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- Changpeng ‘CZ’ Zhao will have to serve a four-month sentence in prison for anti-money laundering violations.
- The prosecutors fought for a longer sentence, while his defence portrayed him as remorseful; in the end, the judge leaned more with the defence.
One of the most high-profile court battles in the crypto industry has come to an end today. A US court has sentenced Changpeng Zhao to four months behind bars for failing to ensure Binance implemented adequate anti-money laundering checks, as Crypto News Flash reported.
Recap of Key Moments in CZ’s Sentencing
The sentencing was set to begin at 9 a.m. PT, but Judge Jones delayed it by half an hour due to a ‘personal matter.’ CZ walked in with a five-member legal team dressed in a dark blue suit and light blue tie.
The government went on the attack immediately, with lead prosecutor Kevin Mosley telling the court: “This wasn’t a mistake; it wasn’t a regulatory oops.” Mosley alleged that CZ was aware of the laws he was breaking and chose to still do it in an “ask for forgiveness, not permission” approach.
Mosley insisted that CZ must see the inside of a prison. He stated:
Incarceration is necessary to reflect the seriousness of the offense. The brazen nature of this conduct does require a sentence that includes a meaningful period of incarceration.
According to Mosley, it’s critical for the Binance founder to be imprisoned as any other punitive measure might give others ideas about the laxity of the US justice system.
The probation department was next. It recommended a custodial sentence of no longer than five months, which it said would deter others without being too harsh on CZ.
It was time for CZ’s defence to make a case for him. Mark Bartlett was first up, and he attacked the prosecutors for hammering down on CZ despite his cooperation with the Department of Justice. Further, he dismissed the accusations of sanction violations, saying they were irrelevant as the only crime CZ had pleaded guilty to was violating money laundering laws.
However, it was CZ’s second lawyer, William Burck, who seemed to have a greater impact on the court. Just like his colleague, he went on the attack immediately.
“When we read the government’s submission… it read to us like the kind of submission a desperate defendant would write”, as it calls on the judge to ignore the existing sentencing guidelines and impose a stricter-than-usual sentence.
Curiously, during the hearing, the two sides made reference to “matters that are under seal” without revealing any more details.
“I’m Sorry,” Says CZ
After a brief recess, it was time for CZ to address the court. He immediately acknowledged the mistakes he made as the head of Binance and apologized for his shortcomings.
The first step to taking responsibility is to fully recognize the mistakes.
As CEO, he tried to rectify some of the mistakes. In the latter years of his tenure, he implemented stringent KYC and fully cooperated with US authorities, he said.
In my mind, I wanted to do everything possible before stepping down as CEO.
In an attempt to right some of the wrongs, CZ said he’s giving back to the community. His latest venture is Giggle Academy, where he seeks to offer online education to underprivileged kids.
I find this new work extremely rewarding and meaningful.
It was then time for the judge to deliver his ruling. Judge Jones first acknowledged that he was pleasantly surprised by CZ’s efforts to atone for his shortcomings. This includes voluntarily coming to the US from the Middle East, where he resides, to cooperate with the government. He also hasn’t committed any other crimes, which speaks to his conduct.
Everything I see about your history and characteristics is of a mitigating nature and a positive nature. It’s also clear…that you’re a dedicated family man
However, the judge concluded that despite everything, CZ’s crime was “aggravating,” and he’d have to serve time for it. Billions of dollars had flown through Binance and into darknet markets and terrorism organizations because CZ failed to implement KYC and AML measures.
In particular, the judge said he was “deeply troubled” by CZ’s statement during the height of his Binance days that “it was better to ask forgiveness than permission.”
Judge Jones then handed CZ a four-month sentence, concluding:
There needs to be an effort by this court to impose a sentence that’s appropriate and reasonable.
The crypto market has reacted negatively to these developments with Bitcoin (BTC) dipping below $60,000. Trading at $59,920 after a 5% plunge in the last 24 hours, investors will look to defend this support position to maintain a bullish outlook.
Binance Coin (BNB) is trading for $570 after a 4% dip in the past 24 hours. Since the case began the altcoin has shown resilience, painting a bullish outlook for the long term.