Former Binance CEO Changpeng “CZ” Zhao is set to appear before a federal judge after waiting more than 160 days since pleading guilty to a felony count as part of a settlement with US authorities. The hearing, scheduled for April 30 in the United States District Court for the Western District of Washington, is expected to be a significant event in the crypto space, similar to the conviction of former FTX CEO Sam Bankman-Fried. Although Zhao’s sentencing hearing has been delayed once, it is anticipated to take place by the end of the month.
In November 2023, Zhao pleaded guilty to a count of failure to maintain an effective Anti-Money Laundering (AML) program while at Binance, which violated the Bank Secrecy Act. As part of his plea deal, he resigned as CEO, and Binance agreed to pay $4.3 billion to settle “civil regulatory enforcement actions” in the US, excluding a lawsuit from the Securities and Exchange Commission (SEC).
While Judge Jones could potentially sentence Zhao to up to 10 years in federal prison under US sentencing guidelines, the recommended sentence for the charge he is facing is 12 to 18 months. It has been suggested that due to his guilty plea and cooperation with authorities, Zhao may not receive any prison time.
Moe Vela, a former Director of Administration for then-Vice President Joe Biden, believes that both Zhao’s and Bankman-Fried’s cases demonstrate the US government’s intolerance for illicit behavior in the crypto space. He suggests that the authorities may be trying to send a message to illicit players, regardless of the sentence imposed on Zhao. However, Vela speculates that the former Binance CEO could receive leniency from the judge due to his cooperation and guilty plea.
Mark Bini, a former Assistant US Attorney, notes that unlike Bankman-Fried’s case, Zhao’s case feels more like a regulatory offense. However, he points out that recent allegations linking crypto to funding terrorist organizations, particularly in light of the Hamas attack, could potentially influence the judge’s decision. Bini suggests that prosecutors may argue that such real-world consequences should be taken into account during sentencing.
Since pleading guilty, Zhao has been able to travel within certain parts of the US on a $175 million bond. However, his requests to travel to the United Arab Emirates to visit family before the hearing have been denied by the judge. Enforcement agencies in the US are intensifying their efforts to combat crypto-related crime.
Anticipating the Outcomes of Changpeng Zhao's Sentencing on April 30