A recent court filing suggests Changpeng "CZ" Zhao's legal challenges are just beginning, despite pleading guilty to violating U.S. anti-money laundering requirements in a deal with the Department of Justice.
Zhao is expected to be sentenced in February 2024. He is currently defying government efforts to prevent their return to the United Arab Emirates (UAE) while awaiting sentencing with his family. However, in a Nov. 24 filing, authorities indicated that he could face a harsher punishment than initially anticipated:
"The defense claims that Mr. Zhao simply faces a "short" sentence and has no incentive to flee. The reality is that the upper limit of the Guidelines range can be as high as 18 months, and the United States is free to argue for any penalty up to the legal maximum of ten years."
A possible longer sentence runs counter to the consensus of legal experts. According to an analysis by former Securities and Exchange Commission official John Reed Stark, Zhao possibly receive a sentence of 12 to 18 months in a minimum security prison under the United States Sentencing Guidelines. Although his legal team is likely not to ask for a prison sentence or an alternative sentence, combining prison sentence with house arrest and probation.
Zhao's relevance to the crypto industry may also influence his fate. Stark believes that if "the Department of Justice does not secure a sentence for CZ that deters future money laundering conduct in the cryptoverse (and elsewhere), then this "plea deal" could end up backfiring on the Department of Justice. Justice".
For the Justice Department, seeking a longer prison sentence for Zhao may not be as easy as it seems. Under Stark's analysis, government officials would have to present more substantial evidence implicating him in criminal activity. “Hopefully, the Department of Justice has something up its sleeve, or perhaps Binance monitoring and other remedial requirements will reveal more egregious and chargeable crimes,” he said. wrote on X (formerly Twitter).
zhao He was released on $175 million bail. that requires him to return to the United States 14 days before his scheduled sentencing date of February 24, 2024. In his comments, Stark noted that Judge Richard A. Jones is expected to consider the government's motion on November 27, with the possibility of strengthening bail requirements through additional bail conditions or delaying a decision.
The Binance-CZ case is generating controversy among legal and business experts. According to Omid Malekanauthor and adjunct professor at Columbia Business School, the DOJ's approach to the exchange differs significantly from what is seen in traditional finance.
"Yeah [banks] If they had been subject to the Binance Standard, there would be hundreds of CEOs in jail and less money for shareholder buybacks (or lobbying). But the bankers were smart enough to never question the game.”
On November 21, Zhao reached an agreement of 4.3 billion dollars with the US government for allegedly allowing people involved in illicit activities to transfer funds through the exchange. He resigned as CEO as part of the agreement.
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