Binance founder Changpeng Zhao’s sentencing hearing is pushed to April with Sam Bankman-Fried’s just weeks away
The criminal sentencing of Binance founder Changpeng Zhao, or “CZ,” has been postponed by two months to April 30, according to a notice from a Seattle federal court.
The Canadian national faces money laundering charges and is currently free on a $175 million bond in the U.S. The docket entry posted Monday didn’t give a reason for the delay. The Department of Justice didn’t immediately respond to a request for comment from Fortune. Zhao’s defense lawyer, William Burck, declined to comment on the postponement.
According to federal guidelines, a maximum sentence for money laundering is 18 months, although the prosecution stated in a November filing that “the United States is free to argue for any sentence up to the statutory maximum of ten years,” suggesting Zhao may face a harsher term.
Zhao pleaded guilty to failing to maintain an effective anti-money laundering program at Binance, the world’s largest cryptocurrency exchange, last November.
As part of the plea, Zhao stepped down as Binance’s chief executive officer and paid a $50 million fine. Meanwhile, the exchange paid $4.3 billion in fines and restitution as part of its guilty plea to conspiracy to conduct an unlicensed money-transmitting business. Zhao had previously attempted to lift his travel restrictions to visit his Dubai residence, but they were denied by the presiding judge, who cited flight risk concerns, Bloomberg reported.
“Binance was allowing illicit actors to transact freely, supporting activities from child sexual abuse to illegal narcotics to terrorism,” Treasury Secretary Janet Yellen said in a statement after the company and Zhao pleaded guilty.
Former rival
Meanwhile, the founder of the bankrupt exchange FTX, Sam Bankman-Fried, or “SBF,” is scheduled for his own sentencing on March 28, 2024, over “one of the biggest financial frauds in American history,” according to U.S. Attorney Damian Williams.
Last November a New York jury found Bankman-Fried guilty on all seven criminal charges brought against him by the DOJ, including defrauding customers and investors.
At just 32 years old at the time of his sentencing, Bankman-Fried could face up to 110 years behind bars, according to New York sentencing guidelines. SBF was set to face a second trial for criminal charges, but the DOJ decided to forego an additional set of proceedings as much of the evidence that would have been presented in a second trial had already been submitted during his first, according to a note by Judge Lewis Kaplan in December.
Terrence Yang, managing director at Swan Bitcoin and former senior counsel in global markets and investment banking at Merrill Lynch, estimates Bankman-Fried being sentenced to 21 to 30 years. In Zhao’s case, he estimates 18 months followed by a federal compliance monitor with unfettered access for five years.
Yang said he also sees the DOJ possibly asking each former CEO for information on the stablecoin issuer Tether, as there’s growing pressure from U.S. lawmakers to take action on illicit uses of stablecoins.
“I can see President Biden’s administration leaning on prosecutors to push for either or both to cough up something that can be publicized as a big win,” Yang told Fortune, adding that it could affect each man’s sentence. “It depends on how much they are cooperating with the DOJ and how useful their cooperation, if any, is deemed to be.”
SBF at MDC
The dramatic collapse of FTX turned Bankman-Fried’s criminal proceedings into a spectacle. Even his bail conditions proved dramatic, with Kaplan remanding the crypto founder to the Metropolitan Detention Center in Brooklyn after he leaked private writings from Caroline Ellison—his onetime girlfriend and the CEO of FTX’s trading firm, Alameda Research—to the New York Times.
The MDC houses inmates with a variety of criminal histories, including terrorism, organized crime, and drug smuggling, a report from the DOJ shows. Inmates currently at the facility include Juan Orlando Hernandez, a former president of Honduras who’s pleaded not guilty to drug-trafficking charges, and Guo Wengui, a Chinese businessman who’s pleaded not guilty to fraud charges.
SBF is at the Metropolitan Detention Center, Brooklyn
Most prisoners held at MDC Brooklyn have pending cases in the US District Court for the Eastern District of NY
SBF is in good company. Inmates have included: pic.twitter.com/g6V8EKNdwp
— Sunil (FTX Creditor Champion) (@sunil_trades) August 14, 2023
“[He’s] subsisting on bread and water…sometimes peanut butter,” the defense told a federal judge last August, of Bankman-Fried’s conditions.
The MDC has long been criticized by politicians and activists. In 2019, a federal agency investigated a weeklong power outage that left more than 1,600 inmates in freezing temperatures and without the ability to speak with their lawyers. An investigation by watchdog group American Oversight uncovered public records of excessive force, delays in medical care, and sanitation issues.
