Following last year's high-priced settlement with the United States, Zhao Changpeng (hereinafter referred to as "CZ") has once again come to the forefront.
It was thought that after paying a fine of up to $4.3 billion and a bail of $175 million, CZ, who had turned around, had the freedom that could not be bought with money, but the tough attitude of the Department of Justice made the original sentence issue more complicated.
Previously, according to the plea agreement and federal guidelines, CZ might face a sentence of 12-18 months, and the US probation department recommended that CZ should be imprisoned for five months. However, with Arthur Hayes' previous record as a precedent, most industry insiders believe that home confinement will be the final result.
But now, according to court documents, federal prosecutors believe that the case involves a huge amount of money laundering, and CZ failed to implement an effective anti-money laundering program in Binance. Illegal actors use Binance's exchange in various ways, including operating a mixing service that hides the source and ownership of cryptocurrencies; trading illegal proceeds from ransomware attacks; and transferring darknet proceeds market transactions, exchange hacking attacks, and various Internet-related scams. CZ knew that Binance disregarded the law but still acquiesced in it, so he should be sentenced to three years in prison and fined $50 million. Prosecutors emphasized that CZ and Binance put American customers, the U.S. financial system, and U.S. national security at risk.
This decision is not groundless. The United States has always strictly controlled CZ and has always kept him in the United States, expressing a high degree of distrust in him. Not only does it require CZ to notify the pre-trial services department before traveling between states in the United States, he must also hand over his Canadian passport to a third-party custodian under the supervision of a lawyer, and hand in "all other valid and expired passports and travel documents." Without the permission of the court, he cannot apply for a new passport or travel document "from any country."
Coincidentally, on March 28, the SBF case also came to an end. U.S. District Judge Lewis A. Kaplan finally sentenced SBF to 25 years in prison and confiscated more than $11 billion in assets for seven counts of conspiracy to defraud and conspiracy to launder money on the FTX exchange.
The originally expected 110-year sentence was shortened to 25 years, while CZ, who made great contributions to the industry, fueled the FTX incident and maintained a cooperative attitude, had to be sentenced to a heavier sentence, which also caused dissatisfaction among many people in the industry, and some even called it bullying on the X platform.
Of course, no matter how the federal prosecutors appeal and suggest, they are actually the views of the plaintiffs of the US prosecutors. The sentencing only represents the upper limit. As the defendant, CZ will not surrender. The two sides are still in the game, and the final result is still pending the subsequent trial.CZ's defense lawyer bluntly stated that CZ should not be sentenced to prison, but should be sentenced to probation, arguing that he has assumed criminal responsibility and came to the United States from Dubai to stand trial, and CZ himself has not participated in money laundering, fraud and theft, and said that CZ intends to donate 90% to 99% of his wealth to charity. In addition, regarding the violation of US sanctions law, random, automatic transactions between US users and counterparties in sanctioned countries only account for a small part of Binance's total trading volume (0.00041%), so it is far-fetched to accuse CZ of doing it intentionally.
In the public trial documents, 161 letters of support written by CZ's relatives, friends, partners and Binance customers also caused heated discussions in the circle. The letters restored CZ from different identities and angles, all of which showed the core of hoping that the judge would be lenient.
Letter link: https://www.courtlistener.com/docket/68025988/81/2/united-states-v-zhao/
Among them, CZ's sister, former Morgan managing director Jessica Zhao, said that although her brother made mistakes, he worked hard to help others in his life. She mentioned that compared with FTX, CZ ensured that Binance never misused any customer funds. CZ's children, Rachel and Ryan, who are studying at a university in the United States, hope that the judge should not define Zhao Changpeng's personality only through this incident. Even his ex-wife Yang Weiqing highly praised CZ's care for his family and sense of social responsibility in the letter.
The most talked-about letter is undoubtedly the letter from He Yi, the co-founder of Binance and the mother of CZ's three children. In the letter, He Yi was emotional and sincere, saying, "If the cryptocurrency industry is compared to the Wild West, then CZ is the guardian of this wilderness. For CZ, whether he is poor or rich, he takes charity seriously and assumes social responsibility because he is kind and has a humanitarian spirit. " She emphasized that it was a sense of responsibility that made CZ choose to face the trial, but he should never be regarded as the same as those evil murderers, robbers, and fraudsters.
In addition to the emotional perspective, many professionals also put forward reasonable suggestions. For example, Robert Palmquist, former warden of Washington Prison, said in a letter that if CZ is sentenced to prison, he will most likely serve his sentence at FDC SeaTac. Palmquist served as the warden of the facility from 2003 to 2009. He described the prison as having insufficient natural light and being understaffed due to the limited number of prisoners. Palmquist said that if CZ is imprisoned, his huge wealth and status as a public figure will put his physical and mental health at risk, including but not limited to theft and extortion. It is reported that there are 794 prisoners in FDC Seatac.
Currently, the $50 million fine has been agreed upon by the prosecutors and CZ, but the sentence is still under discussion. The trial, originally scheduled for the end of February, was postponed to April 30 in the United States District Court for the Western District of Seattle after the two sides agreed at the hearing.
Looking at the whole incident, whether CZ is innocent or not, there are a thousand Hamlets for a thousand people. But it is indeed under the leadership of CZ that Binance can rise and become the world's largest exchange standing at the forefront, allowing Chinese people to add another strong and colorful stroke in the crypto world. During this period, Binance did run wild in the gray area, and when the industry volume gradually increased, this gray area gradually became transparent, and the naked swimming industry also surfaced. This is also the reason why the US SEC can continue to sue major crypto companies today. After all, it is difficult to say that companies that have come to the stage through the Wild West can be fully compliant, especially since the world has not yet proposed complete regulatory rules that are fully adapted to the crypto industry.
The problem between Binance and CZ this time, on the surface, violated the national security red line of the US authorities and violated the sanctions, but fundamentally it was also an alternative collision between the top power of the crypto exchange and national sovereignty as an absolute head exchange. Sooner or later, this conflict will break out. From this perspective, the final result of Binance and CZ is only a short prison sentence and a huge fine, which is indeed a blessing in disguise.
On the other hand, similar to any well-known figure, the evaluation of CZ personally is still mixed. As many people think he is the industry's guide and the pride of the Chinese, as many people think he is the industry's controller and blasphemer. But the 161 petitions at least show that CZ's character is still trusted by the industry.
From the current situation, the follow-up results are still relatively positive, and CZ himself does not seem to be panicked and is active on the X platform.
After leaving Binance, CZ devoted himself to the non-profit project Giggle Academy, which aims to provide free basic education for students from grades 1 to 12. The core concepts include non-profit purposes, gamified learning experience and adaptive education mechanisms. The project has formed a team of more than 10 people, and the Beta version is about to be launched, and the waiting list application has been opened to users. At present, the number of people following the project on the X platform has reached 66,000.
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