CZ Court Update: Judge Sentenced to Four Months

(Former Binance CEO Zhao Changpeng will face sentencing at midnight, courtroom battle to ensue)

Former Binance CEO Zhao Changpeng will face a midnight court hearing to determine his sentence, as the courtroom prepares for arguments.

Judge Jones stated that he disagreed with the Department of Justice's request for an increased sentence guideline, as there was no evidence that the defendant was informed of engaging in illegal activities. While the DOJ lawyers cited precedents suggesting CZ could have known, the judge found this argument unconvincing.

DOJ lawyers responded that CZ intentionally tried to exploit the U.S. financial system, and CZ himself pleaded guilty.

The judge essentially agreed with the probation office's viewpoint. The total level is 12, which would result in 10-16 months of imprisonment and 1-3 years of post-release supervision. Before the final ruling, the opinions of the DOJ, defense, and CZ will now be heard.

Prosecutors argued that if CZ, after intentionally breaking the law, did not face imprisonment and went on to build the world's largest cryptocurrency exchange, then no one would be jailed, and banking secrecy laws would be meaningless.

DOJ lawyers noted that Binance and CZ later cooperated actively with regulations, which is commendable, but not grounds for probation. Probation would only encourage others to follow suit, and there is significance in seeking imprisonment.

The judge questioned whether such a harsh sentence would be appropriate for the crime. The DOJ lawyers responded that it would not be unfair, as no single defendant has borne such a heavy responsibility. The judge remained skeptical and believed the sentencing should be proportionate to the severity of the offense.

CZ's mother, son, nephew, and sister were present at the meeting. The discussion turned to a plea letter, stating that CZ voluntarily went to the U.S. for trial and did not resist extradition like other defendants in similar cases, which took 4-5 years.

The judge questioned the defense lawyer. The defense lawyer stated that CZ had no control over Binance, and all evidence indicated a lighter sentence was appropriate. The defense lawyer also suggested a probation of 5 months or even lighter.

The defense lawyer mentioned that there were no similar cases where imprisonment was imposed. The conversation briefly shifted to BitMEX founder Arthur Hayes regarding BitMEX's failure to comply with KYC/AML (anti-money laundering) regulations.

Due to spectators taking photos and uploading them to Twitter, the judge issued a warning.

CZ stated that initially, KYC/AML was not properly implemented, but later, he actively cooperated with the U.S. government. The judge responded, indicating that CZ may be eligible for a reduced sentence, as the court has reviewed his active cooperation with law enforcement agencies.

The judge noted numerous plea letters, highlighting a person driven by a passive motive, passion, and determination, willing to risk all assets to make Binance successful.

He pointed out that although CZ had compliance staff in the U.S., he failed to comply with regulations, violating KYC/AML-related risks. The judge said, "Reports show that billions of dollars worth of bitcoins were sent directly to the dark web. I am deeply concerned about the information submitted by the parties, including references to your statements. Therefore, seeking forgiveness is the better option. Through this difficult lesson, you have the ability and willingness to reform."

The judge ultimately sentenced 4 months.