One of the richest people in the crypto industry got off with four months in prison.
During the hearing, U.S. District Judge Richard A. Jones denied the U.S. Department of Justice's request that Changpeng Zhao be jailed for three years. Reason: there was no evidence that the defendant was informed about illegal activities on the exchange.
Representatives of the Ministry of Justice insisted that a suspended sentence for Changpeng Zhao would also be the wrong decision, since "such a thing can encourage others to break the law and do it on the largest possible scale." The court agreed with the argument.
Speaking with the last word, Changpeng Zhao admitted that he could not properly build a decent customer verification system at Binance and establish anti-money laundering (KYC/AML) during his leadership.
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The community and industry participants reacted strongly to the verdict of Binance founder Changpeng Zhao (CZ), according to which he will spend four months in prison.
CZ himself thanked everyone for their "care and support".
"I will serve out my sentence, complete this phase, and focus on the next chapter of my life (education). I will remain a passive investor in the crypto industry (and a hodler). The industry has entered a new era. Compliance is very important, " he wrote.
Former Binance chief Strategy Officer Patrick Hillman noted that he witnessed Zhao "reshape the entire executive team" in 2021 to prepare the company for global regulation.
"I believe that Judge Jones gave a fair verdict, given the seriousness of both CZ's mistakes and his attempts to correct them," Hillman said.
Prosecutors had called for a more severe sentence of 36 months in prison. During the hearing, CZ apologized and expressed his willingness to take full responsibility. Prior to that, he had expressed remorse for "bad decisions" in a letter to the judge.
Ki Yoon Joo, founder and CEO of CryptoQuant, an analytical company, admitted that the ex-CEO of Binance "advanced" the crypto industry, helping to create convenient products and making purchases in cryptocurrency more accessible and secure.
Partner of Kennyhertz Perry law firm and former US Federal Prosecutor Brayden Perry in a comment to The Block called Zhao's sentence an important precedent:
"In this case, the alleged crime and the fact that CZ committed a nonviolent offense for the first time forced the judge to analyze what other sentences were handed down to individuals in a similar situation. As noted by the defense, most, if not all, have not previously received a prison sentence."
However, some people were not enthusiastic about the situation. Better Markets CEO Dennis Kelleher called the verdict a " blatant miscarriage of justice."
He added that the judge was "cornered" because the Justice Ministry accused Zhao not of money laundering, but of creating poor infrastructure to combat money laundering.
"Despite the obscene and unfounded boasts of the Ministry of Justice at the press conference at which the charges were announced, the department did not even raise a claim against CZ for money laundering. He was accused only of the lack of an appropriate program. It's less than a slap in the face," Kelleher said.
Swan Bitcoin Managing Director Terrence Yang also noted that he was surprised by the short deadline for Zhao. In his opinion, the authorities simply did not have enough evidence.
Sam Mangel, a consultant at the federal prison, added that the Binance founder will serve all the 120 days in prison without any leniency.
"He will serve his sentence in a high-security facility, and not in a prison camp with minimal security, which is provided for in similar cases. This is because Zhao is not a U.S. citizen. Although he will be uncomfortable, I believe that he will cope, " concluded Mangel.
Recall that as part of the agreement with the US Department of Justice, Zhao agreed to pay a fine of $50 million and resign as CEO of Binance.
He was replaced as CEO by Richard Teng, Head of Regional Markets.
During the hearing, U.S. District Judge Richard A. Jones denied the U.S. Department of Justice's request that Changpeng Zhao be jailed for three years. Reason: there was no evidence that the defendant was informed about illegal activities on the exchange.
Representatives of the Ministry of Justice insisted that a suspended sentence for Changpeng Zhao would also be the wrong decision, since "such a thing can encourage others to break the law and do it on the largest possible scale." The court agreed with the argument.
Speaking with the last word, Changpeng Zhao admitted that he could not properly build a decent customer verification system at Binance and establish anti-money laundering (KYC/AML) during his leadership.
******
The community and industry participants reacted strongly to the verdict of Binance founder Changpeng Zhao (CZ), according to which he will spend four months in prison.
CZ himself thanked everyone for their "care and support".
"I will serve out my sentence, complete this phase, and focus on the next chapter of my life (education). I will remain a passive investor in the crypto industry (and a hodler). The industry has entered a new era. Compliance is very important, " he wrote.
Former Binance chief Strategy Officer Patrick Hillman noted that he witnessed Zhao "reshape the entire executive team" in 2021 to prepare the company for global regulation.
"I believe that Judge Jones gave a fair verdict, given the seriousness of both CZ's mistakes and his attempts to correct them," Hillman said.
Prosecutors had called for a more severe sentence of 36 months in prison. During the hearing, CZ apologized and expressed his willingness to take full responsibility. Prior to that, he had expressed remorse for "bad decisions" in a letter to the judge.
Ki Yoon Joo, founder and CEO of CryptoQuant, an analytical company, admitted that the ex-CEO of Binance "advanced" the crypto industry, helping to create convenient products and making purchases in cryptocurrency more accessible and secure.
Partner of Kennyhertz Perry law firm and former US Federal Prosecutor Brayden Perry in a comment to The Block called Zhao's sentence an important precedent:
"In this case, the alleged crime and the fact that CZ committed a nonviolent offense for the first time forced the judge to analyze what other sentences were handed down to individuals in a similar situation. As noted by the defense, most, if not all, have not previously received a prison sentence."
However, some people were not enthusiastic about the situation. Better Markets CEO Dennis Kelleher called the verdict a " blatant miscarriage of justice."
He added that the judge was "cornered" because the Justice Ministry accused Zhao not of money laundering, but of creating poor infrastructure to combat money laundering.
"Despite the obscene and unfounded boasts of the Ministry of Justice at the press conference at which the charges were announced, the department did not even raise a claim against CZ for money laundering. He was accused only of the lack of an appropriate program. It's less than a slap in the face," Kelleher said.
Swan Bitcoin Managing Director Terrence Yang also noted that he was surprised by the short deadline for Zhao. In his opinion, the authorities simply did not have enough evidence.
Sam Mangel, a consultant at the federal prison, added that the Binance founder will serve all the 120 days in prison without any leniency.
"He will serve his sentence in a high-security facility, and not in a prison camp with minimal security, which is provided for in similar cases. This is because Zhao is not a U.S. citizen. Although he will be uncomfortable, I believe that he will cope, " concluded Mangel.
Recall that as part of the agreement with the US Department of Justice, Zhao agreed to pay a fine of $50 million and resign as CEO of Binance.
He was replaced as CEO by Richard Teng, Head of Regional Markets.
