CZ(CZ), born in Lianyungang, Jiangsu in 1977, has a strong technical background and worked as a technical director at Bloomberg. He founded Binance in 2017. With his outstanding operations and innovative ideas, Binance has grown rapidly, and CZ has become a well-known figure in the cryptocurrency field.
As the cryptocurrency market boomed, regulatory issues gradually surfaced. The US government began an investigation into CZ's business activities, accusing him of failing to report all his income to the government and laundering money through virtual currency trading platforms. After that, regulators fined Binance $4.3 billion (including criminal charges and civil fines) and froze CZ's assets in the United States. CZ pleaded guilty to the charges of suspected money laundering and paid a fine of $50 million. He was then allowed to be released on bail of $175 million and was once allowed to return to the UAE during the bail period. But as the case developed, US courts repeatedly overturned previous decisions and banned CZ from traveling abroad.
In April 2024, the U.S. prosecutors formally filed criminal charges against CZ and recommended a 36-month prison sentence. The prosecutors pointed out that CZ's Binance platform had serious compliance issues, failed to report suspicious transactions related to terrorist organizations, and supported the sale of child sexual abuse materials and received ransomware ransoms. The prosecutors believed that these actions seriously violated the U.S. anti-money laundering regulations and must be severely punished.
CZ's criminal trial is scheduled for April 30, 2024 in the Seattle federal court. At that time, the court will make the final decision on CZ's fate. Regardless of the outcome, this incident will have a profound impact on the cryptocurrency industry and promote the industry's more standardized and transparent development. BlockBeats has compiled relevant information from the past into a timeline and published it as follows to help readers understand the relevant process of the CZ incident:
2024
May 1
CZ was eventually sentenced to 4 months in prison
CZ was eventually sentenced to four months in prison, but will not be detained immediately. CZ's legal team suggested that he could serve his sentence at the Federal Detention Center (FDC) in Seattle, Washington. It is reported that the warden of the FDC prison said that the prison has "lack of natural light" and is understaffed considering the number of prisoners. The specific date of CZ's sentence will be designated by the court, but it has not yet been decided.
The judge in the CZ case once again rejected the Department of Justice's previous proposal for a 36-month prison sentence. He personally read 161 letters of support because "it is important to know who CZ is". He has never seen so many letters of support, not only from family members, but also from people who have known CZ for a long time. These letters portray a person driven by passion and drive. CZ risked losing all his assets to make Binance a success.
The judge said that he had investigated the fact that CZ had taken significant and extraordinary measures to cooperate with law enforcement, and that everything he had seen about CZ and CZ's characteristics was of a mitigating nature. He believed that after this painful lesson, he believed that CZ was able and willing to reform. As the judge spoke, CZ was obviously feeling very uncomfortable. He leaned forward, listened attentively, and nodded occasionally.
CZ's mother, son and other relatives all came to the scene to support CZ
CZ's mother, son, nephew and sister all attended the defense. The defense lawyer said that CZ did not show evasive behavior like the criminals in other cases, but chose to face everything. According to reporters at the scene, CZ raised his eyebrows, frowned his forehead, and sometimes frowned.
The judge was annoyed by the leaked photos of the trial
It is worth noting that CZ’s lawyers repeatedly stated in their defense that the court should consider some secret “compelling factors” or “matters that are under seal.”
CZ's sentencing hearing has officially begun . CZ said that the first step to taking responsibility is to fully realize the mistakes.
The judge in the CZ case has taken his seat, and the sentencing hearing will begin at 9 a.m. PDT on Tuesday (0:00 a.m. Beijing time on May 1). CZ's lawyers requested probation on the grounds that CZ accepted responsibility "unflinchingly" and had already paid a $50 million criminal fine. They also said that CZ had never committed a crime before and that no defendant in similar cases had been imprisoned.
Photos of CZ entering court revealed
When entering the court, CZ wore a dark blue suit and a light blue tie. During the trial, CZ made a brief speech, his voice was low but clear. He said that the first step to taking responsibility is to fully recognize the mistakes, and Binance has recognized the importance of having a strong KYC/AML program.
April 29
The U.S. Probation Office recommended that CZ be sentenced to five months probation.
According to court documents, although the Justice Department requested a 36-month prison sentence and a $50 million fine for CZ. The probation office recommended a five-month suspended sentence in its statement report. At the same time, the defense requested house arrest and probation without jail time. Analyst Tama Kudman, partner of Kudman Trachten Aloe Posner LLP, said that the Justice Department's request for a longer sentence seemed to send a strong message. The U.S. Department of Justice has been working to combat money laundering through cryptocurrencies, and CZ's "violation of anti-money laundering rules is very blatant."
April 24
Full text of He Yizhi's letter to the US judge: What is a more authentic CZ like?
The case of Binance founder CZ will have a final result at the end of April. There are reports that CZ may be sentenced to 36 months in prison. Everything will have to wait until April 30th to be finalized. On Tuesday, US time, CZ submitted a letter to the judge in charge of the case, apologizing for his actions and believing that he should take full responsibility. In addition to CZ's letter, there are other letters of appeal from important figures such as family, friends, politicians, employees, etc., a total of 161 letters. Of course, He Yi, who knows CZ best.
According to CoinDesk, Binance founder and former CEO CZ apologized for his "wrong decision" and acknowledged "full responsibility" for his actions in a letter submitted to the judge in charge of the case on Tuesday.
In addition to CZ's letter, there were 161 letters of appeal from family, friends and others. Former U.S. Ambassador to China Max S. Baucus, Professor Jeremy R. Cooperstock, McGill University Professor, Associate Professor Ronghui Gu, Columbia University Professor, Morgan Stanley Managing Director Sean Yang, and members of the United Arab Emirates family also sent letters of support.
Lawyer rebuttal: CZ should be sentenced to probation instead of imprisonment
According to Coindesk, Binance founder CZ's lawyers countered in a document filed this afternoon that CZ should be sentenced to probation rather than imprisonment.
U.S. Justice Department lawyers seek 36 months in prison and a $50 million fine for CZ
In a sentencing memo filed late Tuesday by U.S. Justice Department lawyers, CZ should be sentenced to 36 months in prison and pay a $50 million fine after pleading guilty last November to violating the Bank Secrecy Act. (CoinDesk)
March 13
US court asks Binance founder CZ to hand over passport
The United States District Court for the Western District of Washington has modified the bail conditions of Binance founder CZ, requiring him to remain in the United States prior to sentencing and report to the Pre-Trial Services Department before any inland travel.
In addition, CZ must surrender his Canadian passport to a third party supervised by a lawyer and accompany him when traveling. He must also surrender all current and expired passports and travel documents and may not apply for or obtain a new passport or travel documents without the court's permission.
March 6
According to Blockworks, the relevant US authorities applied to modify the bail conditions for CZ, hoping that CZ and his defense team would disclose his travel plans because they were worried that he would go to the US-Canada border. The United States also required CZ to hand over his Canadian passport to a "third-party custodian hired and supervised by his lawyer of record."
The authorities also said that the initial bail conditions were based on the expectation that CZ would reside in the UAE, so they did not address issues such as how to keep his passport and provide notifications to pre-trial services regarding his travel plans and residence.
February 21
According to CoinGape, according to a motion for a protective order on February 20, considering the sensitive information in CZ's lawsuit, the US attorney applied for a protective order. The Department of Justice stated that the defendant CZ and the defense attorney did not object to the request for a protective order. According to US prosecutors, CZ admitted that he failed to maintain an effective anti-money laundering program. The evidence materials provided include sensitive witness interviews, third-party financial records, and third-party internal business records.
The Justice Department included a proposed order in the motion that would restrict public access to any information. "The proposed protective order will not be disseminated or distributed to anyone other than defense counsel, members of the defense team, and the defendant," the document reads.
January 25
According to CNBC, a new criminal court document shows that Binance founder CZ once proposed to use $4.5 billion of Binance shares as a guarantee for returning to the United States after leaving, but was rejected by the judge. In a letter to Judge Richard Jones on December 22 last year, CZ's lawyer stated that the valuation of CZ's shares was based on Binance's last round of financing two years ago.
A federal judge previously denied CZ's request in December 2023 to travel to the United Arab Emirates to handle hospitalization and surgery for an important person in his life.
December 2023 and before
US court again rejects CZ's request for travel permit
On December 30, according to The Block, the U.S. District Court for the Western District of Washington in Seattle again rejected CZ’s “travel permit request” on Friday.
Judge to hold telephone hearing on CZ's application for travel permission
On December 29, CoinDesk reporter @nikhileshde posted that the judge had scheduled a telephone hearing for 2 a.m. on December 30 regarding CZ’s pursuit of travel permission from the federal court overseeing his case and the sealing of his application.
CZ is asking the federal court overseeing his case for permission to travel
On December 28, CoinDesk reporter @nikhileshde tweeted that Binance founder CZ is requesting travel permission from the federal court overseeing his case.
US District Judge Accepts Guilty Plea of Former Binance CEO CZ
On December 7, The Block reported that documents from the U.S. District Court for the Western District of Seattle showed that Judge Richard Jones had accepted the guilty plea of former Binance CEO CZ. CZ pleaded guilty to charges of anti-money laundering and sanctions violations, a case that came to a conclusion after several years of investigation by federal regulators. Binance agreed to pay $4.3 billion, one of the largest corporate settlements in history. CZ has agreed to pay a $50 million fine and resign as CEO.
WSJ: US judge temporarily bans CZ from leaving the US
On November 28, the Wall Street Journal reported that a federal judge in the United States temporarily banned Binance founder CZ from leaving the United States. The judge still needs to decide whether to require CZ to remain in the United States to await a verdict for violating anti-money laundering requirements. The verdict is scheduled for the end of February.
On November 24, John Reed Stark, former director of the U.S. Securities and Exchange Commission (SEC) Office of Internet Enforcement, posted on social media that according to court documents, Binance founder CZ argued that he should be allowed to return to the UAE before sentencing, and CZ planned to fight for "no jail time" (or choose a few months in prison plus a few months of home detention).
CZ's sentencing hearing is scheduled for February 2024
On November 22, CoinDesk reported that Binance founder and former CEO CZ has been released on a $175 million personal bond. The sentencing hearing is scheduled for 9:00 a.m. Pacific Time on February 23, 2024 (1:00 a.m. Beijing Time on February 24).
Market News: CZ's personal bail is $175 million
On November 22, according to market news, CZ's personal bail was $175 million. Previously, Binance founder CZ had appeared in the Seattle court. CZ faces up to 10 years in prison, but according to the plea agreement, the sentence is expected to be no more than 18 months. The US Department of Justice has not yet made a final decision on the length of his imprisonment. The defense lawyer stated in court that the sentencing will be postponed for 6 months.
Binance founder CZ steps down as CEO, Richard Teng takes over
On November 22, Binance founder CZ announced his resignation as CEO. CZ said that although this decision was emotionally difficult, he had to take responsibility for past mistakes for the sake of the community, Binance and his own interests. The new CEO will be replaced by Richard Teng, the company's former global regional market head.
On November 22, Bloomberg reported, citing people familiar with the matter, that regulators will impose a $4.3 billion fine on Binance (including criminal charges and civil charges), and Binance will continue to retain its ability to operate. In addition, founder CZ agreed to resign and plead guilty, and will not be allowed to hold an executive position at Binance, but he will still retain a majority stake in Binance and will appear in person in the Seattle Federal Court on Tuesday afternoon to file a defense.
On November 21, Bloomberg reported, citing people familiar with the matter, that the U.S. Department of Justice is seeking a fine of more than $4 billion from Binance as part of a proposed solution to its years-long investigation.
Binance and its founder CZ ask US judge to dismiss CFTC lawsuit
On July 28, Bloomberg reported that cryptocurrency trading platform operator Binance Holdings Ltd. and its co-founder CZ asked a U.S. federal judge to dismiss a lawsuit filed by the Commodity Futures Trading Commission.
“In this case, the CFTC seeks to regulate foreign individuals and companies residing and operating outside the United States,” lawyers for Binance and CZ said in a motion to dismiss filed Thursday with a Chicago court. “This exceeds the limits of its statutory authority and tramples on deep-rooted principles of comity with foreign sovereign nations.”
Binance and its CEO CZ are sued by the US CFTC for regulatory violations
On March 27, Bloomberg reported that the crypto trading platform Binance and its CEO CZ were sued by the U.S. Commodity Futures Trading Commission (CFTC) for alleged violations of trading and derivatives rules.
The CFTC filed the lawsuit in federal court in Chicago on Monday. The derivatives regulator said Binance evaded its obligations by not registering properly. The CFTC has been investigating Binance since at least 2021 for failing to prevent U.S. residents from buying and selling cryptocurrency derivatives. CFTC rules generally require platforms to register with the agency when allowing Americans to trade these products.
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