Changpeng Zhao, also known as CZ, founder and former CEO of Binance, one of the largest cryptocurrency exchanges, awaits sentencing in a highly anticipated Seattle court hearing set to begin Tuesday.
In November, Zhao pleaded guilty to enable money laundering on the Binance platform, marking a significant development in a case that has attracted attention due to the alleged violations of US law and the implications for the cryptocurrency industry.
Former prosecutors weigh in on sentencing
Like before reported According to Bitcoinist, prosecutors filed a sentencing memorandum requesting that Zhao be sentenced to three years in prison, double the upper limit of the recommended guidelines. They say his crimes violated U.S. law on an unprecedented scale.
In contrast, Zhao’s defense team requested a more lenient probation sentence of five months. They highlight Zhao’s acceptance of responsibility, his history of philanthropy and community service, and the considerable time he has already spent away from his family since pleading guilty.
Legal experts have offered differing opinions on the likely outcome of the conviction. Neama Rahmani, former federal prosecutor, said CNBC that he expects a sentence of one to two years, given the high-profile nature of the case.
Braden Perry, former senior counsel for the Commodity Futures Trading Commission (CFTC), suggests an advisory range of 10 to 16 months per sentence, but believes Zhao’s guilty plea and settlement with multiple agencies could influence the judge’s decision.
Yesha Yadav, a law professor at Vanderbilt University, predicts a sentence in the low single digits, potentially including minimal prison time and extended probation.
Other legal experts, such as corporate lawyer Tre Lovell, predict a shorter sentence of five to seven months, citing the lack of fraud charges against Zhao and his apology letter to the judge.
Paul Tuchmann, a former federal and state prosecutor, emphasizes the need for general deterrence in the crypto industry and expects the DOJ to argue for a sentence that expresses the consequences of the violation. financial rules.
Prison time is an important deterrent, said David Weinstein, a former federal and state prosecutor who now practices corporate compliance and white-collar defense at Jones Walker. He added that the sentence would end in less than a year.
The Binance Money Laundering Case
Prosecutors say Zhao operated Binance according to a “Wild West” model, demonstrating “willful disregard” for the exchange. legal responsibilities.
Zhao’s plea agreement with the Department of Justice (DOJ) required him to admit his involvement in facilitating money laundering activities on Binance. As part of the deal, he agreed to resign as CEO, leading to the appointment of Richard Teng as the new CEO of the exchange.
In addition to his guilty plea, Zhao agreed to pay a $50 million fine. Binance was ordered to pay $4.3 billion in fines and forfeiture for violations of the U.S. Bank Secrecy Act and Iran sanctions.
The case involved a joint effort by the DOJ, the Commodity Futures Trading Commission, and the Treasury Department. The Securities and Exchange Commission (SEC) filed a separate suit against Binance. It remains to be seen what the outcome will be for CZ and what other implications could be for the exchange.
As the market experiences a sharp correction, the exchange’s native token, Binance Coin (BNB), is trading at $565, down almost 4% in the last 24 hours alone and more than 6% in the past 24 hours. of the previous 7 days.
Featured image from NBC, chart from TradingView.com
