- Binance co-founder Changpeng Zhao “CZ” will be sentenced in a U.S. court on Tuesday with the DOJ proposing a three-year prison.
- Binance regulatory woes have extended to Canada and the Philippines for selling crypto derivative products to retail investors without registration.
Binance founder and former CEO Changpeng Zhao commonly referred to as “CZ” will know his fate later today in a U.S. court in Seattle. CZ will be sentenced for his involvement in the financial crimes orchestrated by the Binance crypto exchange.
The Department of Justice (DOJ) has recommended 36 months in jail citing the scale of his misconduct. As CNF reported, U.S. regulators allege that Binance, its CEO, and its American branch inflated trading activity, misused customer funds, failed to properly restrict US users, and deceived investors about how they monitor their platform for unfair trading.
In a pre-sentencing apology letter, CZ has called for forgiveness and a fresh start. “Rest assured that [this]will never happen again. Please accept my assurance that this will be my only encounter with the criminal justice system …” the former CEO wrote.
CZ received a wave of support through letters submitted to the court. These included endorsements from his family and friends, Binance employees, and even users of the platform. Notably, letters also came from respected figures within the cryptocurrency industry and even government officials.
Although the DOJ is recommending three years, many in the crypto industry are in his support and anticipating a lighter sentencing. Polymarket, a prediction market platform using cryptocurrency, allows users to bet on the length of CZ’s sentence. As of Monday, the odds suggest a high likelihood (around 96%) that CZ will be out of jail in less than two years. The most popular prediction (42%) is that he’ll be released in under six months, with chances decreasing for longer sentences.
Binance Facing Regulatory Scrutiny Amidst CZ Sentencing
As the crypto community eagerly awaits the sentencing, more trouble is brewing for Binance. A Canadian court has certified a class-action lawsuit against, the world’s leading cryptocurrency exchange by trading volume. The lawsuit accuses Binance of violating Canadian securities laws by selling cryptocurrency derivative products to everyday investors without proper registration.
Additionally, the Philippines’ financial regulator, the Securities and Exchange Commission (SEC), has cracked down on cryptocurrency exchange Binance by requesting Google and Apple to delist the Binance app from their app stores in the Philippines.
These developments have led to a price plunge on Binance Coin (BNB) which is backed by Binance. At the time of writing, the digital asset is trading for $572 after a 3% fall in the last 24 hours. This sees the altcoin extend its weekly losses by 6%.
While the sentencing of CZ is a loss to Binance and the crypto community, market prices have shown resilience with marginal changes by large-cap coins. However, CZ has recently launched a free basic education platform dubbed Giggle Academy whose future now hangs in the balance.
[thrive_leads id="228374"]
