Live Update from CZ Court: Judge Sentences to Four Months Imprisonment
Binance’s former CEO Changpeng Zhao, also known as CZ, will appear in court at midnight to determine his sentence. The court will engage in a debate on the matter.
Judge Jones stated that he disagrees with the prosecution’s request for a harsher sentence as there is no evidence to suggest that the defendant was informed of any illegal activities. Although the prosecution’s lawyers presented precedents indicating that CZ could have known, the judge deemed these examples insufficiently persuasive.
The prosecution’s lawyers responded by asserting that CZ intentionally attempted to exploit the US financial system, and CZ himself has pleaded guilty.
Judge Jones essentially agrees with the probation office’s perspective. The total offense level is 12, which would result in 10-16 months of imprisonment and 1-3 years of post-release supervision. The opinions of the prosecution, defense, and CZ will now be heard before a final ruling is made.
The prosecution’s attorney argued that if CZ, after intentionally committing a crime, is not subjected to imprisonment and goes on to establish the world’s largest cryptocurrency exchange and amass wealth, then no one will ever be incarcerated, and banking secrecy laws would be rendered meaningless.
The prosecution’s lawyer stated that while Binance’s subsequent cooperation with regulations is commendable, it does not warrant probation. Probation would only encourage others to follow suit, and there is significance in imposing incarceration as a punishment.
The judge questioned whether such a severe sentence would be proportional to the offense. The prosecution’s lawyer replied that this would not be unjust as no single defendant has ever shouldered such a significant responsibility. The judge remains skeptical and believes that the penalty should be commensurate with the severity of the crime.
CZ’s mother, son, nephew, and sister were all present at the hearing. The topic then shifted to the extradition process, with CZ voluntarily appearing in the US for trial instead of resisting extradition for 4-5 years, as seen in other cases.
The judge posed questions to the defense attorney. The defense attorney argued that CZ had no control over Binance and that all evidence suggests a lighter sentence is appropriate. The defense attorney even agreed to a probation period of 5 months or less.
The defense attorney stated that there are no similar cases where imprisonment has been imposed. The discussion briefly touched on the case of Arthur Hayes, the founder of BitMEX, who failed to implement adequate KYC/AML measures.
Due to court attendees taking photos and uploading them on Twitter, the judge issued a warning regarding this behavior.
CZ spoke, acknowledging the initial failure to implement KYC/AML measures but highlighting subsequent active cooperation with the US government. The judge responded, expressing the possibility of leniency and acknowledging the court’s examination of CZ’s active cooperation with law enforcement agencies.
The judge mentioned the numerous letters of support received, which revealed a person driven by motive, passion, and determination, willing to risk all assets for the success of Binance.
He pointed out that although CZ had compliance personnel in the US, he failed to abide by regulations and violated KYC/AML-related risks. The judge said, “Reports indicate that billions of dollars worth of bitcoin were directly sent to the dark web. I am disturbed by the information submitted by the parties, including references to your statement. Therefore, a request for leniency is better. Through this difficult lesson, you have the ability and willingness to reform.”
The judge ultimately sentenced CZ to 4 months in prison.
