Changpeng Zhao (CZ), co-founder and former CEO of crypto exchange Binance, remains out of prison despite being sentenced to four months on 30 April.
United States (US) District Judge Richard A. Jones sentenced CZ to serve his term at Seatac, an administrative security federal detention centre and prison in Western Washington, which houses 931 inmates.
According to Judge Jones' ruling, CZ is required to surrender for service of sentence upon notification from the Probation or Pretrial Services Office.
However, these offices have yet to notify him of the date he must report to the California prison.
What is Keeping CZ Out of Prison?
Federal law dictates the start of a criminal sentence. 18 U.S.C. § 3585(a) specifies it begins when the offender is "received in custody for transport to, or voluntarily arrives at, the official detention facility where the sentence will be served."
While the sentence can commence on the sentencing day itself, the path to prison can take a few interesting turns such as:
1) The judge might delegate custody to the US Marshals service. They would then escort the defendant or notify them of their prison reporting date.
2) The judge could empower the Probation or Pretrial Services Office to notify the defendant of their designated date for reporting to prison.
3) A judge may permit a defendant to voluntarily report to prison. This option is typically reserved for defendants with shorter sentences or a low risk of flight.
CZ received the second type of judgment.
Given his shorter sentence, US Marshals did not immediately take him into custody.
Instead, the judge granted him the second-most lenient option, allowing him to await notification from the Probation or Pretrial Services Office regarding his prison entry date.
Source: Federal Bureau of Prisons' Website states that CZ is still listed as 'not in BOP custody'
In addition, CZ took extensive measures to ensure his defence from the onset.
He enlisted a formidable team of seven attorneys from three prestigious law firms, Latham & Watkins, Quinn Emanuel Urquhart & Sullivan, and Davis Wright Tremaine, to advocate on his behalf.
These heavyweight lawyers are leveraging the fundamental principle of "due process," a constitutional safeguard designed to ensure a regular, fair, and lawful procedure.
This loophole could potentially be exploited by CZ's defenders to overturn the sentence.
At present, this strategic move appears to have granted him valuable time before incarceration.
Why Has the Office Not Notified CZ to Head to Seatac?
Currently, CZ remains free primarily due to procedural reasons.
As per legal requirements, the Bureau of Prisons must consider specific factors before assigning an individual to prison.
Failure by the Bureau to conduct this assessment could provide grounds for the criminal's lawyers to appeal to the court, citing due process violations, and potentially seek a reduced sentence.
The key factors include:
- The resources available at the facility in question
- The details and context of the offense committed
- The individual's personal history and distinctive characteristics
- Any directives or recommendations from the sentencing court regarding the type of facility deemed suitable
- Relevant policy statements issued by the US Sentencing Commission
In essence, CZ's delay in prison stems from the bedrock principle of due process enshrined in the US Constitution.
The Fifth Amendment ensures this safeguard for all individuals within the country's borders, irrespective of citizenship status.
With centuries of legal interpretation and application by the US judicial system, this fundamental right offers recourse to anyone facing deprivation of life, liberty, or property without lawful due process.
Consequently, CZ remains outside prison confines due to the pending analysis by the Probation or Pretrial Services Office.
Just a Matter of Time When CZ Finally Welcomes Prison
Ultimately, the situation appears to be at a temporary impasse.
On one front, authorities are conducting thorough assessments to ensure CZ eventual incarceration meets appropriate standards.
Meanwhile, his legal team is diligently exploring every legal avenue available.
This tug-of-war between staunch defence and procedural adherence intensifies daily within the crypto sphere.
CZ remains the focal point of this legal drama, albeit still at liberty.
His legal representatives deftly navigate the intricacies of the law, while the government demonstrates unwavering determination.
Should the Probation or Pretrial Services Office fail to adhere to due process, CZ's legal team could argue for a reduction in the duration of his sentence based on due process grounds.
Fallen Crypto King Sam Bankman-Fried Relocated to Oklahoma
Following a judge's decision to revoke his bail in August 2023, Sam Bankman-Fried (SBF), the former CEO of FTX, had been accommodated in New York.
After his sentencing hearing in March 2024, he expressed a preference to stay at the Metropolitan Detention Centre (MDC) in Brooklyn to ensure easier access to his appellate counsel.
However, as indicated by prison records, he has been relocated from New York or California, where his parents own a home, to Oklahoma.
Sam Bankman-Fried has been moved to Oklahoma City temporarily, according to the Bureau of Prisons record.
He requested to remain at MDC in Brooklyn in order to access appellate counsel.https://t.co/bnS0YyDgsz via @gregfarrel @avabmorrison pic.twitter.com/MYBWTaPYu4
— Yueqi Yang (@Yueqi_Yang) May 23, 2024
On 23 May, records from the Federal Bureau of Prisons revealed that SBF was situated at the Federal Transfer Centre in Oklahoma City.
This facility, as stated by the Office of the Inspector General for the US Department of Justice, detains inmates temporarily for transfers within the prison system.
SBF's move to Oklahoma, alongside reports from 22 May, hints at a possible transfer from the MDC in Brooklyn to the Federal Correctional Institution (FCI) in Mendota.
This relocation comes despite Judge Lewis Kaplan's recommendation for SBF to remain at MDC Brooklyn.
When contrasting CZ and SBF, it seems that the legal system favours CZ, providing him with protection and advantages.
Nevertheless, rather than engaging in blame games that could lead to lengthy incarcerations, it might be wiser to take responsibility and seek resolution.
Take a look at where SBF is now.