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What Did Changpeng Zhao Give to the Feds? CZ’s 4-Month Jail Sentence In-Depth Analysis

In this post:

  • Crypto and legal experts ponder the disparities between Changpeng Zhao and Sam Bankman-Fried’s jail sentences.
  • CZ’s deal with the Feds and US DOJ ensures a 4-month prison term and a return to regular life afterward.
  • Binance now has an “independent compliance monitor” inside the crypto exchange.

Two crypto bigwigs, Changpeng Zhao (CZ) and Sam Bankman-Fried (SBF), were sentenced to jail this year. One received a four-month sentence, while the other is serving a 25-year sentence. This begs the question: What did Binance’s CZ give to the Feds? What got Changpeng Zhao a lighter sentence?

Also Read: The Crypto Community Shows Binance’s CZ Love as He Begins His Prison Sentence

Reports have it that CZ has begun serving his 4-month jail term at a prison facility with minimal security level in Lompoc, California. On the other hand, the US DOJ is looking to transfer SBF to a new prison, a maximum prison cell. Was SBF unlucky, or is CZ simply smart? 

CZ and SBF Side-by-Side Court Procedures

Changpeng Zhao, often called “CZ” in crypto circles, was sentenced to four months in April. This comes after pleading guilty to charges that Binance violated US anti-money laundering (AML) laws. There are many differences between Changpeng Zhao and Sam Bankman-Fried’s court procedures.

The first noticeable difference was the difference in their appearance in court. It was ‘Crypto Court Fashion Week’ for CZ as he showed up in a tailored navy blue suit with a light blue tie. On the other hand, Sam Bankman-Fried was ‘conveniently dressed’ from head to toe.

SBF defends himself in court
Source: X (Twitter)

Another detail that the global and legal world noticed is that SBF was branded a crypto fraud and, hence, earned 25 years in prison. On the other hand, CZ is the crypto hero that did not unleash another crypto winter. He got 4 months in prison.

Bankman-Fried duped crypto investors, entered not-guilty pleas, repeatedly perjured himself in court, and was found guilty on seven counts. “I’m sorry about what happened at every stage,” SBF said. “I failed everyone I cared about.”

Imagine standing in court, and your every word read, ‘Your honor, given another opportunity, I would do this all over again and even much worse.’ That was the impression SBF gave Judge Kaplan, prompting him to say, “I did not think it a fruitful use of time to spell out every time I thought Mr. Bankman-Fried testified, willfully and knowingly, falsely at trial.”

She continued, saying:

And when he wasn’t outright lying, he was evasive, hairsplitting, dodging questions, and trying to get the prosecutor to reword questions in ways that he could answer in ways he thought less harmful than a truthful answer to the question that was posed would have been. I’ve been doing this job for close to 30 years. I’ve never seen a performance quite like that.

Judge Kaplan

On the contrary, CZ admitted wrongdoing and showed regret in a settlement with the authorities.  Changpeng Zhao, in his apology letter, stated, “I apologize for my poor decision and take full responsibility for my actions. In hindsight, I should have focused on Binance’s compliance changes from the beginning, but I didn’t.”

Changpeng Zhao Got Smart With US DOJ

Fashion and character flaws aside, what did CZ give to the authorities in exchange for a reduced prison sentence? Sure, Zhao is one powerful, high-end individual—Forbes rates him to be worth $33 billion. The US DOJ is equally powerful, and if they wanted to deal with CZ by the book, they would have.

During a court proceeding, Judge Richard Jones made reference to “billions of dollars of Bitcoin” transacted with “dark web markets.” The charges against Changpeng Zhao and Binance mentioned terrorist groups, including al-Qaeda, ISIS, and the military arm of Hamas.

Also Read: ZachXBT Flags 7 More Wallets Tied to North Korea’s Lazarus Group

There’s no evidence that Changpeng  Zhao knew these terrorist groups. However, the United States does not negotiate with terrorists and terrorist enablers. Did CZ have any leverage against the United States government, or did the US get a new hand in crypto through Binance?

As a part of the agreement, Binance now has an “independent compliance monitor” inside the company. This could mean that every governmental agency now has eyes on every crypto trade made on Binance.

What Did Changpeng Zhao Give to the Feds? CZ's 4-Month Jail Sentence in-Depth Analysis
Source: Bloomberg

How much information does CZ have on country-criminals in Iran and North Korea? Both nations have reportedly been advancing nuclear warheads for the past decade. North Korea’s sanctioned Lazarus group has drained the crypto community of more than $3 billion. How much information on China and its citizens is up for US grabs?

Whatever information CZ gave to the Feds was significant enough to get Zhao only four months in prison. Meanwhile, Bankman-Fried looks to waste away his youth in prison. Political donations and friends in Washington, D.C., could not help him. By the time SBF gets out, he will be 57 years old.


Cryptopolitan Reporting By Florence Muchai

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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 decisions.

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