A
contrite
Changpeng
“CZ”
Zhao
has
been
sentenced
to
four
months
in
federal
prison,
for
his
apparently
limited
role
in
the
illegal
activity
at
Binance,
the
crypto
exchange
he
founded
in
2017.
U.S.
District
Judge
Richard
Jones
in
Seattle
specifically
noted
CZ’s
many
contributions
to
charity,
as
well
as
willingness
to
accept
responsibility,
all
while
downplaying
the
idea
CZ
had
any
foreknowledge
that
Binance
was
intentionally
committing
crimes.
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is
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The
sentence
is
more
than
CZ’s
lawyers
had
asked
for
(they
were
bargaining
for
house
arrest
at
most),
but
less
than
both
the
official
sentencing
guidelines
(around
one
year)
and
what
U.S.
Department
of
Justice
prosecutors
sought
(36
months).
We
don’t
know
exactly
why
CZ
received
the
sentence
he
did.
But
it’s
notable
that,
instead
of
fighting
extradition,
CZ
willingly
came
to
the
U.S.
to
stand
trial.
The
outcome
is
the
latest
signal
that
if
caught
doing
a
crime,
cooperate,
cooperate,
cooperate.
This
is
the
plain
and
simple
understanding
drawn
from
comparing
CZ
to
Sam
Bankman-Fried,
the
founder
and
fraudster
behind
rival
exchange
FTX,
who,
in
March,
was
sentenced
to
25
years
in
prison,
and
never
really
admitted
to
his
multi-billion
dollar
theft
of
client
funds.
CZ,
of
course,
wasn’t
accused
of
stealing
from
customers,
but
instead
of
failing
to
implement
the
necessary
compliance
infrastructure
expected
of
a
money
transmitter.
For
a
prehistoric,
i.e.
pre-crypto,
comparison:
20
years
ago,
Martha
Stewart
showed
no
remorse
after
being
convicted
of
conspiracy
and
obstruction
of
justice,
maintaining
her
innocence
and
even
comparing
herself
to
Nelson
Mandela.
She
served
five
months
in
prison
–
a
month
more
than
CZ
will.
It’s
also
worth
noting
that
in
addition
to
Zhao’s
prison
sentence
to
be
served
in
Washington
State,
he
paid
a
$50
million
fine
alongside
the
gargantuan
$4.3
billion
settlement
agreement
Binance
paid.
Dennis
Kelleher,
co-founder
of
Better
Markets,
a
public
service
nonprofit,
says
the
relatively
short
sentence
proves
that
“crime
pays.”
Zhao
will
be
able
to
keep
his
ownership
stake
in
Binance,
the
world’s
largest
crypto
exchange
by
volume
and
vast
personal
wealth.
DOJ
attorney
Kevin
Mosley
echoed
this
point:
“Breaking
U.S.
law
was
not
incidental
to
his
plan
to
make
as
much
money
as
possible.
Violating
the
law
was
integral
to
that
endeavor.”
CZ,
the
family
man
Whether
or
not
you
see
the
punishment
as
fitting
the
crime,
Zhao’s
appearance
in
court
was
revealing.
Despite
his
influence,
Zhao
has
lived
a
largely
private
life.
I,
for
one,
was
unaware
the
former
executive
had
a
college-age
son,
who
sat
beside
Zhao’s
mother
and
nephew
during
his
sentencing
hearing.
Dozens
of
letters
written
in
support
of
Zhao’s
character
described
him
as
a
“family
man.”
Zhao’s
testimony
at
several
points
during
the
case
emphasized
his
guilt
over
his
actions
(and
inactions)
and
his
willingness
to
take
responsibility
for
mistakes
made
while
he
led
Binance.
In
contrast,
as
the
judge
overseeing
SBF’s
case
noted,
SBF
never
offered
“a
word
of
remorse
for
commission
of
terrible
crimes.”
It’s
worth
noting
CZ
wasn’t
alone
in
complying
with
the
U.S.
government,
but
Binance
itself
also
bent
the
knee.
Once
an
entity
that
bragged
about
not
having
a
home
base,
Binance
has
agreed
to
admit
an
“independent
compliance
monitor”
to
oversee
the
transactions
that
happen
on
the
platform
for
the
next
three
years.
That
could
be
invaluable
data
for
government
agencies
looking
to
track
down
criminals
leveraging
blockchains.
Given
that
states
like
Venezuela,
Iran
and
North
Korea
have
all
turned
toward
crypto
as
a
means
of
funding,
this
information
could
even
be,
as
The
Verge’s
Liz
Lapatto
points
out,
“geopolitically
significant.”
Who
knows.
What’s
clear,
at
this
stage,
is
it
pays
to
cooperate.
