Too harsh or too lenient? Changpeng Zhao’s sentence divides opinion
While many in the crypto community have leapt to the billionaire’s defense, others claim four months is an “egregious miscarriage of justice.”
Let’s deal with the obvious irony first.
After years and years of dismissing FUD, fake news and attacks as “4”, Binance’s former CEO — Changpeng Zhao — was sentenced to four months behind bars.
All of this came after the billionaire pleaded guilty to charges of enabling money laundering at the world’s biggest crypto exchange.
It falls well short of the three years prosecutors had been hoping for after a lack of money laundering controls enabled tainted funds from Iran and Cuba to flow through Binance.
The judge opted for leniency after concluding that “everything” about his history and characteristics was of “a mitigating nature” — and at the sentencing hearing, referenced the sheer number of letters he had received from friends and family in CZ’s defense.
On X, large swathes of the crypto community had a positive reaction to the sentence:
Former colleagues praised the judge’s fairness:
Others called for the industry to show solidarity:
There was the occasional factoid about CZ’s looming incarceration:
And inevitably, one or two light-hearted posts acknowledging that Changpeng Zhao and Sam Bankman-Fried will soon both be behind bars:
Even though CZ’s sentence is barely a tenth of what was sought, the prosecution still insisted they were chalking this case down as a win. U.S. Attorney Tessa Gorman told reporters:
“This was an epic day. Incarceration was critical in this case and we’re pleased with the result.”
Tessa Gorman
Nonetheless, some of CZ’s critics believe the four-month sentence — which is set to take place in a low-security prison — amounts to nothing more than a slap on the wrist.
The billionaire has reportedly been eyeing up new investment opportunities in AI while awaiting his fate — and gave a hint to what the future holds when he emerges on the other side:
One former Binance employee, who left the company last year and wished to remain anonymous, told crypto.news that they believe the sentence was far too lenient.
When asked whether the verdict will have any negative ramifications for the crypto exchange CZ built, they added:
“I don’t think that any length of sentence will seriously affect Binance in any way. The exchange has proven to be resilient enough to withstands CZ’s arrest, so I see no reason why it won’t continue as it is.”
Ex-Binance employee, speaking to crypto.news
While Sam Bankman-Fried’s sentence had the deliberate intent of “disabling” him from operating a crypto business in the future, CZ’s punishment doesn’t have the same effect — as he could theoretically return as CEO in three years’ time. The former Binance employee added:
“CZ will definitely make a comeback after his sentencing. But not in America. He’s too arrogant to stay away from crypto for long, regardless of how long he ends up in jail.
Ex-Binance employee, speaking to crypto.news
David Gerard, a vocal crypto sceptic, told crypto.news that he believes Binance — and CZ — got off lightly:
“Financial shenanigans are one thing, but sanctions are national security. Binance messing around with sanctions was just foolish. I was surprised that Binance wasn’t shut down altogether, and only put under detailed compliance. This feels like a very lenient sentence. On the other hand, CZ may be the richest person ever to be sentenced to actual jail, so that’s a milestone.”
David Gerard, speaking to crypto.news
Others are downright furious. Better Markets, which aims to protect American consumers from future financial crashes, has accused the Justice Department of “committing fraud on the public” in how it handled the case.
The nonprofit’s co-founder and president, Dennis Kelleher, claims that the sentence sends a message that “crime pays” — and the billionaire strategy amounted to “asking for forgiveness once he was caught rather than asking for permission before he knowingly broke the law.” His combative statement added:
“That is an egregious miscarriage of justice and sends exactly the wrong message to criminals worldwide. As Binance’s founder, owner, and leader, CZ willfully, knowingly, and intentionally designed and ran Binance to be a crypto money laundering superstore for the most despicable global criminals.”
Dennis Kelleher
CZ could be out of prison and ready to move on by the end of the year.
At the height of his influence running Binance, the entrepreneur had often dismissed legitimate criticism of his business — retweeting “4” to anyone he disagreed with.
It’ll be interesting to see what lessons, if any, are learned after his time is served.
