Full transcript of Zhao Changpeng's hearing: The court disagreed with the DOJ's appeal and ultimately sentenced only four months in prison

##Main source:

https://twitter.com/nikhileshde/status/1785353891871383864

https://www.theverge.com/2024/4/30/24144807/binance-founders-sentencing-hearing-liveblog

CZ was eventually sentenced to four months in prison. Far less than the 36 months required by the Justice Department.

Full hearing:

CZ arrived at the court early and was taking his seat with his legal team. CZ was wearing a dark blue suit and light blue tie and looked nervous. But due to the judge's personal matters, the hearing was postponed to 9:30AM PT / 12:30PM ET.

The first piece of breaking news: Judge Jones said he disagreed with the Department of Justice’s request to extend the sentence. Judge Richard Jones said he disagreed with the Department of Justice's request to strengthen sentencing guidelines and extend the sentence from 18 months to three years, saying there was no evidence the defendant (CZ) had been informed of the illegal activity.

Justice Department lawyers argued that the judge should be able to infer that CZ knew of the illegal activity, citing a previous case in which the judge inferred that the defendant knew of the illegal activity.

Judge Jones said he generally agreed with the probation office. The total level is 12, which results in 10-16 months in prison and 1-3 years of residential surveillance. Opinions from the Ministry of Justice, the defense and CZ will now be heard before a final verdict.
The judge clearly rejected the Ministry of Justice’s request for a longer sentence. Justice Department lawyers said CZ deliberately tried to tap into the U.S. financial system. He said: "Breaking the law is at the core of his efforts. We are not speculating here. Mr. Zhao has said so himself - ask for forgiveness, not permission."

DOJ attorneys say CZ should be commended for taking the initiative to surrender , but this was reflected in the plea agreement. “If Mr. Zhao doesn’t have to face prison time after knowingly and knowingly planning to violate U.S. law in order to build the world’s largest cryptocurrency exchange and get rich in the process… then no one should face prison time "We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster," DOJ attorneys said, adding that their advice It's not about CZ.

DOJ lawyer said: "Mr. Zhao and Binance did encourage increased compliance, but this was after Binance was discovered... This is what they should have done... While it is commendable, this is here "A suspended sentence here will incentivize others to break the law, and to do so on the largest possible scale."

Judge: Your recommendation is double the sentencing guidelines; this is. Will it lead to unfair judgment? DOJ: No single defendant bears such heavy responsibility; "We do not believe this constitutes an unfair sentence...the injustice lies in the severity of the conduct." Strong skepticism, calls for specific legal justifications and other questions. DOJ lawyers continued to stress that the sentence must reflect the seriousness of the crime.

CZ is not happy about this. He had been listening to the Justice Department's speech, his brows furrowed, his forehead furrowed, and he frowned every now and then.

The probation service spoke and recommended a custodial sentence of five months, which they said was sufficient to deter the defendant and others "without being too harsh". It would be one of the longest sentences in the country for such an act.

The defense stated, "When I hear the government discussing the crimes here, they don't seem to be discussing the actual crimes," which is that CZ admitted there were no anti-money laundering procedures. Sanction violations are irrelevant.

Now another defense attorney spoke, and he said CZ's mother, son, nephew and sister were all present. He pointed to letters of support for CZ, mentioning his arrival in the United States. He contrasted another case in which a defendant spent 4 1/2 years protesting extradition: "[CZ] didn't do that. He chose to be here."

The judge is now asking defense attorneys questions, including verification Will CZ benefit from continuing to own Binance.

The defense said he had no control.

The defense stated that all factors supported a reduced sentence (a lighter sentence).

Judge: The probation department still recommends 5 months, do you agree?

Defence: I agree, but I think the probation department mentioned 5 months and then listed 6 factors you might consider using to reduce that. Defense attorneys recommended that CZ be sentenced to probation rather than jail time — a sentence very similar to that of BitMEX co-founder Arthur Hayes, who pleaded guilty to the same crime in 2022 and was sentenced to six months of house arrest and two years probation.

There was a relatively lengthy back-and-forth discussion about precedent and Binance’s own history; the judge asked the defense if it was implying that Binance implemented KYC/AML without the involvement of law enforcement; the defense stated that this was at least “ long before the solution”.

The defense again pointed to the fact that CZ came to the United States voluntarily rather than stay in the UAE (the DOJ previously said this was commendable, but another possibility is that CZ became a fugitive).

CZ spoke. He began by saying, "I'm sorry," and said he wanted to take responsibility for his "mistake." He noted that Binance has implemented KYC/AML procedures and is working with the U.S. government. "In my view, I want to do everything possible before I step down as CEO."

"Everything I have seen about your history and characteristics is of a mitigating and positive nature," the judge said . The court acknowledged that he came to the United States voluntarily, had no previous violations of the law, and that he had taken "extraordinary and significant steps" in cooperating with law enforcement. But the nature of the incident was "annoying".

The judge said he read every letter submitted (161) because "it's important to know who you are." The letters paint a picture of a man driven by your drive, passion and drive, the judge said: "You risked your entire net worth to make Binance successful." It is also clear from the letter that you are a dedicated family man.

The judge said CZ had the personnel, resources and "funds" to comply with U.S. regulations, but he "failed on that opportunity." The judge said: "After this painful lesson, you have the ability and willingness to change your ways." I think we are now entering the actual sentencing stage.

The judge once again rejected the Justice Department's request for 36 months. "The court needs to work hard to reach an appropriate and reasonable sentence," the judge said. The judge ultimately sentenced him to four months in prison.

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