Industry Reacts to Changpeng Zhao’s Sentencing

The community and industry participants have reacted strongly to the sentencing of Binance founder Changpeng Zhao (CZ), who is to serve four months in prison.

CZ himself expressed gratitude for the “care and support.” 

I would like to thank everyone for your care and support, be it writing letters, showing support on X, or in any other form. They all mean a lot to me and keep me strong. I will do my time, conclude this phase and focus on the next chapter of my life (education).

I will remain a…

— CZ ? BNB (@cz_binance) May 1, 2024

“I will do my time, conclude this phase and focus on the next chapter of my life (education). I will remain a passive investor in the crypto industry (and a hodler). The industry has entered a new era. Compliance is very important,” he wrote.

Former Binance Chief Strategy Officer Patrick Hillmann noted that he witnessed Zhao “rebuild the entire executive team” in 2021 to prepare the company for global regulation. 

I witnessed first hand as @cz_binance rebuilt the executive team around him in 2021 to prepare Binance to be regulated at the global level. I believe Judge Jones handed down a just sentence given the gravity of both CZ’s missteps and his attempts to correct past mistakes.

— Patrick Hillmann (@PRHillmann) April 30, 2024

“I believe Judge Jones handed down a just sentence given the gravity of both CZ’s missteps and his attempts to correct them,” Hillmann emphasized. 

Prosecutors had sought a harsher punishment of 36 months in prison. During the hearings, CZ apologized and expressed his willingness to take full responsibility. Previously, he had expressed remorse for “poor decisions” in a letter to the judge. 

Ki Young Ju, founder and CEO of analytics firm CryptoQuant, acknowledged that the former Binance CEO “advanced” the crypto industry by helping create user-friendly products and making crypto purchases more accessible and secure.

You’ve advanced this industry by guiding entrepreneurs to build products and making crypto purchases more accessible and secure worldwide.

Thank you, CZ. We appreciate you.

— Ki Young Ju (@ki_young_ju) May 1, 2024

Braden Perry, partner at law firm Kennyhertz Perry and former U.S. federal prosecutor, told The Block that Zhao’s sentence sets an important precedent: 

“In this case, the alleged crime and the fact that CZ committed a non-violent offense for the first time led the judge to analyze what other sentences have been handed down to individuals in similar situations. As the defense noted, most, if not all, had not previously received prison terms.”

However, some were less enthusiastic about the situation. Dennis Kelleher, CEO of Better Markets, called the sentence a “glaring judicial error.” 

He added that the judge was “cornered,” as the Department of Justice accused Zhao not of money laundering, but of creating poor infrastructure for combating the legalization of criminal proceeds. 

“Despite the obscene and unfounded boasting of the Department of Justice at the press conference announcing the charges, the agency did not even accuse CZ of money laundering. He was only charged with lacking an appropriate program. It’s less than a slap on the wrist,” Kelleher fumed. 

Swan Bitcoin Managing Director Terrence Yang also noted surprise at Zhao’s short sentence. In his view, the authorities simply did not have enough evidence. 

Federal prison consultant Sam Mangel added that the Binance founder will serve all 120 days in prison without leniency.

“CZ will serve his sentence in a high-security facility, not in a minimum-security prison camp, which is typical in similar cases. This is because Zhao is not a U.S. citizen. Although it will be uncomfortable for him, I believe he will manage,” Mangel concluded. 

As part of an agreement with the U.S. Department of Justice, Zhao agreed to pay a $50 million fine and step down as CEO of Binance.

Richard Teng, head of regional markets, has succeeded him as CEO.