Binance’s former CEO, Zhao Changpeng (CZ), will face a court hearing at midnight to determine his sentence, and the court will engage in a back-and-forth debate.
Judge Jones expressed disagreement with the prosecution’s request for an enhanced sentencing guideline, as there is no evidence to suggest that the defendant was informed of any illegal activities. Although the prosecution lawyer presented precedents indicating that CZ could have known, the judge deemed this precedent insufficiently persuasive.
The prosecution lawyer responded by stating that CZ intentionally attempted to exploit the U.S. financial system, and CZ himself has admitted guilt.
Judge Jones essentially agreed with the probation office’s perspective. With a total offense level of 12, this would result in 10-16 months of imprisonment and 1-3 years of post-release supervision. Prior to the final ruling, the court will now hear the opinions of the prosecution, defense, and CZ.
The prosecution attorney argued that if CZ, after intentionally committing crimes, does not face imprisonment and goes on to establish the world’s largest cryptocurrency exchange, it would set a precedent where no one would be held accountable, rendering bank secrecy laws meaningless.
The prosecution attorney stated that although Binance and CZ later cooperated actively with regulators, this cooperation does not warrant probation. Probation would only encourage others to follow suit, and imprisonment has its significance.
The judge questioned whether it would be fair to impose such a severe sentence, to which the prosecution attorney responded that it would not be unjust, as no single defendant has ever shouldered such a heavy responsibility. The judge remained skeptical and believed that the punishment should be commensurate with the severity of the offense.
CZ’s mother, son, nephew, and sister all attended the meeting. The topic then shifted to a plea letter, which mentioned that CZ voluntarily traveled to the U.S. for trial, unlike other defendants in similar cases who resisted extradition for 4-5 years.
The judge posed questions to the defense attorney. The defense attorney stated that CZ had no control over Binance and all evidence suggests a lighter sentence is warranted. The defense attorney also agreed to a five-month probation or even a lighter sentence.
The defense attorney argued that there are no cases where similar offenses have resulted in imprisonment. The topic briefly shifted to the case of BitMEX founder Arthur Hayes, who failed to comply with KYC/AML regulations.
Due to court attendees taking photos and uploading them to Twitter, the judge issued a warning regarding this behavior.
CZ spoke and acknowledged that KYC/AML was not initially done properly but later actively cooperated with the U.S. government. The judge responded that he believed CZ had the potential for leniency, as the court had examined the fact of CZ’s active collaboration with law enforcement entities.
The judge noted the numerous plea letters, which revealed a person driven by passive motives, passion, and motivation, risking all assets for the success of Binance. He pointed out that although CZ had compliance officers, he failed to abide by regulations and violated KYC/AML-related risks. The judge said, “Reports show that billions of dollars’ worth of bitcoins were directly sent to the dark web. I am deeply concerned about the information submitted by the parties, including references to your statement. Therefore, requesting mercy is better. Through this difficult lesson, you have the ability and willingness to mend your ways.”
The judge ultimately sentenced CZ to four months in prison.
CZ, Binance, probation.