Changpeng Zhao says he viewed confronting the case as a matter of personal responsibility rather than avoiding prosecution.
This week, Binance founder Changpeng Zhao (CZ) finally revealed why he chose to face US prosecutors during his AML violation case despite holding UAE citizenship that could have kept him from the grasp of US law enforcement.
His account offered a rare explanation of his thinking before a four-month prison sentence and the end of his leadership at Binance.
CZ Says Running From the Case Was Never an Option
Zhao talked about the matter in a fireside chat with Anthony Scaramucci on August 19 at the Wyoming Blockchain Symposium in Jackson Hole, stating that he had become a citizen of the United Arab Emirates approximately six months before the Binance case became public and that the country has no extradition treaty with the USA.
He could have stayed in the Middle East and avoided US courts altogether, but he said that option didn’t feel honorable to him.
“Actually, I was granted citizenship of the UAE, but I didn’t want to leverage that,” Zhao explained. “That’s just the wrong thing to do.”
According to him, resolving the case one way or the other was better for himself, Binance, BNB holders, and the wider crypto industry.
“When the US government is going after you, you don’t dodge it,” declared the former Binance CEO. “You shouldn’t be hiding or running away from it.”
But on the other hand, Zhao had quite different expectations about the punishment he would face. He told Scaramucci that he never expected to get imprisoned since his case had no fraud, just one Bank Secrecy Act violation.
CZ also compared his sentence with that of former BitMEX executive Arthur Hayes, who received six months of home confinement after pleading guilty to one count of violating the Bank Secrecy Act by failing to establish adequate AML and KYC at his exchange.
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Zhao, meanwhile, got four months in federal prison for fundamentally the same personal offense. And while that was still a much shorter jail term than the three years the Justice Department had recommended, it was certainly more than the no-prison-time his legal team had asked for.
“I think I’m still the single only person that went to jail for a single violation of a Banking Secrecy Act,” he remarked.
A Case That Ended With Prison, Then a Pardon
In the interview, CZ also reflected on Binance’s position at the time of the case. He pointed to its status as the world’s largest crypto platform while stressing that it was neither US-based nor China-based.
“We’re not US-based, we’re not China-based, but look Chinese, so kind of an easy target,” he said. “I don’t blame them. It is what it is.”
The 48-year-old stepped down from his position at the helm of Binance after the exchange agreed to a $4.3 billion settlement with US authorities.
He himself also paid a $50 million personal penalty before heading to the Federal Correctional Institution (FCI) Lompoc II in Santa Barbara, California, to serve out his sentence, leaving the facility near the end of September, 2024.
A year after that, President Donald Trump gave him a full and unconditional pardon.