Binance Founder Changpeng Zhao’s Sentencing Pushed to April

Changpeng Zhao's sentencing has been delayed to late April, as per CNBC, citing a rescheduled hearing notice filed in a Seattle Federal Court.
changpeng zhao

The judicial proceedings concerning Changpeng Zhao (CZ), the co-founder of the digital asset exchange, Binance, have encountered a delay, with the sentencing now slated for late April, as reported by CNBC.

The former Binance chief executive pleaded guilty to money laundering violations in November 2023, and also stepped down as the CEO of the firm he founded in July 2017. 

When CZ pleaded guilty, Treasury Secretary Janet Yellen stated on the matter:   

“Binance was allowing illicit actors to transact freely, supporting activities from child sexual abuse, to illegal narcotics, to terrorism, across more than 100,000 transactions. That includes transactions associated with terrorist groups like Hamas’s Al-Qassam Brigades, Palestinian Islamic Jihad, Al Qaeda, and ISIS.”

Facing 18 Months

The CNBC report said that the sentencing will now take place on April 30, while citing a “notice of rescheduled hearing” that was filed in a Seattle Federal Court on February 12. It is important to note that Zhao, popularly known as CZ in the digital asset space, was scheduled to appear in court for sentencing on February 23. 

Notably, the former Binance executive faces close to 18 months behind bars, but there are chances that the prosecutor will aim for a tenure as long as 10 years.

A filing from November 2023 read:

“The reality is that the top-end of the Guidelines range may be as high as 18 months, and the United States is free to argue for any sentence up to the statutory maximum of ten years.”

However, former United States Securities and Exchange Commission (SEC) official John Reed Stark believes that it is unlikely that Zhao will face a longer term behind bars. Stark believes that the Binance founder will face between 12 and 18 months of jail time at a minimum security prison under United States sentencing guidelines.

Changpeng Zhao Not Allowed to Leave the US

Initially, Zhao was allowed to leave the US after he paid a $175 million bail bond, which was secured by $15 million in cash. However, the prosecutors argued that CZ was a flight risk since he has the citizenship of the UAE. As a result, Judge Richard Jones in Seattle ordered Zhao to remain in the US

CZ’s guilty plea was part of the settlement with the Department of Justice (DoJ) as Richard Teng took over the operations of Binance. The firm paid $4.3 billion in total, with the DoJ getting $2.018 billion from Binance and $50 million from Zhao, while the Treasury’s Financial Crimes Enforcement Network (FinCEN) received $780 million from the exchange. 

“I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself,” said Zhao while announcing his resignation from the exchange on social media platform X.

In a parallel development, the SEC has trained its investigatory lens on Binance for orchestrating a fraudulent scheme like FTX, the exchange founded by Sam Bankman-Fried (SBF). The agency believes that Binance had control of funds that belonged to the customers of its U.S. entity, Binance.US. 

The regulatory body asserts that the platform redirected customer assets at its own discretion, channeling funds to Sigma Chain, a Switzerland-based entity supervised by Zhao.

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