Title: CZ Sentenced to Three Years in Prison with Support from 161 Letters
Note: On April 24th, the U.S. Department of Justice announced that Binance founder and former CEO, CZ, has been sentenced to three years (36 months) in prison. The reason given by the Department of Justice lawyers is that CZ assisted Binance in violating federal sanctions and money laundering laws, and they believe he should face a greater punishment, thus increasing his sentence.
Prior to the trial, CZ wrote a letter to Judge Richard A. Jones, who was responsible for the case, apologizing for his “wrong decisions” and acknowledging that he must take full responsibility for his actions.
In addition to CZ’s apology letter, there were 161 support letters from his family, friends, and others, which shed light on the true nature of CZ.
CZ’s sister, Jessica Zhao, former Managing Director at Morgan, expressed that although her brother made mistakes, he has always been dedicated to helping others in his life. She also mentioned the FTX incident, emphasizing that CZ ensured Binance never misused any customer funds. CZ’s children, Ryan and Rachel, who are currently studying at universities in the United States, hope that the judge will not define CZ’s character based solely on this incident.
One of the most remarkable letters came from He Yi, co-founder of Binance and mother of three children, who wrote:
“If the cryptocurrency industry is compared to the Wild West, then CZ is its guardian.”
“For CZ, whether poor or wealthy, he takes charity seriously, assuming social responsibility, because he is kind-hearted and has a humanitarian spirit.”
Finally, He Yi stated, “Today, it is a sense of responsibility that made him choose to face trial, but he should never be considered the same as those evil murderers, robbers, and fraudsters. I sincerely hope that Judge Jones can open the eye of God, be all-knowing, and make a fair judgment after seeing the complete CZ.”
Full text of He Yi’s letter: What kind of person is the real CZ?
Below is the full text of He Yi’s letter:
Dear Judge Jones,
Thank you for taking the time to read this letter. I am Zhao Changpeng’s (CZ’s) business partner and the mother of his three children. I hope this letter can help you understand a more authentic CZ.
In the spring of 2014, I met CZ at a blockchain public event held at a school. We called him CZ, which is an abbreviation of his real name, unlike the anonymous aliases many people use. That day, CZ was invited to speak spontaneously because the organizers discovered that he worked for the most popular Bitcoin wallet at the time, blockchain.info. He passionately explained blockchain technology and the principles of Bitcoin to everyone. At that time, he had just sold his house to buy Bitcoin, but due to the price drop, his assets shrunk significantly. However, this did not diminish his passion for blockchain technology. His speech was filled with idealism about how blockchain technology could bring positive changes to the world, which greatly influenced and inspired me.
Later, CZ chose to enter the cryptocurrency field and founded Binance. Of course, he wanted the company to succeed, but he is not someone whose ultimate goal is to make money. He genuinely hopes to use technology to promote progress in the world.
In the summer of 2014, CZ’s years of accumulated matchmaking and trading skills were not being fully utilized at Blockchain, so after my repeated invitations, he joined the cryptocurrency trading platform where I worked, OKCoin. At that time, the cryptocurrency industry had entered a downturn, and amidst the industry’s lamentations, a community member unfortunately fell ill with leukemia and could not afford his medical expenses. He publicly initiated a fundraising campaign. Despite CZ’s personal assets having shrunk significantly, he actively participated in donations. Unfortunately, the community member still passed away.
Inspired by this incident, CZ and I jointly launched the “Love BTC” charity project. He built a website and a public Bitcoin wallet address. We raised funds through social media auctions of clothing, etc., and directly converted BTC into goods for the beneficiaries.
For this, CZ also wrote a paper introducing how blockchain technology could achieve 100% transparent charity work, ensuring that the ultimate beneficiaries receive 100% of the proceeds and that no donations are eroded by intermediary management fees. This paper can be found on GitHub, timestamped in April 2014, and it is the precursor to Binance’s charity work.
This was three years before Binance was established, and CZ was not wealthy at that time. Many people believe that charity is merely a means to gain fame, a way to offset taxes, or something they will do when they achieve financial freedom. However, for CZ, regardless of poverty or wealth, he takes charity seriously, assuming social responsibility because he is kind-hearted and has a humanitarian spirit.
In August 2017, which was my first month at Binance, a young user approached me, saying that he had mistakenly sent thousands of dollars to a Binance wallet address, but Binance did not support that token. This was a common mistake in the early days of the industry.
According to the industry’s practices at the time, individuals were responsible for their own mistakes. However, for this young person in his early twenties, those thousands of dollars could have been his family’s annual income or his entire university tuition, his future hope. After a brief discussion with CZ, he mobilized our limited development resources and quickly helped the user recover the assets. This was the first instance of a cryptocurrency exchange assisting a user in retrieving funds sent to the wrong address.
This initial incident led to countless similar cases. Under CZ’s guidance, Binance has helped over 180,000 users recover assets totaling more than $441 million. This is a project that consumes significant resources and does not provide a worthy return on investment. However, we are able to ignite hope for our users in their moments of despair. Even today, publicly listed exchanges like Coinbase still do not offer this service. In this emerging Wild West, where countless industry practitioners play the role of predators, CZ has always insisted that we should do the right thing: protect users.
In early 2018, as the price of Bitcoin rose above $20,000, investor enthusiasm gave rise to a large number of scams. One day, a group of Chinese users approached me, pointing out that they had been enticed to invest in a project by an account on social media. After sending the money, the person disappeared. However, based on publicly available blockchain information, the funds had just been transferred to Binance. According to the enforcement process of most platforms today, users need to first report to the police, who then provide a cooperation letter for freezing the funds. However, at that time, China had banned cryptocurrency trading, and Chinese police did not handle such cases.
CZ said to us, “Do the right thing.” We temporarily froze the stolen funds, and then organized multiple phone calls between the victims and the fraudster. In the end, the fraudster returned the money to the users, and the fraudster closed the account. This is just one example among the countless instances where CZ persisted in fighting against wrongdoers. In the past year, Binance has cooperated with law enforcement agencies in more than 58,000 investigations, many of which were initiated by Binance itself.Department initiates investigation, which is why millions of community users and ordinary people consider CZ as the hero of the industry, despite mainstream media’s attempt to portray CZ as an evil villain because CZ has always had his own insistence on justice. If the cryptocurrency industry is compared to the Wild West, then CZ is the guardian in this wilderness.
Since 2019, the company’s personnel has been growing rapidly, and the team composition is very globalized and diverse. During this period, there are Ivy League graduates from Wall Street elites, as well as dropouts from Europe, active NGO fighters from Africa, and young men from Southeast Asia who do not want to be fishermen in the countryside. It can be said that CZ truly treats everyone equally regardless of race, belief, gender, education, or family background. Whether it is the house of a junior employee in Southeast Asia destroyed in a fire, or the Covid pandemic sweeping the world causing a shortage of epidemic prevention materials for employees, or even the war between Russia and Ukraine posing a danger to employees, CZ spares no expense in helping employees. For a company’s boss, it is not uncommon to spend millions of dollars to help talented individuals in difficult situations, lead their families out of unstable living environments, and continue to distribute allowances. When CZ makes these decisions, he does not consider their background or rank, which also covers a large number of junior employees who are easily replaceable. These employees generally find it easy to find alternative candidates, but CZ’s decision is motivated by one reason: they need support.
CZ’s leadership style may not meet the traditional expectations of an excellent CEO. His commitment to transparency and fairness often conflicts with the power expectations of a small group of employees accustomed to elite corporate environments. This has led to some resentful employees leaving the company and making unfounded accusations to the media. Although these reports sometimes make me feel frustrated, CZ has always shouldered this burden and continued to support justice and equality because he understands that true fairness can sometimes be unfair to a few privileged individuals.
In November 2022, FTX faced a crisis and Sam (SBF) made a final plea to CZ. Without obtaining any valid reports and documents provided by SBF, CZ convened a management meeting to decide whether to rescue FTX.
He said, “We don’t need FTX as a company. We are rescuing FTX to save this industry. We should save FTX.”
Although the deal was ultimately abandoned, subsequent publicly available information revealed that multiple companies associated with FTX were misappropriating user assets, which astonished CZ. CZ believes that transparency is a better solution, so he publicly released Binance’s trading platform wallet address and launched a product that allows users to independently verify the synchronization of their account funds and online wallet addresses to demonstrate Binance’s transparency, thereby further promoting industry self-regulation.
So far, CZ and I have experienced the ups and downs of this industry together for ten years. These ten years have been a decade of dramatic changes in the industry, with Bitcoin rising from a low of a few hundred dollars to over $40,000. We have seen numerous celebrities fall from grace and countless well-known institutions collapse. Most of the time, these people were self-proclaimed geniuses, talented but disregarding the law, thinking they could deceive the public or escape legal sanctions. But CZ is not like that: he is honest, kind, sincere, intelligent, and very hardworking. Due to work reasons, CZ has undergone two spinal surgeries in 2020 alone, and he did not stop working even during the 18 months he spent repeatedly lying in bed.
As CEO and largest shareholder for the past six years, he has been receiving a salary lower than that of subsequent senior executives introduced by the company. He has never taken a dividend or cashed out for himself. This time, in order to keep Binance operating, he chose to fly to the United States to plead guilty. He always chooses to sacrifice himself for the sake of the public interest and achieving Binance, and when it comes to choosing between Binance and its users, he chooses the users.
As CZ’s partner, I know how he has earned the respect of the community. Perhaps it was when the Chinese government banned Bitcoin trading platforms and other project parties took advantage of the situation to make a profit, CZ chose to refund users at a higher price. It may also be when the theft incident occurred at Binance, CZ immediately disclosed the information and took full responsibility. Furthermore, when numerous project parties issued coins only to become wealthy by selling them, CZ helped users track down scammers and hackers in the industry, even if some cases had nothing to do with Binance but were driven by his sense of mission and responsibility to the industry.
As CZ’s life partner, I have known him for nearly ten years, so I understand his unknown side. He is completely ignorant of the jewelry, luxury goods, luxury cars, and art auctions that rich people are enthusiastic about. He leads a simple life, buying affordable clothes from Amazon, riding a balance bike to meetings, and enthusiastically showing reporters his 6-seater Toyota van, which was later publicly mocked by reporters. His purchases are based on efficiency and interest, and he has no fanatic desire for money, fame, or enjoyment. He wants to live a meaningful life.
At the same time, he always tries to take care of his friends’ feelings as much as possible, regardless of their occupation or social status. He also makes every effort to maintain high-quality interaction with his three young children amidst his busy work. The children are close to him, and now they always ask, “Daddy, why aren’t you at home? When can Daddy come back?”
Of course, I am not saying that CZ has not made mistakes, but his biggest mistake is ignorance. As a startup company without a glamorous background, the founding team members have no legal background, and even most of the early management team members, including myself, cannot read English. In the absence of experience and legal knowledge, CZ has won users’ trust with fairness, integrity, and a sense of responsibility to the industry, but he has also made mistakes.
Regardless, the mistakes have been made, and both Binance and CZ have paid a huge price. CZ has said before, “No one wants to be a hero because no one is born wanting to stand at the forefront and block arrows. Heroes are forced to protect their families, communities, ethnic groups, and homelands and do the right thing. They have to become heroes in the process.” I humbly hope that Judge Jones can consider comprehensively that in such an early and chaotic stage of the cryptocurrency industry, where there is no consensus on how to regulate the industry or define it in the United States, a founder who has never managed a company of this scale will inevitably encounter blind spots. If CZ knew the severity of the situation, he would have been vigilant from day one and blocked any US users. He does not want to be a hero, and of course, he has no intention of being a criminal. All his actions follow the logic of universal humanitarian principles and do his best.
Today, it is a sense of responsibility that has led him to choose to face a court trial, but he should absolutely not be regarded as the same as those evil murderers, robbers, and fraudsters. I sincerely hope that Judge Jones can open the eyes of God, be omniscient, and make a fair judgment after seeing a more complete CZ. If needed, you can contact me at any time for more details.
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