Former Binance CEO Changpeng Zhao, commonly known as “CZ,” is set to appear before a federal judge, over 160 days after he admitted guilt to a felony charge under a plea agreement with U.S. authorities.
On April 30, United States District Court for the Western District of Washington, under Judge Richard Jones, will conduct a hearing involving statements from both the prosecution and CZ’s defense team. This session ranks among the most closely watched legal events in the cryptocurrency industry following the conviction and sentencing of ex-FTX CEO Sam Bankman-Fried.
Although Zhao’s sentencing was previously postponed, it is scheduled to proceed by the end of the month according to the latest report.
Former Binance CEO Could Get Up To 10 Years In Federal Prison
In November 2023, Zhao admitted guilty to a single charge of failing to maintain an effective Anti-Money Laundering (AML) program at Binance, thereby breaching the Bank Secrecy Act. As part of the plea agreement, he stepped down from his role as CEO, and together with the cryptocurrency exchange, agreed to a $4.3 billion settlement to resolve civil regulatory enforcement actions in the United States, excluding any legal action by the Securities and Exchange Commission (SEC).
According to U.S. sentencing guidelines, Judge Jones has the authority to sentence Zhao to a maximum of 10 years in federal prison, although the guideline range for his offense is 12 to 18 months. In comparison, Bankman-Fried was sentenced to 25 years on March 28 under different circumstances, despite both individuals being prominent figures in the cryptocurrency sector. Observers have noted that Zhao’s cooperative stance and guilty plea might allow him to avoid prison time altogether.
Moe Vela, a former Director of Administration for then-Vice President Joe Biden, explained that while the charges in these cases differ, they are alike in demonstrating the U.S. Justice Department, SEC, and federal government’s commitment to not tolerating wrongful acts. Vela suggested that U.S. officials might be attempting to deter criminal activities within the cryptocurrency field, and speculated that Zhao might receive leniency from the judge due to his cooperation and acknowledgment of wrongdoing.
Terrorism Surrounding Hamas Could Affect Former Binance CEO Sentencing
Mark Bini, a former Assistant U.S. Attorney from the Eastern District of New York, informed that CZ’s legal issues appeared more regulatory in nature compared to the criminal case against Bankman-Fried. However, Bini noted that the recent Hamas attack on Israel could potentially sway the sentencing judge in CZ’s case.
Following the attack by Hamas, numerous reports have linked cryptocurrency to the financing of terrorist groups. These reports may be indirectly connected to the charges faced by the ex-Binance CEO, including his failure to establish an adequate anti-money laundering (AML) program, alongside the civil lawsuit against the exchange.
Bini pointed out that public perception and government stance might converge due to allegations against Binance for laundering funds linked to Hamas. This perspective could be used to demonstrate the severe implications of what might otherwise seem like a mere regulatory violation, possibly influencing the prosecution’s arguments for harsher penalties.
Bini also mentioned that the gravity of the facts could lead the judge to consider a more severe sentence for CZ. Since his guilty plea, Zhao has been largely allowed to travel within certain U.S. regions on a $175 million bond, although requests for him to visit family in the United Arab Emirates before his hearing have been consistently denied by the judge.
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