CZ was sentenced to four months in prison, what impact will it have on Binance?

On April 30, local time in the United States, at the federal court in Seattle, the founder and former CEO of Binance, CZ, formally accepted the verdict and was sentenced to 4 months for violating anti-money laundering laws. imprisonment. The former leader of the world's largest cryptocurrency exchange previously admitted to violating the Bank Secrecy Act in the operation of its platform.

Regarding the encryption industry, this case not only reflects the U.S. Department of Justice’s strict attitude towards enforcing laws on cryptocurrency exchanges, but may also have a profound impact on the global cryptocurrency market.

As for Binance itself, the transition to “de-CZ” has been smooth, and its market position and business data have not declined but increased, which once again confirms the security of user funds and the stability of the brand that Binance has repeatedly emphasized.

Previous Summary

Odaily Planet Daily previously reported that Binance and its CEO Changpeng Zhao (CZ) reached a settlement with multiple U.S. regulatory agencies on November 21, 2023, admitting to counterfeiting criminal charges of money laundering and violating U.S. sanctions and agreed to pay more than $4 billion in fines. CZ also agreed to resign as CEO and pay a $50 million fine. This marks the official end of a years-long investigation into Binance.

In the case, Binance was accused of money laundering violations, operating an unlicensed fund transmission business and violating U.S. sanctions. Binance admitted that its platform failed to prevent and report suspicious transactions with terrorist groups, involving at least 1.1 million transactions totaling more than $898 million.

Of the fine, $3.4 billion will be paid to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), while $968 million will be paid to the Office of Foreign Assets Control (OFAC) and requires Binance to comply with a series of strict sanctions Compliance Obligations. The U.S. Treasury Department said it was the largest fine in FinCEN's history.

CZ announced his resignation on the X platform and was replaced by Richard Teng as the new CEO. CZ said he will take a break and may engage in passive investing, focusing on startups in the blockchain/Web3/DeFi, artificial intelligence and biotech fields.

After that, CZ handed over a personal bail of US$175 million, but was not allowed to return to the UAE. The United States requires CZ to place all passports (whether valid or expired) in escrow and is required to communicate all performance status.

Sentencing Hearing

At the sentencing hearing held today, the U.S. Department of Justice (DOJ) and his defense attorney discussed CZ’s guilty plea in November last year to one count of violating the Bank Secrecy Act. The time that should be served later is debated. Under a plea agreement released in November, CZ had the right to appeal any sentence exceeding 18 months, but the Justice Department requested 36 months in a sentencing memorandum released last week. The defense requested that the sentence be changed to house arrest and suspended, and that he not serve any time in prison. The probation office recommended a five-month sentence in its pre-sentencing report, according to documents filed by the defense last week.

According to the judgment of professionals quoted by Coindesk, the Ministry of Justice is trying to use this case as a warning, so it requested a sentencing of about three years. "The government wants to ensure that these lower guidelines do not give anyone the freedom to breach our anti-money laundering initiatives," she said. "Normally when we negotiate a plea, we negotiate things like the amount of damages and what each party may retain. "I don't see anything in this document that suggests they were limited to 18 months."

Prosecutors also said that this level of sentencing sends a message that Industry leaders are required to “make the right choice every time, which is to comply with the law.”

The judge said that there was no precedent for the defendant to be imprisoned in this type of case. In the end, the judge rejected the Ministry of Justice's request for a 36-month sentence and chose to sentence CZ to 4 months in prison.

At the same time, the judge also mentioned that he read all 161 letters submitted because "it is important to know who you are." He also noted: "I have never seen so many letters, not just from family members but from people who have known you for a long time." The judge noted that the letters painted a picture of a man driven by drive, passion and determination. characters. "You risked all of your net worth just to make Binance succeed," the judge said. He also noted that the letter clearly showed that CZ is a dedicated family man and cited examples of Binance's philanthropy. .

Restore a more authentic and multi-faceted CZ

On the defense, CZ’s lawyers cited his “unwavering” acceptance of responsibility, the $50 million in criminal fines he paid, and the lack of a similar The defendant in the case was imprisoned, so that CZ could try to shorten the sentence as much as possible. At the same time, the lawyer also mentioned that it was Binance under CZ’s leadership that made Binance an industry leader in compliance, “despite the initial failure that led to this prosecution.”

CZ also mentioned in the letter released last week that he apologized for his "bad decision-making" and took "full responsibility" for his actions. In the letter, he admitted that compliance reforms should have been implemented at Binance from the beginning, but failed to do so and did not establish the necessary compliance controls, which he said he could not argue with. CZ expressed regret at not being able to change this part of Binance’s story. However, under his leadership, Binance has implemented the strictest anti-money laundering controls since 2022, becoming the leader among non-U.S. exchanges. “I have no excuse for failing to establish the necessary compliance controls at Binance,” CZ assured that this would be his only “contact with the criminal justice system.”

At the same time, in the 350-page plea letters from relevant people, we can also see another side of CZ’s career: one of them was written by his sister, former Morgan Stanley executive director Jessica Zhao , describing Binance’s handling of a large number of customer withdrawals following the 2022 FTX incident. Jessica emphasized that despite facing technical pressure, CZ remained calm and ensured the safety of all customer funds, proving his leadership and commitment to customers.

After the earthquake disaster in Turkey, CZ not only personally donated nearly 5 million US dollars, but also launched the Binance Charity Fund to use Web3 technology to support disaster relief efforts and expand the scope of help. This move not only supports thousands of disaster victims, but also innovatively expands the way relief funds are raised and distributed by opening cryptocurrency accounts for NGOs.

During the Russo-Ukrainian War, CZ’s attitude towards the team also showed his humanistic leadership style and high emphasis on employee safety. He personally organized the task force to ensure that team members in Ukraine received the necessary support. At the same time, Binance Charity has partnered with multiple international organizations to provide large-scale humanitarian aid to refugees, directly providing financial support to thousands of refugees and displaced people through cryptocurrency.

Together, these letters paint a portrait of a man who demonstrated a high degree of responsibility and integrity in both business and personal ethics. CZ not only demonstrates outstanding capabilities in technology and financial management, but also demonstrates profound self-reflection and pursuit of integrity in personal behavior and decision-making. These descriptions provide viewers with a comprehensive and nuanced perspective on the complexities and core values ​​of this important figure in the cryptocurrency space.

Binance embarks on the road ahead, full of confidence

Although CZ left the post of CEO of Binance, Binance’s market position has not been significantly affected, and it still ranks first in the world Big Cryptocurrency Exchange. According to data from Coingecko, Binance’s 24-hour trading volume remains above $16 billion, and its monthly visits are as high as 101 million, steadily leading the world. Especially since November last year, the trading volume has not shown a downward trend due to legal incidents, nor has there been any panic outflow. On the contrary, in March this year, driven by the bull market cycle, the trading volume once soared to 68 billion US dollars, a new record. history record.

As Binance said in its announcement in November last year, “We always adhere to the core values ​​of user safety and security. We take our responsibilities as a custodian very seriously and serve the needs of every user. Assets are backed 1:1. * This means users can withdraw 100% of their assets from the platform at any time. Notably, in our settlement with the US agency, they: did not accuse Binance of misappropriating any user funds. , and there is no accusation that Binance has participated in any market manipulation. "

Binance has the courage to face global regulatory challenges, actively dialogue with regulatory agencies, and is committed to exploring a sustainable compliance path for the cryptocurrency industry. This not only maintains the stability of the platform and user confidence, but also provides an important reference for the long-term development of the entire encryption market. Through this open and collaborative attitude, Binance demonstrates its maturity and wisdom as an industry leader, further solidifying its leadership position in the global crypto market.

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