On April 30, 2024, in Seattle, the United States, the gavel fell in the sentencing case of Binance founder and former CEO CZ (CZ) . Judge Richard Jones sentenced CZ to four months in prison, overturning the previous proposal of the Department of Justice for a maximum of 36 months.
CZ’s trial is the second high-profile case this year as U.S. regulators crack down on criminal behavior in the crypto industry. In March, FTX exchange founder and CZ’s one-time business rival Sam Bankman-Fried was sentenced to 25 years in prison for fraud.
CZ, with a buzz cut and wearing a dark blue suit, accepted the sentencing in court accompanied by his mother, sister, nephew and son.
Richard Jones told the court he was "confident" CZ would not break the law again: "You are a family-focused man and a giving person." During Judge Jones' speech, CZ nodded vigorously and touched his heart with his hand.
However, some encryption critics were not satisfied with the trial results.
John Reed Stark, a former SEC official and cryptocurrency industry critic, said a brief jail term “is a small price to pay to become a lifelong billionaire” and that “the industry doesn’t care about the extraordinary cryptocurrency crime wave that has been unleashed by people like CZ.”
Dennis Kelleher, president and CEO of advocacy group Better Markets Inc., commented: “The Justice Department should prosecute dozens of people associated with Binance and not only prosecute and punish them, but also ban them from the financial industry forever. He should be subject to the strongest sanctions possible.”
Judge: No evidence Zhao was “informed” of Binance’s specific illegal activities
Judge Jones said there was no evidence that Zhao “had ever been informed” of Binance’s specific illegal activities, refuting a request by DOJ prosecutors to increase his sentence from 18 months to three years.
While the judge believes CZ is unlikely to reoffend, he hopes Zhao understands that despite "wealth, power and status," no one is immune from prosecution or above U.S. law.
CZ apologized in court and said he wanted to take responsibility for his "mistakes." He also said that Binance has implemented "know your customer" (KYC) and anti-money laundering programs and is cooperating with the government.
As part of a plea agreement with the government in November, CZ has paid a $50 million fine and resigned as Binance CEO. Binance also admitted to violating anti-money laundering and sanctions laws, agreed to pay a $4.3 billion fine and appoint an independent monitor to oversee the company's compliance .
“CZ will become the richest prisoner in the history of the United States”
The $50 million fine that CZ previously paid only accounted for a small portion of his personal net worth.
Bloomberg reported that CZ’s wealth surged by $25 billion as the crypto market recovered last year, and the Bloomberg Billionaires Index shows that he is currently ranked 38th among the world’s richest people.
The company’s total dominance in the cryptocurrency trading space currently stands at 41.6%, according to CCData, a 1.42% drop since CZ stepped down as CEO in November 2023, but Binance still maintains a leading position in both spot and derivatives markets.
The company said that in 2023, the number of new users will exceed 40 million, a 30% increase from the previous year, and the value of user assets held by Binance will exceed $100 billion. Bloomberg estimates that the company's annualized revenue in the 12 months ending in March may reach $9.8 billion.
As Binance’s business accelerates during crypto’s latest bull run, CZ’s wealth could grow even more, making him the richest U.S. prisoner ever.
According to court records, CZ is likely to serve his sentence at a detention center near Seattle-Tacoma International Airport. Although the detention center has a low security level, Sam Mangel, a U.S. prison consultant, told Bloomberg that CZ may see some friendly faces among his fellow inmates.
"He can't be blackmailed, he can't be threatened," Mangel said. "People who are very successful in a low-security prison tend to be respected."
Take off the "Wild West" hat
The crypto industry has become a focus of U.S. authorities after the 2022 market crash exposed fraud and misconduct across the industry.
As a leading exchange, Binance’s efforts to cope with the notorious “Wild West” crypto culture are still ongoing.
Earlier this year, Binance co-founder He Yi said on social media that Binance condemns so-called "rat trading," which is buying and selling intended to manipulate the market or for corrupt motives. The company will launch a bounty mechanism and blacklist any employees involved in improper trading. "If we confirm that a Binance team member has engaged in corruption, we will keep your identity confidential and reward you with a security vulnerability bounty of $10,000 to $5 million,"He Yi said.
“Binance is the largest exchange and has survived the failures of FTX, 3AC, Terraform Labs , etc. The U.S. government’s actions are seen as a huge overhang, and because they were able to survive, it gives people confidence in them,” said Austin Campbell, an adjunct professor at Columbia Business School and an advisor to blockchain companies.
However, the legal troubles did not end there. Last June, the U.S. Securities and Exchange Commission (SEC ) filed a lawsuit against Binance and its sister company Binance.US, accusing them of operating an unregistered exchange, broker-dealer, and clearing house, among other things. Many believe that the case will last for years as Binance fights the charges.
In addition, Roger Ver , an early Bitcoin investor known as "Bitcoin Jesus," was charged by the Department of Justice today with mail fraud, tax evasion and filing false tax returns, evading nearly $50 million in taxes. Roger Ver has been arrested in Spain and the US Department of Justice is seeking to extradite him to the United States for trial.
Author: BitpushNews Mary Liu
Twitter: https://twitter.com/BitpushNews
BitPush TG Exchange Group: https://t.me/BitPushCommunity
Bitpush TG subscription: https://t.me/bitpush
Btok subscription: https://btok360.com/bitpush
