CZ’s four-month prison sentence prompted mixed initial reactions.
Shortly after news broke that former Binance CEO Changpeng Zhao, also known as CZ, would be serving four months in federal prison for violating anti-money laundering laws, two things happened.
First, with a net worth of more than $40 billion, according to Bloomberg, CZ would be the richest person to have served time in federal prison in the United States. Second, reactions to the news that the man who helped build the world’s largest cryptocurrency exchange would be imprisoned set the internet ablaze.
Former Binance colleague Patrick Hillmann joined in to voice his support.
“I witnessed it firsthand with CZ. “We have rebuilt our management team around him in 2021 to prepare Binance to be regulated at a global level,” said former Binance Chief Strategy Officer. Posted in. ““Judge Jones rendered a just ruling considering the seriousness of CZ’s mistakes and attempts to correct past mistakes.”
CZ apologized at Tuesday’s sentencing hearing, saying he wanted to take responsibility for his “mistakes.” Prosecutors wanted more severe punishment. 36 months Zhao’s case was based in part on claims that his exchange targeted U.S. users and intentionally violated the country’s laws.
Federal sentencing guidelines call for a term of 10 to 16 months for first-time nonviolent offenders, Braden Perry told The Block. Perry is a partner at Kennyhertz Perry and a former federal enforcement attorney.
A big factor in Tuesday’s ruling was precedent, and judges generally don’t like to deviate from precedent, Perry said.
“The criminal charges here and the fact that CZ is a first-time non-violent offender led the judge to analyze other sentences received by similarly situated individuals,” Perry said. “As the defense attorney pointed out, most, if not all, have never been in prison before.”
Others are not so satisfied
A billionaire pioneer in the cryptocurrency world heading to prison has become the second high-profile CEO in the industry to be ordered to spend time behind bars this year. CZ’s one-time archrival, former FTX CEO Sam Bankman-Fried, was sentenced to 25 years in prison in March.
Better Markets CEO Dennis Kelleher reacted negatively to Tuesday’s proceedings, calling the ruling a “serious miscarriage of justice” in a post Tuesday.
“‘Crime pays’ is not the message the judge sent today, but the message the Department of Justice sent through its soft, minimalistic sweetheart deal with Binance’s former CEO, CZ,” he added.
Despite being unhappy with the four-month sentence, Kelleher said the judge in the case was “boxed in” because the U.S. Department of Justice “simply indicted” CZ for failing to properly implement an anti-money laundering program. A CEO who committed money laundering.
Terrence Yang, managing director of Swan Bitcoin, said in a statement: “While the DOJ did not have sufficient supplies to provide CZ with a three-year guarantee, it is unbelievable that CZ received four months rather than 18 months. “I can’t,” he said. “The judge listed a number of mitigating factors, saying he believed CZ had worked hard and had received many letters from people who were family and had known him for a long time. Of course he did. He was a 10-year estate.”
Potential to serve all four months
If you’re expecting CZ to get his sentence reduced for good behavior, at least one expert doesn’t believe that will happen.
“CZ is not expected to benefit from the time credit program and is expected to serve 120 days in federal prison,” said Sam Mangel, who works as a federal prison consultant. “CZ will serve his sentence in a low-security facility rather than the minimum-security detention center provided for similar cases or sentences. This is because CZ is not a U.S. citizen. Although he will be uncomfortable, Zhao will be safe and will not be robbed or in danger. I won’t be punished.”
Updated to reflect that Zhao pleaded guilty to an anti-money laundering offense and will serve four months in prison as a result of that guilty plea.
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