The Binance founder's legal strategy was vindicated by his four-month sentence.

Changpeng "CZ" Zhao, who created the cryptocurrency exchange Binance in 2017, was found guilty and given a four-month sentence in federal jail for his ostensibly small involvement in the illicit activities at the company.

Judge Richard Jones of the U.S. District Court in Seattle notably cited CZ's numerous charitable efforts and his readiness to take accountability, all the while downplaying any information that CZ had that Binance was deliberately committing felonies.

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The penalty is greater than what CZ's attorneys had requested (they were negotiating for house arrest).

at most), but less than both the official sentencing guidelines (around one year) and what U.S. Department of Justice prosecutors sought (36 months). We don’t know exactly why CZ received the sentence he did.

But it’s notable that, instead of fighting extradition, CZ willingly came to the U.S. to stand trial. The outcome is the latest signal that if caught doing a crime, cooperate, cooperate, cooperate

This is the plain and simple understanding drawn from comparing CZ to Sam Bankman-Fried, the founder and fraudster behind rival exchange FTX, who, in March, was sentenced to 25 years in prison, and never really admitted to his multi-billion dollar theft of client funds.

CZ, of course, wasn’t accused of stealing from customers, but instead of failing to implement the necessary compliance infrastructure expected of a money transmitter.

For a prehistoric, i.e. pre-crypto, comparison: 20 years ago, Martha Stewart showed no remorse after being convicted of conspiracy and obstruction of justice, maintaining her innocence and even comparing herself to Nelson Mandela. She served five months in prison – a month more than CZ will

It’s also worth noting that in addition to Zhao’s prison sentence to be served in Washington State, he paid a $50 million fine alongside the gargantuan $4.3 billion settlement agreement Binance paid.

Dennis Kelleher, co-founder of Better Markets, a public service nonprofit, says the relatively short sentence proves that “crime pays.”

Zhao will be able to keep his ownership stake in Binance, the world’s largest crypto exchange by volume and vast personal wealth. DOJ attorney Kevin Mosley echoed this point:

“Breaking U.S. law was not incidental to his plan to make as much money as possible. Violating the law was integral to that endeavor.”

The family man CZ,

Whether or not you see the punishment as fitting the crime, Zhao’s appearance in court was revealing. Despite his influence, Zhao has lived a largely private life.

I, for one, was unaware the former executive had a college-age son, who sat beside Zhao’s mother and nephew during his sentencing hearing. Dozens of letters written in support of Zhao’s character described him as a “family man.”

Zhao’s testimony at several points during the case emphasized his guilt over his actions (and inactions) and his willingness to take responsibility for mistakes made while he led Binance.

In contrast, as the judge overseeing SBF’s case noted, SBF never offered "a word of remorse for commission of terrible crimes

It’s worth noting CZ wasn’t alone in complying with the U.S. government, but Binance itself also bent the knee.

Once an entity that bragged about not having a home base, Binance has agreed to admit an “independent compliance monitor” to oversee the transactions that happen on the platform for the next three years.

That could be invaluable data for government agencies looking to track down criminals leveraging blockchains

Given that states like Venezuela, Iran and North Korea have all turned toward crypto as a means of funding, this information could even be, as The Verge’s Liz Lapatto points out, “geopolitically significant.” Who knows. What’s clear, at this stage, is it pays to cooperate.