Timeline | Binance founder CZ was eventually sentenced to 4 months in prison

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24-05-01 06:28
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Changpeng Zhao (CZ), born in Lianyungang, Jiangsu in 1977, has a strong technical background and worked as a technical director at Bloomberg. He founded Binance in 2017. With its excellent operations and innovative ideas, Binance has grown rapidly, and CZ has become a well-known figure in the cryptocurrency field.


With the booming cryptocurrency market, regulatory issues have gradually surfaced. The US government began an investigation into CZ's business activities, accusing him of not declaring all his income to the government and laundering money through virtual currency trading platforms. After that, regulators fined Binance $4.3 billion (including criminal charges and civil charges) and froze CZ's assets in the United States. CZ pleaded guilty to the charges of suspected money laundering and paid a fine of $50 million. He was then allowed to be released on bail of $175 million and was once allowed to return to the UAE during the bail period. But as the case developed, the US court repeatedly overturned its previous decisions and banned CZ from traveling abroad.


In April 2024, the U.S. prosecutors formally filed criminal charges against CZ and recommended a 36-month prison sentence. The prosecutors pointed out that CZ's Binance platform had serious compliance issues, failed to report suspicious transactions related to terrorist organizations, and supported the sale of child sexual abuse materials and received ransomware ransoms. The prosecutors believe that these actions seriously violated the U.S. anti-money laundering regulations and must be severely punished.


According to the latest news, CZ's criminal trial has been determined. Apparently, 161 letters of support played a big role in the verdict. He was eventually sentenced to 4 months in prison. BlockBeats has compiled the relevant information from the past into a timeline and published it as follows to help readers understand the relevant process of the CZ incident:


2024


May 1


CZ was eventually sentenced to 4 months in prison

CZ was eventually sentenced to 4 months in prison, but he will not be detained immediately. CZ's legal team suggested that he could serve his sentence at the Federal Detention Center (FDC) in Seattle, Washington. It is reported that the warden of the FDC prison said that the prison has "lack of natural light" and is understaffed considering the number of prisoners. The specific date of CZ's sentence will be designated by the court, but it has not yet been decided.


The judge again rejected the Ministry of Justice's proposal, saying that he had personally read the 161 letters of support and believed that CZ had the ability and willingness to reform.

The judge in the CZ case again rejected the Justice Department's previous proposal for a 36-month prison sentence. He personally read 161 letters of support because "it is important to know who CZ is." He has never seen so many letters of support, not only from family members, but also from people who have known CZ for a long time. These letters portray a person driven by passion and drive. CZ risked losing all his assets to make Binance a success.


The judge said that he had investigated the fact that CZ took significant and extraordinary measures to cooperate with law enforcement, and everything he saw about CZ and CZ's characteristics was of a mitigating nature. He believed that after this painful lesson, he believed that CZ had the ability and willingness to reform. CZ was obviously feeling on pins and needles when the judge spoke. He leaned forward, listened attentively, and nodded occasionally.


CZ's mother, son and other relatives all came to the scene to support CZ

CZ's mother, son, nephew and sister all attended the defense. The defense lawyer said that CZ did not show evasive behavior like the criminals in other cases, but chose to face everything. According to reporters at the scene, CZ raised his eyebrows, frowned his forehead, and sometimes frowned.


The photos of the trial were leaked, and the judge was annoyed by this


CZ’s lawyer repeatedly mentioned some "secret matters" that could not be spoken in his defense

It is worth noting that CZ’s lawyer repeatedly stated in his defense that the court should consider some secret "compelling factors" or "matters that are sealed."


CZ sentencing hearing has officially begun, CZ said the first step to take responsibility is to fully recognize the mistakes

The judge in the CZ case has taken his seat, and the sentencing hearing will begin at 9 a.m. PDT on Tuesday (0:00 a.m. Beijing time on May 1). CZ's lawyers asked for probation on the grounds that CZ accepted responsibility "unflinchingly" and had already paid a $50 million criminal fine. They also said that CZ had never committed a crime before and no defendant in a similar case had been imprisoned.


CZ's photo of entering the court was exposed


When entering the court, CZ wore a dark blue suit and a light blue tie. CZ made a brief speech during the trial, and his voice was low but clear. He said that the first step to taking responsibility is to fully recognize the mistakes, and Binance has recognized the importance of having a strong KYC/AML program.


April 29


The U.S. Probation Office recommends five months of probation for CZ

According to court documents, although the Department of Justice requested a 36-month prison sentence and a $50 million fine for CZ. But the Probation Office recommended a five-month suspended sentence in its statement report. At the same time, the defense requested house arrest and probation without jail time. Analyst Tama Kudman, partner of Kudman Trachten Aloe Posner LLP, said that the Department of Justice's request for a longer sentence seemed to send a strong message. The U.S. Department of Justice has been working to combat money laundering through cryptocurrencies, and CZ's "violation of anti-money laundering rules is very blatant."


April 24


Full text of He Yi's letter to the US judge: What is a more real Zhao Changpeng like?

The case of Binance founder CZ is about to usher in the final result at the end of April. There are reports that CZ may be sentenced to 36 months in prison. Everything will have to wait until April 30th to be finalized. On Tuesday, US time, CZ submitted a letter to the judge in charge of the case, apologizing for his behavior and believing that he should take full responsibility. In addition to CZ's letter, there are other letters of appeal from important figures such as family, friends, politicians, employees, etc., a total of 161 letters. Of course, one of them is written by He Yi, who knows CZ best.


CZ submitted an apology letter to the judge, and there were 161 other letters of appeal from people in various industries

According to CoinDesk, Binance founder and former CEO CZ apologized for his "wrong decision" in a letter submitted to the judge in charge of the case on Tuesday, and admitted that he took "full responsibility" for his actions.


In addition to CZ's letter, there are 161 letters of appeal from family, friends and others. Former U.S. Ambassador to China Max S. Baucus, Professor Jeremy R. Cooperstock, Professor of McGill University, Associate Professor Gu Ronghui, Professor of Columbia University, Morgan Stanley Managing Director Sean Yang, and members of the United Arab Emirates family also sent letters of support.


Lawyer retorts: CZ should be sentenced to probation instead of imprisonment

According to Coindesk, Binance founder CZ's lawyers refuted in a document filed at noon that CZ should be sentenced to probation instead of imprisonment.


US Department of Justice lawyers seek 36 months in prison and a fine of $50 million

The sentencing memo filed by US Department of Justice lawyers on Tuesday night stated that after CZ pleaded guilty to violating the Bank Secrecy Act in November last year, he should be sentenced to 36 months in prison and pay a $50 million fine. (CoinDesk)


March 13


US court requires Binance founder CZ to surrender passport

The U.S. District Court for the Western District of Washington has modified the bail conditions of Binance founder CZ, requiring him to stay in the United States before sentencing and report to the pre-trial services department before any inland travel.


In addition, Zhao Changpeng must surrender his Canadian passport to a third party supervised by a lawyer and be accompanied by this person when traveling. He must also surrender all current and expired passports and travel documents, and may not apply for or obtain new passports or travel documents without the permission of the court.


March 6

The United States applies to modify CZ's bail conditions, hoping that CZ and his defense team will disclose travel plans


According to Blockworks, the relevant US departments applied to modify the bail conditions for CZ, hoping that CZ and his defense team will disclose his travel plans because they are worried that he will go to the US-Canada border. The United States also requires CZ to hand over his Canadian passport to a "third-party custodian hired and supervised by his lawyer of record."


The relevant departments also stated that the initial bail conditions were based on the expectation that CZ would live in the UAE, so they did not address issues such as how to keep his passport and issue notifications to the pre-trial service department regarding his travel plans and residence.


February 21

The U.S. Department of Justice filed a proposed protective order motion against CZ's lawsuit to protect the relevant sensitive information involved

According to CoinGape, according to a protective order motion on February 20, considering the sensitive information in CZ's lawsuit, U.S. lawyers applied for a protective order. The Department of Justice stated that the defendant CZ and defense lawyers did not object to the request for a protective order. According to U.S. prosecutors, CZ admitted to failing to maintain an effective anti-money laundering program. The evidence materials provided include sensitive witness interviews, third-party financial records, and third-party internal business records.


In the motion, the Justice Department proposed a proposed order restricting public access to any information. "The proposed protective order will not be disseminated or distributed to anyone other than defense counsel, members of the defense team, and the defendants," the document reads.


January 25

CZ proposed to use $4.5 billion in Binance shares as collateral for round-trip travel to the United States, but was rejected by the judge

According to CNBC, a new criminal court document shows that Binance founder CZ once proposed to use $4.5 billion in Binance equity as a guarantee for returning after leaving the United States, but was rejected by the judge. CZ's lawyer said in a letter to Judge Richard Jones on December 22 last year that CZ's share valuation was based on Binance's last round of financing two years ago.


Previously, a federal judge rejected CZ's request to go to the United Arab Emirates in December 2023 to handle hospitalization and surgery for an important person in his life.


December 2023 and before


US court again rejected CZ’s request for travel permission

On December 30, according to The Block, the U.S. District Court for the Western District of Washington in Seattle again rejected CZ’s "travel permission request" on Friday.


Judge to hold telephone hearing on CZ’s application for travel permission

On December 29, CoinDesk reporter @nikhileshde posted that the judge had scheduled a telephone hearing for 2 a.m. on December 30 regarding “CZ seeking travel permission from the federal court overseeing his case and sealing his application.”


CZ is requesting travel permission from the federal court overseeing his case

On December 28, CoinDesk reporter @nikhileshde tweeted that Binance founder CZ is requesting travel permission from the federal court overseeing his case.


US District Judge Accepts Guilty Plea of Former Binance CEO CZ

On December 7, according to The Block, documents from the U.S. District Court for the Western District of Seattle showed that Judge Richard Jones had accepted the guilty plea of former Binance CEO CZ. CZ pleaded guilty to charges of anti-money laundering and sanctions violations, a case that came to a conclusion after years of investigation by federal regulators. Binance agreed to pay $4.3 billion, one of the largest corporate settlements in history. CZ has agreed to pay a $50 million fine and resign as CEO.


WSJ: U.S. judge temporarily bans CZ from leaving the United States

On November 28, according to the Wall Street Journal, a federal judge in the United States temporarily banned Binance founder CZ from leaving the United States. The judge still needs to decide whether to require CZ to stay in the United States to await a verdict on anti-money laundering violations. The verdict is scheduled for the end of February.


CZ submitted documents to the court stating that "he should be allowed to return to the UAE before the verdict"

On November 24, John Reed Stark, former director of the Internet Enforcement Office of the U.S. Securities and Exchange Commission (SEC), posted on social media that according to court documents, Binance founder CZ argued that he should be allowed to return to the UAE before the verdict, and CZ planned to fight for "no jail time" (or choose a few months of imprisonment plus a few months of home detention).


CZ's sentencing hearing is scheduled for February 2024

On November 22, according to CoinDesk, Binance founder and former CEO CZ has been released on a $175 million personal bond, and the sentencing hearing is scheduled for 9:00 a.m. Pacific Time on February 23, 2024 (1:00 a.m. Beijing Time on February 24).


Market news: CZ's personal bail is $175 million

On November 22, according to market news, CZ's personal bail was $175 million. Previously, Binance founder CZ had appeared in the Seattle court. CZ faces up to 10 years in prison, but according to the plea agreement, the sentence is expected to be no more than 18 months. The U.S. Department of Justice has not yet made a final decision on the length of his imprisonment. The defense attorney stated in court that the sentencing will be postponed for 6 months.


Binance founder CZ resigns as CEO, Richard Teng takes over

On November 22, Binance founder CZ announced his resignation as CEO. CZ said that although the decision was emotionally difficult, he must take responsibility for past mistakes and take responsibility for the community, Binance and his personal interests. The new CEO will be replaced by Richard Teng, the company's former head of global regional markets.


Bloomberg: CZ is not allowed to continue to hold any position, but will still retain a majority stake

On November 22, Bloomberg quoted people familiar with the matter as saying that regulators will impose a fine of $4.3 billion on Binance (including criminal charges and civil charges), and Binance will continue to retain its operational capabilities. In addition, founder CZ agreed to resign and plead guilty, and will not be allowed to hold an executive position in Binance, but he will still retain a majority stake in Binance and will appear in person in the Seattle Federal Court on Tuesday afternoon to file a defense.


The U.S. Department of Justice is seeking a fine of more than $4 billion from Binance to settle related criminal charges, and the plan will be released as early as the end of this month

On November 21, Bloomberg quoted people familiar with the matter as saying that the U.S. Department of Justice is seeking a fine of more than $4 billion from Binance as part of a proposed solution to its years-long investigation.


Binance and its founder CZ asked a U.S. judge to dismiss the lawsuit filed by the CFTC

On July 28, Bloomberg reported that cryptocurrency trading platform operator Binance Holdings Ltd. and its co-founder CZ asked a U.S. federal judge to dismiss the lawsuit filed by the Commodity Futures Trading Commission.


Lawyers for Binance and CZ filed a motion to dismiss with a Chicago court on Thursday, stating in the document: "In this case, the Commodity Futures Trading Commission attempted to regulate foreign individuals and companies residing outside the United States and operating outside the United States. This exceeds the limits of its statutory authority and tramples on the deep-rooted principle of comity with foreign sovereign states."


Binance and its CEO CZ were sued by the U.S. CFTC for violating regulatory regulations

On March 27, Bloomberg reported that the crypto trading platform Binance and its CEO CZ were sued by the U.S. Commodity Futures Trading Commission (CFTC) for alleged violations of trading and derivatives rules.


The CFTC filed the lawsuit on Monday in federal court in Chicago. The derivatives regulator said Binance evaded its obligations by not registering properly. The CFTC has been investigating whether Binance failed to prevent U.S. residents from buying and selling cryptocurrency derivatives since at least 2021. CFTC rules generally require platforms to register with the agency when allowing Americans to trade these products.


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