The sentencing hearing for Changpeng Zhao (CZ), the co-founder of Binance, is just around the corner on April 30. The U.S. prosecutors have recommended a 36-month prison sentence for CZ for violating the Bank Secrecy Act, which is double the previously expected maximum of 18 months. In response, 161 letters of support for CZ have surfaced online, flooding social media.
The sheer number of supporters reflects CZ’s deep industry connections and reputation built over the years as a prominent figure in the crypto space. In comparison, the former crypto celebrity Sam Bankman-Fried (SBF) only managed to collect around 20 letters, mostly from his family and friends.
The nearly 350 pages of letters attempt to portray CZ as a person of good character, responsibility, humility, and self-discipline, coming not only from his close friends but also industry executives, including the co-founder of Fosun International, members of the ruling family of the United Arab Emirates, the CEO of Bitfury, the founder of Antler venture capital, and the former U.S. ambassador to China and current member of Binance’s advisory board.
According to the Bloomberg Billionaires Index as of April 24, 2024, the 47-year-old CZ is the 32nd richest person in the world, with a net worth of around $41.1 billion, and Binance remains the largest cryptocurrency exchange globally. However, the letters suggest that CZ is a person with low material desires and is indifferent to wealth, fame, and luxury.
The letters also reveal CZ’s reputation for honesty and integrity, providing insights into some of the early irregularities and “dark histories” of certain projects. For example, when CZ learned about OKX founder Star Xu’s falsified reserve proofs, financial opacity, and the use of bots to fabricate trading volume, he left the company.
Many of the support letters also mention Binance’s and CZ’s extensive charitable donations. Over 50 Binance employees in Ukraine have signed or written letters describing the company’s support for local staff during the Russia-Ukraine conflict.
Despite the compelling letters, the U.S. prosecutors argue that CZ’s violations of anti-money laundering and sanctions laws are “unprecedented in scale” and that Binance operated in a “Wild West” manner, “deliberately disregarding” legal responsibilities. The prosecutors claim that CZ allowed hackers, drug dealers, and sanctions violators to move billions of dollars through the exchange, “significantly undermining” U.S. sanctions on Iran.
The crypto community’s reaction is divided, with some key opinion leaders (KOLs) defending CZ, while others see him as a mere businessman who has exploited the crypto market. Legal experts believe that the evidence of money laundering and sanctions violations will be crucial in the judge’s decision, which may include a combination of probation and home confinement, similar to previous cases involving crypto executives.
The outcome of CZ’s sentencing will have a significant impact on the future of crypto regulations and the industry’s innovative landscape.