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- Lack of legal expertise and compliance issues at Binance highlighted serious concerns by co-founder He Yi.
- CZ expresses remorse and accepts responsibility, appealing for a second chance and emphasizing compliance changes at Binance.
- Prosecutors push for harsher penalties, while CZ’s family highlights his role as a caring parent and generous philanthropist.
He Yi, the co-founder of Binance, recently emphasized that Changpeng Zhao (CZ), Binance founder, apparent lack of awareness has had serious consequences for him and the company. Yi pointed out that despite Zhao being the only English-speaking member in the early management team, the absence of legal expertise within the startup has been a notable issue.
Binance co-founder He Yi said that CZ’s biggest mistake was ignorance. As a startup with no fancy background, the founding team members had no legal background, and even most of the early management team members, except CZ, could not even read English. Both Binance and CZ have…— Wu Blockchain (@WuBlockchain) April 25, 2024
Addressing these concerns, CZ penned a letter to Judge Richard A Jones of the US District Court for the Western District of Washington on 24 April, expressing remorse for his actions and accepting full responsibility. He acknowledged the need for implementing compliance changes at Binance sooner, emphasizing the subsequent implementation of stringent controls during his tenure.
Furthermore, CZ emphasized his voluntary surrender and acceptance of responsibility in the ongoing case, expressing a desire to resolve matters before the court to pursue new opportunities. He appealed for a second chance, highlighting his unconventional career path marked by simplicity and integrity.
CZ has apologized in a letter to the judge overseeing his case filed on Tuesday: There is no excuse for my failure to establish the necessary compliance controls at Binance. CZ gave an assurance that this would be his only “encounter with the criminal justice system.” CZ said he…— Wu Blockchain (@WuBlockchain) April 24, 2024
Moreover, CZ’s family, including his wife, two children attending US institutions, and his sister, a former managing director at Morgan Stanley, publicly supported him for the first time among 161 letters seeking leniency. Their testimonials portray CZ as a supportive father and a philanthropist, emphasizing Binance’s charitable efforts.
Despite the pleas from CZ’s legal team, prosecutors are pushing for a harsher sentence of three years imprisonment and a $50 million fine. They argue against probation, expressing concerns about his susceptibility to negative influences in prison.
Although the US sentencing guidelines permit a maximum of 10 years in federal prison for CZ’s offenses, the usual recommendation falls within the range of 12 to 18 months. However, the final outcome remains uncertain as the case progresses, with CZ potentially facing incarceration at the Federal Detention Center (FDC) SeaTac in Washington.
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