-CZ of Binance was sentenced to four months in jail.
-The judge declared, “There’s no evidence that the defendant was ever informed” of any criminal activities at Binance.
Seattle — On Tuesday, Changpeng “CZ” Zhao, the creator and ex-CEO of cryptocurrency exchange Binance, received a four-month prison sentence.
At the hearing of the Department of Justice’s case for a sentence of years, U.S. Judge Richard Jones sounded doubtful right away.
In a Seattle courtroom, the judge declared, “There’s no evidence that the defendant was ever informed” of any illegal activity at Binance. He then declared his disagreement with the U.S. Department of Justice’s recommendation to increase the sentence from the baseline guideline, which calls for 10 to 16 months in prison and up to three years of supervised release.
The judge declared, “The court finds the defendant has accepted responsibility.” “All of the things I’ve observed about you and your traits are of a mitigating kind,” the judge informed Zhao as he started reading his ruling.
The judge suggested that Zhao serve his term at the Federal Detention Center in SeaTac, according to a court document made public after the hearing, though the Bureau of Prisons would ultimately make the final choice. Zhao will be given a reporting date by the Probation and Pretrial Services Office to turn himself up.
Zhao was joined in court by his mother, sister, nephew, and son as he learnt his fate. He had buzz cut hair and was dressed in a navy blue suit and light blue tie. Zhao agreed to pay a $50 million fine as part of a plea agreement last year, which was a tiny portion of his total net worth. On Monday, Bloomberg revealed that he may own assets worth up to $43 billion.
“I believe that acknowledging one’s own mistakes is the first step toward accepting responsibility. Zhao said, “Here, I failed to fully set up a [know-your-customer program],” just before the judge’s ruling was announced. “I understand the value of having a strong KYC/[anti-money-laundering] program as well. For this reason, I gave Binance instructions to assist the US inquiry.”
The former CEO of the biggest cryptocurrency exchange in the world entered a guilty plea in November to a single count of breaking the Bank Secrecy Act, a conviction that carries a maximum 10-year jail sentence. However, his cooperation and guilty plea lessened that. According to a presentence report submitted by the Probation Office of the court, he should only serve five months in jail.
The proposals from prosecutors and defense attorneys were radically different: The Department of Justice requested that a federal judge sentence Zhao to three years in prison—double the amount specified in his plea deal. On the other side, his defense advocated for probation rather than any jail term.
His sentence is in contrast to the 25-year sentence that Sam Bankman-Fried, a former rival of FTX, recently received.