/cdn.vox-cdn.com/uploads/chorus_asset/file/25425462/247099_Changpeng_Zhao_CVirginia_A.jpg)
Binance founder Changpeng Zhao will find out today how much jail time he’ll serve for breaking US money laundering laws — if he serves any at all. Prosecutors have requested three years of prison time, double the sentencing guideline of 18 months, because the “scope and ramifications of Zhao’s misconduct were massive,” they wrote in their sentencing memo.
Zhao’s lawyers, in their own sentencing memo, said that Zhao deserved no jail time, as “no defendant in a remotely similar BSA [Bank Secrecy Act] case has ever been sentenced to incarceration.”
Zhao pleaded guilty and stepped down from Binance as part of a settlement with the US Department of Justice in November. Additionally, Binance agreed to pay $4.3 billion in fines. As part of the agreement, Zhao has waived the right to appeal any sentence up to 18 months in prison. He also agreed to pay a fine of $50 million, a drop in the bucket compared to his estimated $33 billion fortune.
According to the US government, Binance knowingly evaded anti-money laundering regulations. As a result, Iranian, Cuban, and Syrian customers were able to transact in violation of US sanctions. Settlements with the CFTC and SEC were announced at the same time as Zhao’s guilty plea.
I’m here in Seattle for the sentencing.
A relatively sedate morning in Seattle.
Unlike with the Sam Bankman-Fried trial, public interest in the sentencing of Binance founder Changpeng Zhao seems to be low. I did not spend hours standing in line this morning. And as far as I know, CZ is not yet in the building.
Prosecutors want to put Binance’s former CEO behind bars for three years.
In a filing on Tuesday, the DOJ says Changpeng Zhao’s alleged crimes “warrant meaningful prison time” and that the three-year term will “not just send a message to Zhao but also to the world.” Zhao’s lawyers followed up with a filing shortly after, saying he should just be sentenced to probation.
Binance founder Changpeng Zhao can’t leave the US while awaiting sentencing.
A judge ruled on Thursday that Zhao — who resides in the United Arab Emirates — must stay in the US ahead of his February 2024 trial, citing his “enormous wealth and property abroad” as well as a lack of ties to the US.
Zhao stepped down as CEO of Binance in November and pleaded guilty to breaking anti-money-laundering laws after a months-long investigation from the US government.
Binance’s CEO will have to stay in the US, for now.
Last week, Changpeng Zhao agreed to step down as CEO of the massive cryptocurrency exchange Binance — part of a plea deal with the DOJ for breaking anti-money-laundering laws.
However, one remaining disagreement has been where he will spend his time while awaiting sentencing for the felony charges. Despite agreeing to a $175 million bond, prosecutors consider him a flight risk and wanted to keep him in the US. That question isn’t fully answered, but Reuters reports a judge ruled CZ is staying the US for now while the court considers it, instead of being allowed to return to the UAE.
Binance criminal settlement includes $4 billion fine and CEO’s guilty plea
:format(webp)/cdn.vox-cdn.com/uploads/chorus_asset/file/23951272/STK018_VRG_Illo_N_Barclay_11_BINANCE.jpg)
Nick Barclay / The Verge
Changpeng “CZ” Zhao, the owner and CEO of the cryptocurrency exchange Binance, has agreed to step down and plead guilty to breaking anti-money-laundering laws, according to papers filed in a Seattle court on Tuesday. This comes as part of the major settlement the Department of Justice announced this afternoon, which will require Binance to fork over $4.3 billion in fines.
Zhao also agreed to pay $50 million, and sentencing will occur at a later date. “Today, I stepped down as CEO of Binance,” Zhao writes on X (formerly Twitter). “Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.”
Binance really loved telling people to use VPNs, allegedly
:format(webp)/cdn.vox-cdn.com/uploads/chorus_asset/file/23951278/STK018_VRG_Illo_N_Barclay_5_BINANCE.jpg)
Nick Barclay / The Verge
So I read through the CFTC complaint against the world’s largest cryptocurrency exchange, Binance, and it seems like the lawyers are having fun with this one. For instance: “Binance’s decision to prioritize commercial success over compliance with US law has been, as Lim paraphrased Zhao’s position on the matter, a ‘biz decision.’” I never get tired of reading these complaints.
Now to be clear, I don’t think Binance is the only entity ever to decide that skirting US law to acquire more customers — after all, US pharma companies have been making billion-dollar settlements over that exact same “biz decision.” But I do think explicitly writing that you are deliberately doing that is a real clown move. A government body can’t hold you accountable for conversations they can’t hear; they can, however, throw anything you put in writing back in your face. And mens rea matters — you can’t call something an oopsily doopsily mistakey-wakey if you’re also saying in a written record that it’s a business decision.