CZ Prison Term: How Long a Sentence Will Binance Founder Face After Guilty Plea?
Changpeng Zhao (CZ) could serve time after pleading guilty to violations of the Bank Secrecy Act.
Key Takeaways
- After agreeing a settlement with the U.S. Department of Justice, Binance’s Changpeng Zhao may face a maximum sentence of 10 years.
- The sentencing date is set for February 2024.
- CZ has agreed to waive his right to appeal if the sentence does not exceed 18 months.
- He will also step down as Binance CEO and is barred from running a business for the next three years.
Since founding Binance in 2017, Changpeng Zhao (CZ) has been one of crypto’s most prominent figures. Throughout his years as CEO of the world’s largest cryptocurrency exchange, CZ has played a leading role in some of the sector’s most dramatic moments.
Now, after pleading guilty to anti-money laundering violations in the US, Zhao has stepped down from his role at Binance as part of a settlement agreement announced on Tuesday, November 21. So what next for the former CEO? Banned from running a business and facing the prospect of jail time, CZ’s life trajectory has been transformed.
CZ Faces Prison Sentence Of 18 Months Or More
With his sentencing due to take place on February 23, 2024, Zhao’s bail was set at $175M. Judge Brian Tsuchida has allowed the Binance founder to return to his home in Dubai on the condition that he returns to the US 14 before the scheduled sentencing date.
Violations of the Bank Secrecy Act carry a maximum sentence of 10 years in cases like CZ’s where multiple crimes have occurred.
According to the New York Times, prosecutors are seeking a sentence of 18 months in prison, as long as the sentence doesn’t exceed 18 months, CZ has agreed to waive his right to appeal. However, according to senior Justice Department officials cited by the Times, there is still a chance prosecutors could push for a harsher punishment.
Binance Founder Waves Goodbye
Announcing his departure as Binance’s CEO, Zhao declared Richard Teng as his successor, elevating the company’s Global Head of Regional Markets to the top job. As Binance’s largest shareholder, CZ said he “will remain available to the team to consult as needed.” however, his agreement with US authorities prevents him from acting as a decision-maker.
Having handed over the reins of the company he founded, CZ said his immediate plan is to take a break. After that, he intends to invest in startups working in the fields of Decentralized Finance (DeFi), Web3, Artificial Intelligence (AI) and biotech, with a view to taking a “passive” minority shareholder role.
“I can’t see myself being a CEO driving a startup again,” CZ observed. However, he remains open to mentoring other entrepreneurs.
CZ Shock Departure Rocks Markets But Picture Remains Bullish
Upon the news of CZ’s departure and Binance’s $4.3B settlement, the price of BNB dropped sharply. Despite bouncing back somewhat after the initial crash, at press time, BNB was down nearly 10% in 24 hours. The price of Bitcoin was down over 2% in the same period.
Yet, despite the initial market reaction, many observers believe Binance’s settlement marks an important turning point for the sector. Discussing the news, Coinbase CEO Brian Armstrong said he thinks it is good for the industry, which has “turned a page” and can now move forward.
In comments shared with CCN, Nigel Green, the CEO of deVere Group , predicted that CZ’s departure from Binance will trigger short-term volatility in the crypto market. However, he noted that “institutional money is pouring in and we expect it to continue to do so,” leading to a more optimistic outlook in the medium- to long-term.
Green said the expectation that the Securities and Exchange Commission (SEC) will approve Bitcoin Exchange Traded Funds (ETFs) is driving a more bullish trend.
“The CZ news is a jaw-dropping blow in many ways, but this moment must now be used as a point of inflection to further shore up the sector and instill trust and transparency,” he concluded.
