The saga of Binance founder Changpeng “CZ” Zhao’s legal troubles continues as his sentencing date has been postponed to April 30. This development came to light when a “notice of rescheduled hearing” was filed in a Seattle Federal Court on February 12.
Zhao, who had earlier pleaded guilty to money laundering charges, was initially set to be sentenced on February 23. The expectation is that he could face up to 18 months in prison. However, a twist in the tale emerged on November 24 when the prosecution hinted at a potentially sterner punishment than initially thought.
The defense argues that Zhao is looking at a “brief” sentence and has no reason to abscond. But the reality could be quite different. The upper limit of the Guidelines range could be as high as 18 months, and the United States reserves the right to argue for any sentence up to the statutory maximum of ten years.
Despite this, some believe a longer sentence is unlikely. John Reed Stark, a former official of the U.S. Securities and Exchange Commission, suggests that Zhao could be looking at a 12–18 month sentence in a minimum-security prison under U.S. sentencing guidelines.
Zhao’s legal team, on the other hand, is likely to advocate for no jail time or an alternative sentence, possibly suggesting a combination of prison time, home detention, and probation.
Currently, Zhao is out on bail, having posted a $175 million bond, and is residing in the United States as he awaits his sentencing. A U.S. Federal court, on December 29, ruled that Zhao is prohibited from traveling outside the U.S., thereby denying his second request to leave for Dubai before his trial.
In a letter to Judge Richard Jones that was recently unsealed, Zhao’s lawyers revealed that he had offered all of his equity in Binance.US as security. This equity, according to the letter, is valued at around $4.5 billion based on a funding round conducted two years ago.
The judge, however, suggested that Zhao could pose a flight risk if allowed to travel to his home in Dubai, where his family currently resides.
On November 21, Zhao admitted to failing to maintain an effective anti-money laundering program at Binance. He also reached a $4.3 billion settlement with the U.S. government for allegedly allowing individuals involved in illicit activities to transfer funds through the exchange. As part of the settlement, he stepped down as the CEO of the crypto exchange.