What’s next for Binance’s Changpeng “CZ” Zhao?
A recent court filing indicates that Changpeng “CZ” Zhao's legal challenges are just beginning, even though he pleaded guilty to violating US anti-money laundering standards in a plea deal with the Justice Department.
Zhao faces sentencing in February 2024. He is currently resisting government efforts to prevent him from returning to the United Arab Emirates (UAE) while awaiting sentencing with his family. However, in the filing filed on November 24, authorities indicated that he may face a harsher punishment than they initially expected:
“The defense says Mr. Zhao faces a “short” sentence and has no incentive to flee. But the reality is that the upper end of the guidelines could be 18 months, and the United States is free to argue for a maximum sentence of up to ten years under the law.
An extended sentence defies the consensus of jurists. According to an analysis from former Securities and Exchange Commission official John Reed Stark, Zhao could be sentenced to 12–18 months in a minimum security prison under US sentencing guidelines. The legal team, however, is not calling for prison time or alternative punishments, combining prison time with house arrest and probation.
Zhao's relevance to the crypto industry may influence its fate. Stark believes that this “plea agreement” could backfire on the DOJ if the DOJ does not secure a sentence for CZ that prohibits future money laundering activity in the cryptoverse (and elsewhere).
For the DOJ, seeking a long prison term for Zhao may not be as easy as it seems. According to Stark's analysis, government officials must provide more circumstantial evidence of their involvement in criminal activity. “Hopefully, the DOJ has something on their hands, or maybe Binance's monitoring and other regulatory requirements will reveal more serious and impeachable crimes,” he wrote on X (formerly Twitter).
Zhao was released on $175 million bond, 14 days before his scheduled February 24, 2024, return to the United States. In Stark's opinion, Judge Richard A. Jones is expected to consider the government's request. Nov. 27, with the possibility of strengthening bail requirements or delaying a decision using additional bond conditions.
The Binance-CZ case is causing controversy among legal and business experts. According to Omid Malekan, author and associate professor at Columbia Business School, the DOJ's approach to exchanges differs significantly from that seen in traditional finance.
“if so [banks] They were arrested by Binance Standard, hundreds of managing directors in prison and reduced money for shareholder buybacks (or lobbying). But the banks were smart enough to never question the game.
In the year On November 21, Zhao reached a $4.3 billion settlement with the U.S. government for allegedly allowing individuals engaged in illegal activities to transfer money through the currency. He stepped down as chief executive as part of the settlement.
Magazine: Deposit Risk: What do crypto exchanges do with your money?
