Former Binance CEO, Changpeng “CZ” Zhao, is set to make an appearance before a federal judge after more than 160 days since pleading guilty to one felony count as part of a settlement agreement with United States authorities. On April 30, Judge Richard Jones will preside over the proceedings in the United States District Court for the Western District of Washington, marking a significant event in the crypto space following the conviction and sentencing of former FTX CEO, Sam Bankman-Fried. Although Zhao’s sentencing hearing has been delayed once, it is expected to take place by the end of the month.
In November 2023, Zhao pleaded guilty to one count for failing to maintain an effective Anti-Money Laundering (AML) program at Binance, thereby violating the Bank Secrecy Act. As part of the plea deal, he resigned as CEO and agreed to pay $4.3 billion to settle “civil regulatory enforcement actions” in the United States, excluding any lawsuit from the Securities and Exchange Commission (SEC).
Under US sentencing guidelines, Judge Jones has the discretion to sentence CZ to federal prison for up to 10 years. However, there is a recommended sentence of 12 to 18 months for the charge he is facing. Bankman-Fried received a 25-year sentence on March 28, but apart from both cases involving prominent figures in the crypto space, there are few similarities. Some speculate that due to Zhao’s guilty plea and cooperation with authorities, he may not face any prison time.
Moe Vela, a former Director of Administration for then-Vice President Joe Biden, stated that while the charges in these cases may not be comparable, the message from the Justice Department, SEC, and federal government is clear: they will not tolerate illicit behavior in the crypto space. Vela also suggested that despite potential harsh sentences, Zhao might receive leniency from the judge due to his cooperation and guilty plea.
Mark Bini, a former Assistant US Attorney, noted that CZ’s case felt more like a regulatory offense compared to Bankman-Fried’s criminal case. However, he highlighted the possibility of external factors, such as the recent Hamas attack on Israel, influencing the judge’s decision in Zhao’s sentencing. Reports linking crypto to the funding of terrorist organizations may be indirectly related to Zhao’s charge for failure to maintain an AML program and Binance’s civil case.
Since his guilty plea, Zhao has been allowed to travel within specific areas of the United States on a $175 million bond. His legal team has made multiple unsuccessful requests for him to visit family in the United Arab Emirates before the hearing.