The founder of Binance, Changpeng “CZ” Zhao, wrote a letter expressing remorse for his actions and taking full responsibility for his poor decisions, following the settlement of charges with the US Department of Justice in November 2023. Despite initially waiving the right to appeal any sentence up to 18 months, the DOJ is now seeking a 36-month sentence for Zhao. In the letter addressed to U.S. Judge Richard A. Jones, Zhao acknowledged his failure to establish necessary compliance controls at Binance and expressed remorse for his actions, while assuring the judge that this incident would be his only involvement with the criminal justice system. Along with Zhao’s letter, 161 additional letters of support from family, friends, and associates were submitted seeking leniency.
Support letters for CZ emphasized his character beyond the compliance failure, with his co-founder He Yi describing him as a guardian of the cryptocurrency industry’s “Wild West,” noting his dedication to navigating regulatory challenges. Zhao’s wife, Yang Weiqing, highlighted Binance’s philanthropic efforts, including donations to disaster-stricken areas like Japan in 2018. Their children, Rachel and Ryan, shared personal stories depicting CZ as a supportive father. Other letters of support came from his sister Jessica Zhao and Tigran Gambaryan, Binance’s Head of Financial Crime Compliance, currently detained in Nigeria. Influential figures and academics also backed CZ’s character and contributions to the industry.
Despite the outpouring of support, the final decision on CZ’s sentencing verdict rests with the U.S. judge, who will consider the circumstances of the case before delivering the verdict. CZ pleaded guilty to violating money laundering requirements in the United States and resigned as CEO in November 2023. He faced a $50 million fine and larger penalties imposed on Binance. Following his admission of guilt, Zhao and Binance agreed to pay $4.3 billion in fines to resolve the criminal case and continue operations in compliance with U.S. laws. Despite federal sentencing guidelines capping Zhao’s maximum sentence at 18 months, US prosecutors recommended a 36-month prison sentence for the severity of his deliberate violation of US law.
In the court filing on April 23, US prosecutors argued that a 36-month sentence for Zhao, along with the agreed $50 million fine, would appropriately balance the factors outlined in 18 USC § 3553(a) and achieve the sentencing goals. They emphasized the severity of Zhao’s violation of US law and its repercussions as justifying the recommended sentence. While Zhao has remained free in the U.S. on a $175 million bond, the final decision on his sentencing remains with the judge. Despite the recommendations for a longer prison sentence, the support letters submitted for CZ highlight his character and contributions to the cryptocurrency industry, urging the judge to consider these aspects as well.
