Letters of support for Binance co-founder CZ have poured into a Washington court requesting leniency in his sentencing tomorrow.
Zhao’s lawyers have requested their client be sentenced to probation only, but prosecutors are asking the judge to send him to prison for three years.
Violating the Bank Secrecy Act (BSA), which Zhao pleaded guilty to last November, is usually punished by probation-only sentences
More than 160 of Changpeng “CZ” Zhao’s loved ones, friends and colleagues have written to a Washington judge ahead of the Binance founder and former CEO’s sentencing tomorrow, asking for leniency and painting a picture of Zhao as a devoted father and friend, and a “geeky” tech nerd who shuns luxury purchases despite his immense personal wealth.
Zhao, 47, pleaded guilty last November to one count of violating the Bank Secrecy Act, agreeing that he failed to implement an effective anti-money laundering (AML) program at Binance in the early days of the exchange.
The Department of Justice (DOJ) has asked the judge to impose a three year prison sentence – double the 18-month maximum established by the sentencing guidelines and harsher than comparable sentences, which often result in a sentence of probation or time served.
In their sentencing memo filed last week, Zhao’s lawyers pointed out several cases where a violation of the BSA resulted in probation-only sentences, including the 2014 case U.S. v. Miller, in which a CEO of a domestic financial institution was sentenced to probation for failing to implement an effective AML program or file suspicious activity reports (SARs).
Zhao’s lawyers have recommended that their client be sentenced to probation, not jail – a sentence which would closely mirror that of BitMEX co-founder Arthur Hayes, who pleaded guilty to the same crime in 2022 and was sentenced to six months of house arrest and two years of probation.
“This is a high-profile case, to be sure. But Mr. Zhao is not a symbol,” Zhao’s lawyers argued. “He is a devoted father, a philanthropist… He has already shown remorse for his offense and, more importantly, has remediated.”
The 161 letters filed with the court served to back up Zhao’s lawyers claims, but also provide an unprecedented glimpse into the private life and personal history of the notoriously private Binance founder.
Humble origins
Zhao, now worth over $40 billion according to Bloomberg’s Billionaires Index, was once a first-generation immigrant to Canada who was the poorest in his high school friend group and worked part-time at McDonald’s “to support his family and to have spare allowance to spend,” Ted Lin, a high school friend and later colleague at Binance, said in his letter.
His friends from high school recall Zhao as a top student and formidable athlete, who became captain of the school volleyball team after teaching himself how to play the sport by reading library books on the subject, Lin’s letter said
Family man
Letters to the court also revealed Zhao to be the father of five children – two adult children from his marriage to Weiqing “Winnie” Yang, who are both currently enrolled at U.S. universities, and three young children with Binance co-founder and current partner Yi He.
According to both Zhao’s current and former partners, he is a devoted father.
In her letter to the court, Zhao’s wife Yang said that, even when Binance was going through massive growth, he took the time to spend time with his adolescent children, flying to see them in Tokyo when they had issues in school and going camping in the Japanese countryside with his middle school-aged son during Boy Scout trips.
Yang also celebrated her estranged husband’s philanthropy – including donations to earthquake victims in Turkey and building schools in Africa, saying “he has done so many things that he may not even remember them.”
He, his current partner, said her children are “very close” to Zhao, and have suffered from his absence over the past five and a half months.
“Now they are always asking: Why isn’t Dad home? When can Dad come back?,” He wrote.
‘Apathy toward hedonism’
He also told the court about Zhao’s disinterest in luxury goods – something that was also mentioned by many of the Binance co-founder’s other family members, friends and colleagues.
“He knows nothing about the jewelry, luxury goods, luxury cars, and art auctions that rich people are passionate about,” He wrote, adding that Zhao purchases his clothes on Amazon, rides a scooter to meetings and drives a Toyota minivan.
Another friend of Zhao’s recollected visiting him at home in 2021, when crypto trading volumes were hitting all-time highs, and being surprised to find him “living under his means” in a three-bedroom apartment in Singapore strewn with children’s toys and operating Binance from his dining room table.
The description of Zhao’s purported “apathy toward hedonism,” as another friend described it, mirrors similar claims by FTX founder Sam Bankman-Fried’s family and friends ahead of his sentencing.
In their own letters to the judge, Bankman-Fried’s family attempted to paint the disgraced former FTX CEO as completely uninterested in wealth or luxury or the company of celebrities that were paid to endorse his company. The judge was apparently unconvinced, and sentenced Bankman-Fried to 25 years in prison for his crimes.
Whether or not the judge in Zhao’s case will feel differently will be determined tomorrow, though Zhao’s case has other differences. Bankman-Fried did not accept responsibility or show remorse, according to the judge overseeing his case, while Zhao pleaded guilty last year.
The charges are also different; Zhao’s exchange never filed for bankruptcy and is continuing to operate today, while Bankman-Fried’s notably saw customers worldwide lose access to around $8 billion in funds.
