Key Points
- Binance’s founder, Chanpeng Zhao, is sentenced to 4 months in jail.
- The sentence in Seattle comes following his guilty plea from last November regarding the violation of anti-money laundering regulations.
Binance’s founder, Changpeng Zhao, has just received his sentence in Seattle – he will be serving 4 months in jail, according to the latest reports.
The hearing started about half an hour later than initially programmed, at 9:30 AM PT.
Live reports stated that the prosecution was trying to get some enhancements on CZ’s sentencing. The Court found that CZ has accepted responsibility, said Judge Richard A. Jones.
At one point, Kevin Mosely, the prosecutor, said that what CZ did was not a mistake; “it wasn’t a regulatory oops.” As a result of asking for forgiveness, not permission, CZ made himself a billionaire and celebrity, Mosely continued. He told the Court that incarceration is necessary in order to reflect the seriousness of the offense.
Mosely reportedly continued and said that the scale of the crime is magnitudes of order greater than other offences. He believes that the recommended guideline sentence is not enough of a deterrent because of the brazenness and magnitude of the misconduct.
The Probation Department recommended a custodial sentence of 5 months, which they feel is enough to deter the defendant and others without being “unnecessarily harsh.”
The Defense said that the government is not discussing the actual crime, which is that CZ pleaded guilty to not having an anti-money laundering program. They continued and said that the sanctions violations are irrelevant.
CZ’s lawyer, Mark Bartlett, said that he never minimized his conduct, and he admitted his mistake, showing remorse.
Zhao’s defense made a strong case
A second defense lawyer, William Burck, also spoke on CZ’s behalf, saying that when they read the government’s submission, it seemed like the kind of submission that “a desperate defendant would write” because it says to ignore the sentencing guidelines.
Burck managed to make a stronger case for CZ, highlighting that the government’s request for three years is exaggerated.
Both lawyers mentioned “sealed matters,” as it seems that some of the filings have been sealed.
Elizabeth Lopatto, senior writer at The Verge, who was covering the hearing live, noted that she found it curious that the defense lawyers kept referring to “a mistake,” bringing up the fact that CZ’s messages quoted in multiple court cases allegedly showed that avoiding anti-money laundering controls was not a mistake, but “a strategy.”
Such language “cuts against the idea that CZ is taking full responsibility for his misconduct,” she explained.
Judge Richard Jones reportedly said that “this unprecedented in terms of volume, scale and masiveness in dollar impact of noncompliance.”
On the other hand, if the government wanted to put CZ in jail for a longer period of time, it’s interesting that they let him plead to something with a short sentence, Lopatto noted, highlighting again the “matter under seal,” that continued to be brought up.
CZ’s lawyer Burck said that if he got prison time, this would tell people not to come to the US and accept responsibility for their crimes. He noted that due to the fact that CZ is a non-citizen, he is not eligible for a minimum security facility.
Also, because of his fame and Binance’s cooperation with the government, there’s real risk in the presence of such facilities.
CZ addresses his regrets
After a short recess, Zhao also spoke and said that he was sorry and he wanted to take responsibility for his mistakes. He also noted that Binance did implement a KYC/AML program, and it’s cooperating with the US government.
Zhao also said that he wants to create a platform for online education for underprivileged kids, which would be rewarding and meaningful.
During the hearing, someone took a photo and shared it on X:
Judge Richard Jones said that everything he sees in CZ’s history and characteristics are “of a mitigating nature and a positive nature.” The Court recognized that CZ came voluntarily to the US and has not previously broken laws, taking significant steps in cooperation with law enforcement.
The Judge does not think that Zhao is likely to re-offend, but the scale of the offense is remarkable. While the Judge wants to consider deterring future crime, the letters sent to the Court on CZ’s behalf will play an important role in his sentencing.
The Judge also said that he was troubled by CZ’s statement – the opening line of the government’s brief – that it was better “to ask for forgiveness than permission.”
The final verdict of the Judge was four months in prison.
CZ pleaded guilty in 2023 regarding violating anti-money laundering
The sentence comes following his guilty plea from November 2023, regarding violating anti-money laundering regulations set in place by the Department of Justice in the US.
Previous reports revealed that prosecutors proposed a stricter punishment due to CZ’s dismissive stance towards compliance. Earlier, Bloomberg noted that CZ would become the richest person in US federal jail if he gets sentenced.
The publication also highlighted that his fortune, along with the one of Binance, is set to grow, regardless of his sentence today.
In a court filing before his sentencing hearing today, prosecutors cited the flippant attitude on display and other remarks as one of the reasons for which they recommended three years in jail for CZ. This was longer than what the guidelines prescribed, as Bloomberg reports.
CZ to enter history books due to his wealth
CZ will be entering history books as the richest person ever to do time in a US federal lockup since his ownership of Binance remains intact. CZ’s estimated personal fortune is of $43 billion.
Bloomberg also noted earlier that “jail or no jail,” CZ’s wealth will most likely grow bigger as Binance’s business accelerates.
Also, Binance’s new board of directors is dominated by CZ’s devoted friends and the mother of his three children, who plays an important role in running Binance’s operations.
Recently, in a letter that was addressed to the U.S. Judge from the Western District of Washington, Richard A. Jones, Zhao said that there is no excuse for his failure to establish the necessary compliance controls at Binance. He also gave an assurance tht this would remain his only encounter with the criminal justice system.
He also said that he wanted to support biotech startups and the youth. There have been 161 other letters of support seeking leniency from family members, friends, and others.
Not too long ago, CZ had to give up voting control in the Dubai local entity, so that Binance could receive a full crypto license there.
The new Binance CEO, Richard Teng, pledged to enhance compliance and relations with regulators all over the world.
