The former Binance chief Changpeng Zhao has been given a lighter prison sentence after months of anticipation, here's why.

Binance founder Changpeng Zhao has been sentenced to prison.

The significantly reduced sentence CZ received has raised questions across the industry. 

Analysts have described the recent ruling as unjust. 

Former Binance CEO Changpeng Zhao and the US Department of Justice have been embroiled in a legal tussle over the past months following his November conviction of violating anti-money laundering laws and facilitating illicit transactions for sanctioned individuals. 

As one of the biggest legal cases to rock the crypto industry, CZ’s conviction resulted in significant sanctions, including a hefty $4.3 billion and his resignation from Binance as CEO. 

Despite the weight of the penalties, Zhao was not let off the hook, and he promised an additional hefty jail time for his conviction. 

Following several months of anticipation of his sentencing, US Judge Richard Jones finally brought the legal case to a close, albeit with a surprising twist.

CZ’s Shocking Sentence 

Contrasting the promised hefty sentence, Judge Jones handed CZ a mere four-month prison term for his guilty plea to violating US anti-money laundering laws.

See Also: Binance Founder CZ Received Just Four Months Sentence For Financial Misconduct

Justifying the ruling, Judge Jones asserted that the sentence, which mocks the 3-year term recommended by prosecutors and falls below the maximum one to two years under federal laws, is appropriate for the former CEO, citing the lack of evidence that he was “informed” of the illegal activities at the exchange.

Zhao’s conduct and reputation were also focal points in his sentencing. 

Despite the prosecutor’s argument that he adopted an intentional ‘apology over permission’ approach to circumventing regulations, Judge Jones emphasized that he acted responsibly and displayed a modest nature.

“The court finds the defendant has accepted responsibility,” stated the judge, adding that “There needs to be an effort by this court to impose a sentence that’s appropriate and reasonable” 

The perceived attributes, built on Zhao’s apology and over 160 letters from his family seeking leniency, are believed to have influenced Judge Jones’s ruling, resulting in the ousted CEO receiving minimal time for his conviction.

CZ’s reduced jail time has spotlighted its stark contrast from another major legal crypto case in the United States.

How CZ’s Sentence Differs From SBF’s

The Justice Department’s conviction of Channgpeng Zhao and Sam Bankman Fried (SBF) in November 2023 marked an eventual history, considering both positions as once-hailed titans of the industry.

However, while CZ’s sentence was a mere four months in jail, SBF bagged a 25-year term on March 28, 2024, raising a debate over the stark difference.

The severity of their charges justifies the variance in their sentencing. Unlike Zhao, whose allegations were solely focused on regulatory violations, SBF was convicted on several counts of financial fraud, including wire and securities fraud and money laundering conspiracy.  

Additionally, SBF was declared guilty of misappropriating user funds and triggering losses of over $8 billion for the users and the broader industry, a crime not present in the CZ cases. 

Binance has repeatedly reiterated the safety of users’ funds, providing the exchange and CEO an edge in its regulatory case.

Changpeng Zhao’s wealth and influence have been spotlighted as another reason for his reduced term.

One of the allegations against Binance was the facilitation of illicit transactions for terrorist organizations, and analysts have decried his light sentence as a miscarriage of justice.

Although the sentence ended his legal battles, the former CEO could still not return to the exchange, as his November ousting was final.

A mere 120-day sentence for Changpeng Zhao constitutes a win for him by letting him off the hook easily, considering the severity of the charges for which he was convicted and the rather stringent approach the DOJ is renowned for. 

CZ has issued a post-sentence statement; read this article to find out what he shared:

‘I Will Do My Time’: Binance Founder Sets Sights on Life After Prison

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