As a researcher with experience in the cryptocurrency industry, I’m deeply concerned about the recent sentencing of Changpeng Zhao (CZ), the founder and former CEO of Binance, to 4 months in prison. While it’s important to acknowledge that CZ pleaded guilty to violating know-your-customer and anti-money laundering requirements at his exchange, I believe that the context of his actions should be considered in full.
At a court hearing in Seattle on Tuesday, a judge ordered Changpeng Zhao, also known as “CZ,” the founder and ex-CEO of cryptocurrency exchange Binance, to serve a four-month prison term.
- The sentencing follows CZ’s guilty plea to running afoul of know-your-customer and anti-money laundering requirements at his exchange in November.
- During the hearing, Judge Richard Jones acknowledged tht CZ had “accepted responsibility” for his actions, and that his actions at Binance were of a “mitigating nature.”
- “There’s no evidence that the defendant was ever informed [of illegal activity at Binance]” the judge said, as reported by journalist Nikhilesh De.
- Jones was immediately skeptical of the Department of Justice (DOJ), for arguing that CZ should be sentenced to three years – twice the recommended sentencing guideline for similar crimes.
- The DOJ argued that the punishment should fit the magnitude of CZ’s crime, claiming the Bank Secrecy Act would “for intents and purposes be a dead letter,” if CZ did not receive meaningful time in prison.
- By contrast, CZ’s defense argued for no prison time at all, citing the United States’ previous case against BitMEX co-founder Arthur Hayes, who instead received two months probation.
- Binance has already agreed to pay a $4 billion fine, while CZ paid a $50 million fine as part of a plea deal last year. Some estimates suggest that the crypto mogul still has $43 billion to his name.
- “I recognize the importance of having a robust KYC/[anti-money-laundering] program,” said CZ in court on Tuesday. “That is why I directed Binance to cooperate with the U.S.’s investigation.”
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2024-04-30 22:50