

“This wasn’t a mistake — it wasn’t a regulatory oops,” Kevin Mosley, a lawyer in the Justice Department’s money-laundering section, said in court on Tuesday. “Breaking U.S. law was not incidental to his plan to make as much money as possible. Violating the law was integral to that endeavor.”

Defense lawyers countered that Mr. Zhao had demonstrated remorse and accepted responsibility for his crime, and shouldn’t face any time behind bars. They said he had not been charged with fraud or stealing anyone’s money, the crimes that Mr. Bankman-Fried committed. And they cast Mr. Zhao as a committed philanthropist who intended to give away the vast majority of his wealth.

During the hearing, Mr. Zhao’s sister, mother and son, a freshman at Pepperdine University, sat behind him in the gallery. In remarks to Judge Jones, William Burck, a lawyer for Mr. Zhao, argued that the three-year recommendation was significantly harsher than penalties faced by other defendants charged with similar offenses.

He called the prosecution’s sentencing submission “extraordinarily punitive and completely unfair.”

Ultimately, Judge Jones agreed that the recommendation was over the top. As the judge explained his reasoning, Mr. Zhao’s son silently pumped his fist.

Since his guilty plea, Mr. Zhao has remained in the United States, after Judge Jones rejected his request to return home to Dubai before the sentencing. He has spent the last few months traveling across the country, including to New York, Los Angeles and Telluride, Colo.

Mr. Zhao has already laid the groundwork for his next act. He has networked with other entrepreneurs and unveiled an online education platform called Giggle Academy, which he said would involve artificial intelligence. And he has spoken with start-ups working in biotechnology, an area in which he’s interested in investing.

Through his ownership of Binance, Mr. Zhao also remains poised to benefit from the growth of the crypto industry, which has experienced a resurgence in recent months.

“He still stands to continue profiting handsomely from the operations of that company,” Mr. Mosley said in court.

Glenn Thrush contributed reporting from Washington.



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Inside OpenAI’s Library – The New York Times

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The two-story library has Oriental rugs, shaded lamps dotting its desks and rows of hardbacks lining its walls. It is the architectural centerpiece of the offices of OpenAI, the start-up whose online chatbot, ChatGPT, showed the world that machines can instantly generate their own poetry and prose.

The building, which was once a mayonnaise factory, looks like a typical tech office, with its communal work spaces, well-stocked micro-kitchens and private nap rooms spread across three floors in San Francisco’s Mission District.

But then there is that library, with the ambience of a Victorian Era reading room. Its shelves offer everything from Homer’s “The Iliad” to David Deutsch’s “The Beginning of Infinity,” a favorite of Sam Altman, OpenAI’s chief executive.

Built at Mr. Altman’s request and stocked with titles suggested by his staff, the OpenAI library is an apt metaphor for the world’s hottest tech company, whose success was fueled by language — lots and lots of language. OpenAI’s chatbot was not built like the average internet app. ChatGPT learned its skills by analyzing huge amounts of text that was written, edited and curated by humans, including encyclopedia articles, news stories, poetry and, yes, books.

The library also represents the paradox at the heart of OpenAI’s technology. Authors and publishers, including The New York Times, are suing OpenAI, claiming the company illegally used their copyrighted content to build its A.I. systems. Many authors worry that the technology will ultimately take away their livelihood.

Many OpenAI employees, on the other hand, believe the company is using human creativity to fuel more human creativity. They believe their use of copyrighted works is “fair use” under the law, because they are transforming these works into something new.

“To say that this is a public debate right now is an understatement,” said Shannon Gaffney, co-founder and managing partner of SkB Architects, the architectural firm that renovated OpenAI’s headquarters and designed its library. “Though things might look like they are going in different directions, the library serves as a constant reminder of human creativity.”

When OpenAI hired Ms. Gaffney’s firm to renovate the building in 2019, Mr. Altman said he wanted a library with an academic aura.

He wanted it to be a reminder of the Green Library, a Romanesque library at Stanford University, where he was a student for two years before dropping out to build a social media app; the Rose Reading Room, a Beaux-Arts study hall on the top floor of the New York Public Library in Midtown Manhattan; and the library-like bar inside the now defunct Nomad Hotel, 15 blocks south of the Rose.

“My dining room and living room at home is inside a library — floor-to-ceiling books all the way around,” Mr. Altman said in an interview. “There is something about sitting in the middle of knowledge on the shelves at vast scale that I find interesting.”

Many titles, like “English Masterpieces, 700-1900” and “Ideas and Images in World Art,” seem like the weighty hardbacks that professional decorators place strategically inside hotel lobbies because they look the part. Still, the library is a reflection of the organization that built it.

On a recent afternoon, two paperbacks sat beside each other at eye-level: “Birds of Lake Merritt” (a field guide to the birds found in a wildlife refuge in Oakland, Calif.) and “Fake Birds of Lake Merritt” (a parody written by GPT-3, an early version of the technology that drives ChatGPT).

Some employees see the library as a quieter place to work. Long Ouyang, an A.I. researcher, keeps a rolling desk against the wall. Others see it as an unusually elegant break room. On weekends, Ryan Greene, another researcher, pumps his digital music through the audio speakers tucked among the hardbacks.

It is, other employees said, a far more inspiring place to work than a cubicle. “This is why so many people choose to work in the library,” Ms. Staudacher said.

Recently, Mr. Greene began feeding lists of his favorite books into ChatGPT and asking for new recommendations. At one point, the chatbot recommended “The Book of Disquiet,” a posthumously published autobiography from the Portuguese writer Fernando Pessoa. A friend, who knew his tastes well, had recommended that he read the same book.

“Given the trends and patterns in things that have happened in the past, the technology can suggest things for the future,” Mr. Greene said.

Ms. Gaffney, from OpenAI’s architectural firm, argued that this blend of the human and the machine will continue. Then she paused, before adding: “That, at least, is what I hope and feel.”



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Why TikTok Users Are Blocking Celebrities

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As protests over the war in Gaza unfolded blocks away, last week’s Met Gala was largely devoid of political statements on the red carpet. That the organizers of fashion’s most powerful annual spectacle (one for which tickets cost $75,000 this year) achieved this proved surprising to many observers. Less than two weeks later, though, a fast-growing online protest movement is taking shape. At least, it is on TikTok, the social media platform that was a sponsor of the Met event.

Blockout 2024, also referred to as Operation Blockout or Celebrity Block Party, targets high-profile figures who participants feel are not using their profiles and platforms to speak out about the Israel-Hamas war and wider humanitarian crises. Here’s what has happened so far, what supporters hope to achieve and why it all began.

The criticism began on May 6, when Haley Kalil (@haleyybaylee on social media), an influencer who was a host on E! News before the event, posted a TikTok video of herself wearing a lavish 18th-century-style floral gown and headdress with audio from Sofia Coppola’s 2006 film “Marie Antoinette,” in which Kirsten Dunst proclaims, “Let them eat cake!”

The clip (for which Ms. Kalil later apologized and which was deleted) was viewed widely. Given the current global conflicts and humanitarian crises, critics described it as “tone deaf.” Then posts emerged comparing ostentatious costumes worn by celebrities on the Met red carpet to scenes from “The Hunger Games,” in which affluent citizens in opulent outfits wine and dine while watching the suffering of the impoverished districts for sport.

Images of Zendaya, a Met Gala co-chair, spliced with photographs of Palestinian children, incited the online masses. A rallying cry soon came from @ladyfromtheoutside, a TikTok creator who found inspiration in Ms. Kalil’s parroting of Marie Antoinette.

“It’s time for the people to conduct what I want to call a digital guillotine — a ‘digitine,’ if you will,” she said in a May 8 video post with two million views. “It’s time to block all the celebrities, influencers and wealthy socialites who are not using their resources to help those in dire need. We gave them their platforms. It’s time to take it back, take our views away, our likes, our comments, our money.”

“Block lists” of celebrities thought to be deserving of being blocked were published and widely shared online.

The movement is made up of pro-Palestinian supporters who have been assessing the actions and words of A-listers in order to decide if they have adequately responded to the conflict. If they have said nothing or not enough, the movement calls for those supporting Gaza to block that celebrity on social media. What constitutes sufficient action by the famous person — be it calls for a cease-fire, donations to aid charities or statements — appears unclear and can vary from celebrity to celebrity.

“Blockout” supporters argue that blocking is important because brands look at data on the followers and engagement of influencers and celebrities on social media before choosing whether to work with them to promote a product. Blocking someone on social media means you no longer see any posts from the person’s accounts, and it gives the blocker more control over who has access to their own updates and personal information. It can have more impact than unfollowing a celebrity account because many product deals thrive on targeted ads and views that can accumulate even if a user simply sees a post, without liking or sharing it.

If enough people block a content creator, it could reduce the creator’s ability to make money. Also, adherents of this thinking say, why follow someone whose values don’t align with yours?

Attendees with huge followings, like Zendaya, Kim Kardashian and Kylie Jenner, have been at the top of the chopping blocks. But so have celebrities who didn’t attend the gala this year, including Justin Bieber, Taylor Swift and Selena Gomez.

Vogue, which according to Puck News published 570 Met Gala stories on its platforms and recorded more than a billion video views of content from the night, has also been targeted because of its ties to the event.

“The Met Gala is by far and away Vogue’s biggest cash cow,” Elaina Bell, a former Vogue employee, said in a TikTok post with 850,000 views. She explained that the event sold sponsorships “based on the data of past events,” adding, “How the Met Gala is seen is so important to the bottom line of Vogue specifically but also to Condé Nast.”

It certainly raised some eyebrows. The dress code was “The Garden of Time,” inspired by the J.G. Ballard short story of the same name. It’s an allegorical tale about an aristocratic couple isolated in their estate of fading beauty harassed by an enormous crowd preparing to overrun and destroy the space. Rather on the nose.

Yes. Some posts say the blockout is a negative example of “cancel culture.” Others suggest that, like other social media-led movements, it is digital posturing that generates little meaningful change.

Some argue that celebrities do not have a duty (or the awareness) to speak out on complicated geopolitical issues, and they question why it matters what famous people think about those issues, anyway. Others feel the movement has blurred parameters, given that some A-listers, like Jennifer Lopez and Billie Eilish, have previously shown support for a cease-fire in Gaza but are being punished for not speaking up now.

Several stars on the widely circulated block lists, including Lizzo and the influencer Chris Olsen, posted their first public videos asking followers to donate in support of aid organizations serving Palestinians. Blockout supporters have also worked to “boost” celebrities who have recently spoken about the conflict, like Macklemore, Dua Lipa and The Weeknd.

According to metrics from the analytics company Social Blade, many names on block lists have lost tens or hundreds of thousand of followers per day since the “digitine” began. But murky claims that stars like Kim Kardashian have lost millions of followers are unsubstantiated.

Will more A-listers start speaking out on the red carpet as a result of the lists? It is too soon to tell. But for frequent users of TikTok, the brand aura of the Met Gala is being profoundly altered. And while social-media-led boycotts are by no means unprecedented, this latest movement is a clear example of the growing power of creators to redistribute or even weaponize ​platforms that are cornerstones of a modern celebrity-centric — and capitalist — system.





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Grand Theft Auto maker firms up GTA 6 release date

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The latest instalment of the hugely popular series will be released in autumn 2025, its publisher says.



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