At the court hearing, prosecutors argued for him to receive an actual prison term, stating that a suspended sentence might inspire others to break the law.
Zhao’s lawyers emphasized his active cooperation with the investigation and the US authorities. They pointed out that Zhao voluntarily traveled to the US to participate in the legal process and no longer controls Binance.
Zhao’s lawyers also noted that in similar cases, such as with the BitMEX exchange and its co-founder Arthur Hayes, the court did not impose prison sentences. Hayes admitted guilt, left the company, paid a $10 million fine and received a two-year suspended sentence.
Zhao himself stated that he failed to establish proper Know Your Customer/Anti-Money Laundering (KYC/AML) procedures at Binance. However, he made efforts to rectify this and encouraged the exchange to cooperate with the US government. The judge acknowledged that Zhao had taken significant steps to cooperate with law enforcement. Nevertheless, he also emphasized that Zhao was the head of Binance and was responsible for decision-making.
Zhao stepped down as head of Binance in the fall of 2023 and pleaded guilty to money laundering and violating banking secrecy laws. After the trial, he was released on bail of $175 million.
The trial was originally scheduled for late February, but was postponed to April 30, 2024. The court received 161 letters from Zhao’s friends and relatives describing him as a good person.
