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Binance’s Changpeng Zhao, alias “CZ,” to be sentenced TODAY

In this post:

  • Binance founder and former CEO Changpeng Zhao “CZ” is set to face sentencing in a federal court in Seattle today, April 30, 2024.
  • The sentencing comes after he and his company pleaded guilty last year to violating federal money laundering laws and sanctions.
  • Justice Department lawyers recommended a 3-year prison sentence for CZ, arguing this would hold him “accountable for his intentional criminal conduct” and “not just send a message to Zhao but also…the world.”

His name is Changpeng Zhao, and he was once the head of Binance. Many in the crypto community know him as CZ. To many, CZ is a hero, a legend, and a mentor. Today will be a turning point for crypto in matters of digital assets regulations. Also, today, April 30, 2024, will be a life lesson to what the SEC, CFTC, FBI, IRS, and the DOJ will do to those who are in decentralized finance.

CZ will know his fate today

CZ, 47, resigned as chief executive of Binance in November 2023 after acknowledging violations of US anti-money laundering laws. Just last month, Sam Bankman-Fried, A.K.A SBF, a crypto mogul whose FTX exchange collapsed in 2022, was sentenced to 25 years in prison for engaging in fraudulent activities and participating in money laundering activities.

As part of the plea agreement, Zhao has agreed to resign from his position as CEO of Binance and pay a hefty $50 million fine. This is due to the company’s failure to uphold a robust anti-money laundering program, as well as violations of sanctions related to users in Iran, Cuba, Syria, and Russian-occupied areas of Ukraine.

Prosecutors filed a request for a 36-month sentence in a Seattle federal court last week. They argued that giving Zhao a sentence twice as long as the recommended 18 months would demonstrate the seriousness of his crimes and emphasize the importance of following the law.

However, prosecutors contended that this would not sufficiently convey the gravity of CZ’s offense or serve as an effective deterrent. They aim to send a message that “the right choice, every time, is to comply with the law.”

The memorandum highlighted Binance’s operational model as being unregulated and lacking proper oversight under CZ’s leadership. It also pointed out the failure to report a significant number of suspicious transactions, which can be attributed to inadequate internal controls. The suspect trades involved transactions with designated terrorist groups such as Hamas, al-Qaida, and Isis.

Zhao’s willful violation of US law was no accident or oversight. He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets.

Justice department Prosecutors

CZ lawyers counter-argument – The crypto community reacts!!

Zhao’s legal team has asked for a five-month probation period, highlighting that the billionaire has taken accountability for the money laundering offenses. They also point out that Zhao has already spent over five months away from his loved ones due to a previous order to stay in the United States.

Submissions made by Zhao’s legal team contain correspondence from his family, investors, UAE royals, and former U.S. ambassador to China Max Baucus, among others, highlighting his philanthropic endeavors and portraying him as a devoted family person.

Last week, Zhao, who has been free in the US on a $175m bond since entering his guilty plea, expressed remorse for his actions in a letter to the judge overseeing the case. Zhao acknowledged the lack of justification for his inability to establish efficient compliance controls at Binance.

I apologise for my poor decisions and accept full responsibility for my actions. In hindsight, I should have focused on implementing compliance changes at Binance from the get-go, and I did not […] significant portion” of his time in the future helping young people in “as many places as possible”.

CZ

Zhao’s financial position as the owner of a key player in the $2.5tn crypto market remains unaffected by the enforced fine. According to Forbes estimates, Changpeng Zhao’s total net worth is $33 billion as of early Tuesday, placing him as the 50th richest person globally.

Nevertheless, there are inherent contradictions stemming from the decentralized nature of crypto. Based on the Bloomberg Billionaires Index, CZ’s net worth is $41.6 billion, making him the 29th wealthiest person globally.

Zhao, a citizen of Canada, emigrated to Canada in his early teens after following his academic father from the Chinese coastal region of Jiangsu, north of Shanghai. He worked in programming systems for the Tokyo Stock Exchange and Bloomberg after earning a computer science degree from McGill University in Montreal. 

In Shanghai, he founded a high-frequency trading platform where a conversation about bitcoin during a poker game eventually resulted in the founding of Binance in 2017.

Zhao’s lawyers have used the first-time offender’s “unflinching” admission of guilt, his multimillion-dollar fine, and the absence of jail time as punishment in comparable cases in their quest for a light sentence.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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