Ex-Binance CEO Changpeng Zhao may be off to federal prison for financial crimes that led the cryptocurrency exchange he founded to agree to paya $4.3 billion fine. But his reputation, at least in a Seattle courtroom on Tuesday, was never better.
The judge, CZ's defense lawyers and even prosecutors acknowledged during the 2 1/2 hour sentencing hearing that this 47-year-old billionaire was not your run-of-the-mill criminal defendant. Instead, he was a philanthropist, a do-gooder, a first-time lawbreaker and family man who turned himself in to accept whatever may come.
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This unexpected resuscitation of the crypto kingpin's reputation factored into his fate: a tremendously light sentence of four months, far less than the three years prosecutors sought to punish – in their telling – this historically egregious violation of the Bank Secrecy Act (BSA).
U.S. Judge Richard Jones, 74, had none of it. "To be honest with you, sir, everything I see about your history and characteristics are of a mitigating nature," he said to Zhao near the start of his sentencing. He recalled going through a book of glowing sentencing letters that CZ's friends and family had submitted.
Not everything worked out for CZ in court. He's still due to spend four months in prison for failing to implement effective money-laundering controls as CEO of Binance, the world's largest crypto exchange. A source at the U.S. Department of Justice said he's the first CEO to go to prison under the BSA.
If the court proceedings were the model of the man, though, CZ will enter prison rejuvenated.
"Lots of really good people do bad things and violate the law," prosecutor Kevin Mosley told Judge Jones when asked if his team's sentencing recommendation factored in CZ's prolific global philanthropy efforts. CZ's lawyers later called out Mosley's unconvincing insistence that it had.
Judge Jones said he spent the weekend poring over the voluminous letters of support for CZ from friends and family until the book they were contained in literally fell apart. "I don't think I've ever seen a volume of letters" consistent in their characterization of a passionate if flawed defendant, the judge said.
CZ leaned forward in his seat throughout Judge Jones' sentencing remarks. He nodded every time the judge pointed out the former CEO's instances of wrongdoing. His body language telegraphed he anticipated the light sentence he got; it was almost like CZ knew what was coming when heflashed those four fingersmonths ago.