Changpeng Zhao (CZ), the founder and former CEO of the world's largest cryptocurrency exchange Binance, was sentenced to 4 months in prison by the court on Tuesday, which was lower than the 36-month sentence sought by prosecutors and lower than the 36-month sentence Changpeng Zhao had agreed to in his plea agreement. The condition is that the sentence shall not exceed 18 months.

During the sentencing hearing, U.S. Judge Richard Jones immediately expressed doubts about the U.S. Department of Justice's request for a "prison sentence of up to three years." He told the court in Seattle that "there is no evidence that the defendant (Changpeng Zhao) was informed" about Binance's illegal activities, and went on to say that he disagreed with the U.S. Department of Justice's recommended base sentence guideline of 10 to 16 months. , increased to up to 3 years in prison.

As he began to read out the order, Judge Richard Jones told Changpeng Zhao:

This court finds that the defendant has accepted responsibility and everything I have seen about you and your characteristics is the essence of a lenient sentence.

A court document released after the hearing stated that the judge recommended that Zhao Changpeng serve his sentence at the Federal Detention Center in Seattle, but the final decision will be made by the Bureau of Prisons. The Office of Probation and Pretrial Services will determine a return date for Changpeng Zhao to surrender.

Zhao Changpeng, who had a shaved head and wore a navy blue suit and light blue tie, appeared in court accompanied by his mother, sister, nephew and son. Changpeng Zhao reached a plea deal last year and agreed to pay a $50 million fine, a fraction of his assets. Bloomberg reported on Monday that Changpeng Zhao may be worth about $43 billion to his name.

Before the judge sentenced him, Zhao Changpeng said:

I think this is the first step to fully admitting your mistakes and taking responsibility. Here, I failed to fully establish the "KYC real-name authentication" system. I also understand the importance of having a robust KYC and anti-money laundering program. This is why I directed Binance to cooperate with the U.S. investigation.

Changpeng Zhao pleaded guilty in November to violating the Bank Secrecy Act, a charge that typically carries a prison sentence of up to 10 years under past precedent. However, Zhao Changpeng pleaded guilty and cooperated with the investigation, so his sentence was reduced. A report from the court's probation office recommended just five months in prison.

The sentencing recommendations put forward by prosecutors and Changpeng Zhao's defense attorneys were completely different. The U.S. Department of Justice asked a federal judge to sentence Changpeng Zhao to 3 years in prison, which is twice the maximum 18-month sentence he agreed to in the plea agreement. On the other hand, Changpeng Zhao's defense Lawyers suggested he could get probation instead of jail time.

In contrast, Sam Bankman-Fried (SBF), the founder of failed cryptocurrency exchange FTX, was recently sentenced to 25 years in prison.

On the same day that Changpeng Zhao pleaded guilty last year, Binance also agreed to pay a $4.3 billion fine and let Zhao Changpeng step down as CEO.

On Tuesday before the sentencing, a prosecutor argued that the sentence recommended under Bank Secrecy Act guidelines was too lenient and argued that Binance’s size was reason why Changpeng Zhao should be locked up longer. He said:

If Changpeng Zhao deliberately and knowingly planned to violate U.S. law, build the world's largest cryptocurrency exchange, and become wealthy in the process, but no one would face jail time, the purpose of the Bank Secrecy Act would be reduced to nothing.

However, Changpeng Zhao’s defense lawyer argued that a prison sentence should not be imposed, citing a lack of precedent, and stated that no defendant had been sentenced to prison in similar cases, and the previous case in the United States against BitMEX founder Arthur Hayes was a precedent. Arthur Hayes was sentenced to 2 years probation at the time.

In addition, a defense lawyer said that Zhao Changpeng's cooperation with the US government has a good record and has even been recognized by the US Department of Justice.

Recommended reading >>> The plea agreement stipulated that "the sentence shall not exceed 18 months." Why did the US Department of Justice seek a 3-year sentence for Zhao Changpeng?

〈Zhao Changpeng does not need to be imprisoned for 3 years! The U.S. judge sentenced him to 4 months in lenient sentencing. This article was first published on Blockchain.