The former Binance CEO Changpeng Zhao has been sentenced today to four months imprisonment in the US.
It is a lower punishment than many bettors anticipated. For example, those who placed a wager on Polymarket expected the judge to give a penalty of 6 months.
Zhao is now headed to an American prison where he will serve his lower sentence. Zhao’s team only sought five months probation, compared to the 36-months requested by the Department of Justice. Zhao’s Team only requested five months of probation.
Zhao must also pay $50 million in fines, according to his plea of guilty signed in November.
Prosecutors aimed high when requesting Zhao’s sentence — which is double the 18 months at the high end of the guidelines — because they wanted the sentence to match the “gravity” In a memo sent to the court last week, the Government outlined Zhao’s crimes.
“If Mr. Zhao does not face incarceration after deliberately and willfully planning to violate U.S. law to build the largest crypto exchange in the world and get rich in the process … then no one will face incarceration and the BSA will for intents and purposes be a dead letter,” Nikhilesh De, CoinDesk reporter, says that the prosecution argued during the hearing.
Our X article explains what you need know about sentenced:
What now?
Zhao was sentenced less than a week after Sam Bankman Fried, former CEO of FTX received his own court judgment.
SBF, unlike CZ did not reach an agreement with the government. Instead, a New York jury found SBF guilty of fraud at the end last year. The former Binance chief executive is now in jail for 25 years.
He agreed to accept a prison sentence of 18 month as part of a plea bargain.
Although this settlement concludes the DOJ actions against Zhao and Binance the Securities and Exchange Commission will still charge the pair. In a notable absence, the regulator did not appear in the DOJ’s agreement. Commodity Futures Trading Commission (CFTC), Treasury’s Financial Crimes Enforcement Network and Office of Foreign Assets Control were all included in the agreement.
In court documents filed earlier this month the SEC and Binance said they were still in the process of discovery. Zhao was mentioned in the filing. “served responses to the SEC’s interrogatories” Both parties continue to talk about SEC documents requests.
Zhao was sentenced to prison for what?
Zhao’s guilty verdict was part of a multi-billion dollar settlement that the Government reached with Binance towards the end of 2018. Although the price of the deal, which was set at $4 Billion, surprised many people, the fact that the investigation had taken place over several years and the news about it has been repeated repeatedly shocked others.
The former executive had received 161 supportive letters from friends and family asking the court for mercy.
Zhao in his letter of complaint to the Judge wrote there was “no excuse” Binance’s lack of compliance and anti-money laundering controls. He stated that he would like to have been able “change that part of Binance’s story.”
Zhao was ordered to be on US soil by the US court in late 2017. The former executive is not a US citizen — something that his team brought up to argue for leniency — and resides with his family in the United Arab Emirates. Zhao’s attorneys said before the sentencing that Zhao could not go to a minimal security facility as he was not a US national, something they wanted considered.
The DOJ has not stopped enforcing crypto laws against other players in the Web3 market. The Justice Department has arrested Samourai Wallet’s founders, claiming that the wallet acted as a mixing device for illegal funds. Roman Semenov of Tornado Cash and Roman Storm are also being investigated.
Do you want to know more about CZ’s sentence and the next steps? Click here to sign up for the Empire Newsletter. Casey Wagner of Blockworks gave us some insights into CZ’s court appearance on Tuesday.
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