Changpeng Zhao, better known as CZ, the man behind the crypto giant Binance, is in hot water. The U.S. Department of Justice has dropped a heavy recommendation. They want at least three years behind bars for Zhao. That’s right.
Last year, CZ copped to skirting the Bank Secrecy Act, leading to a massive $4.32 billion penalty for Binance and his resignation as CEO. Fast forward to now, and with his sentencing on the horizon this April 30, the DOJ isn’t only going after his freedom, but they’re also hitting him with a $50 million fine on the side.
A Sentence to Send a Message
This is a big deal, given that the typical max for this kind of breach is just 18 months. But here’s the DOJ pushing for double because, let’s face it, they think CZ’s actions were more than just a slip. They believe everything he did was deliberate and far-reaching. They’re trying to use the man as a scape goat.
On a brisk New York morning on April 24, Reuters shared the news. CZ should brace for 36 months in prison. After admitting to breaches that led to that massive penalty last year, the call for a stiffer sentence seems to be on solid ground.
“Given the extent of Zhao’s deliberate flouting of U.S. law, an extended sentence of 36 months is justified,” argued U.S. prosecutors in Washington.
Let’s not forget that Binance missed reporting over 100,000 shady transactions linked to some seriously bad groups like Hamas, al Qaeda, and ISIS. The platform was even implicated in the disturbing trade of child abuse materials and caught up in the dirty money of ransomware.
Aftermath and Implications
As for CZ? He agreed to fork over $50 million and step back from Binance, which he kick-started in 2017. The total financial hit to Binance? It’s staggering. A $1.81 billion criminal fine plus another $2.51 billion in restitution.
Meanwhile, He Yi, CZ’s co-founder at Binance, remains optimistic. Speaking at a meetup in Dubai, Yi was all about looking at the bright side, claiming that despite the racket, CZ’s current situation in the U.S. is as good as it could be under the circumstances.
Soon, CZ will face his day in court in the Western District of Washington, where he might get up to a decade in prison, although the guidelines suggest 12 to 18 months. Currently out on a $175 million bond with strict travel limits, CZ recently tried to jet off to Dubai — where he resides — citing a family health crisis.
His bid for travel didn’t sit well with the U.S. Attorney’s Office, leading them to try and snatch up his passports. As a dual citizen of Canada and the UAE, Zhao’s global ties only add another problem to this sprawling legal saga.
So here we are, watching as one of crypto’s biggest names faces a reckoning that could have some serious on the entire blockchain industry. But that’s just CZ. Always taking one for the team. Meanwhile, he still seems focused on his new venture, Giggle Academy.
Earlier today, he even shared a finalized logo for the school.
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