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Binance Founder CZ Apologizes and Accepts Responsibility in Letter to Judge

Hassan Shittu
Last updated: | 3 min read
Binance Founder CZ Apologizes and Accepts Responsibility in Letter to Judge

Binance founder and former CEO Changpeng “CZ” Zhao penned a letter to the judge overseeing his case on April 24, expressing remorse for his actions and accepting full responsibility for his “poor decisions.”

Zhao’s letter comes after he and Binance settled charges with the US Department of Justice (DOJ) in November 2023. Despite previously waiving the right to appeal any sentence up to 18 months, the DOJ is now seeking a 36-month sentence for Zhao.

Support Letters for Binance Founder CZ Urge Judge to Consider Character Beyond Compliance Failure

In a letter addressed to U.S. Judge Richard A. Jones of the Western District of Washington, CZ acknowledged his failure to establish necessary compliance controls at the exchange.

He expressed remorse, stating, “There is no excuse for my failure to establish the necessary compliance controls at Binance,” while assuring the judge that the incident would be his only involvement with the criminal justice system.

Accompanying Zhao’s letter were 161 additional letters of support from family members, friends, and associates seeking leniency.

He Yi, another Binance co-founder and the mother of Zhao’s children, described him as a guardian of the cryptocurrency industry’s “Wild West. She noted the regulatory uncertainties surrounding the industry and Zhao’s dedication to navigating these challenges.

“If the cryptocurrency industry is compared to the Wild West, then CZ is the guardian of this wilderness,” Yi wrote. “Even the US has not decided how to regulate and define this industry.

Zhao’s wife, Yang Weiqing, cited Binance’s philanthropic efforts, including substantial donations to disaster-stricken areas such as Japan in 2018. Despite withdrawing from the Japanese market, Binance continued to support needy communities.

Their children, Rachel and Ryan, both US university students, shared personal stories depicting CZ as a supportive father, urging the judge to consider his character beyond the current incident.

CZ’s Sentencing Verdict Rests with U.S. Judge Amidst Outpouring of Support

Jessica Zhao, former Managing Director at Morgan Stanley and CZ’s sister, admitted her brother’s mistakes but highlighted his commitment to ethical conduct, particularly in ensuring Binance never misused customer funds, even amidst the fallout from the FTX incident.

Another letter of support came from Tigran Gambaryan, Binance’s Head of Financial Crime Compliance and a former special agent in the US Department of Treasury, who is currently detained in Nigeria amid a dispute involving Binance and Nigeria. Gambaryan praised Zhao’s integrity, business acumen, and philanthropy, stating that his actions have had a positive global impact.

Influential figures such as Max S. Baucus, former US Ambassador to China, and academics Jeremy R. Cooperstock from McGill University and Ronghui Gu from Columbia University backed CZ’s character and contributions to the industry.

Additionally, Sean Yang, a managing director at Morgan Stanley and a member of the ruling family in the United Arab Emirates, contributed to the letters affirming CZ’s character and contributions.

Despite these expressions of support, the final decision rests with the judge, who will weigh the circumstances of the case before delivering the sentencing verdict.

US Prosecutors Recommend 36-Month Prison Sentence for Binance Founder CZ

CZ pleaded guilty to violating money laundering requirements in the United States and resigned as CEO in November 2023. Subsequently, Zhao personally faced a $50 million fine, along with larger penalties imposed on Binance.

According to online reports, federal sentencing guidelines capped Zhao’s maximum sentence at 18 months in prison, a term he agreed not to appeal. He has remained free in the US on a $175 million bond.

Following his admission of guilt regarding US money laundering laws, Zhao and Binance agreed with the US government to pay $4.3 billion in fines to resolve the criminal case. Binance was permitted to continue its operations with US law compliance as part of the agreement.

In a court filing on April 23, US prosecutors recommended a 36-month prison sentence for Zhao after his guilty plea. They argued that such a sentence was justified given the severity of Zhao’s deliberate violation of US law and its repercussions. The prosecutors stated that this sentence and the agreed $50 million fine would appropriately balance the factors outlined in 18 USC § 3553(a) and achieve the sentencing goals.