4 months in prison for Binance founder CZ

At the end of last year, the US Department of Justice indicted Binance founder Changpeng "CZ" Zhao on charges including violations of the US Anti-Money Laundering Act. CZ had already pleaded guilty. In addition to a fine of 50 million US dollars, which the Chinese native has already paid, the US Attorney's Office demanded an increase in the prison sentence to 36 months a week ago, while CZ's defense lawyers only proposed a suspended sentence (optionally with house arrest).

Today, a court in Seattle sentenced the founder of the world's largest crypto exchange to four months in prison for money laundering and supporting terrorist groups and other criminal activities. CoinDesk reporter @nikhileshde followed the hearing and reported back.

At today's final hearing, the judge in charge, Richard Jones, was very skeptical of the lawyers from the Ministry of Justice. They had once again tried to convince the judge to increase the prison sentence. CZ had known about the illegal activities and had acted deliberately, argued the lawyers for the Department of Justice. CZ himself had stated that he was "asking for forgiveness, not permission". It was only after Binance was caught that CZ cooperated fully, which would not justify a suspended sentence. In the opinion of the Ministry of Justice, a suspended sentence would also have no deterrent effect on potential imitators, so that only a prison sentence that reflects the extent of the offense would be appropriate.

CZ's defense lawyers particularly emphasized CZ's cooperation, which was "well documented". Zhao had come to the USA voluntarily instead of staying in the United Arab Emirates. According to the defense, all factors would speak for a lenient sentence. Finally, Zhao once again personally emphasized that he had made mistakes, particularly in the anti-money laundering precautions of his crypto-exchange.

In his sentencing, the judge acknowledged some mitigating circumstances, such as the cooperation with law enforcement authorities. Nevertheless, Zhao had failed to adequately combat money laundering on Binance, which supported drug trafficking on the darknet and terrorism, among other things. Zhao had shown great commitment and deliberately risked a lot to make Binance the largest exchange in the world. In doing so, however, he missed the opportunity to comply with US regulations, the judge said at the sentencing.

For these reasons, the judge ultimately rejected probation and imposed a prison sentence of four months. Although even the Department of Justice did not want to make the comparison with former FTX CEO Sam Bankman-Fried, today's verdict means that another founder of one of the largest and most influential crypto exchanges in the world will now have to go to a US prison. It has not yet been announced when CZ will start his prison sentence.

The fact that it's just four months makes the crypto community smile. The four has played a major role for CZ in the past. Whenever there was supposed FUD (fear, uncertainty and doubt) in the crypto market or around Binance, the former Binance CEO referred to this number. CZ made the connection in a tweet at the beginning of 2023.

The fine that Binance had to pay at the end of 2023 was also around 4 billion US dollars. These coincidences provide enough material for memes on 𝕏.