WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in connection with the sentencing of Binance’s Founder, Owner, and former Chief Executive Officer, Changpeng Zhao (CZ), for charges brought by the Department of Justice (DOJ):
“’Crime pays’ is the message sent today not by the Judge but by the DOJ’s weak, minimalist sweet deal with Binance’s former CEO, CZ. The Judge had little choice after the DOJ rewarded CZ’s stated criminal strategy of asking for forgiveness once he was caught rather than asking for permission before he knowingly broke the law. Notwithstanding the DOJ’s unseemly and unwarranted bragging at the press conference announcing the charges, it didn’t even charge CZ with money laundering; he was only charged with not having an anti-money laundering program. That’s less than a slap on the wrist.
“The result, in addition to a laughably small fine of $50 million (.01% of his $42.9 billion net worth), is that CZ will now have to serve just 4 months, likely in a friendly, low security prison with ‘some friendly faces.’ And, Binance continues as a thriving business, in which CZ gets to keep his wealth, his ownership of Binance, and his de facto control of Binance through his hand-picked leadership team and his cofounder and partner. And he can return as CEO in just 3 years (as detailed here). As his cofounder and partner recently said, ‘in spirit, [CZ] is still with us, don’t worry about it.’
“That is an egregious miscarriage of justice and sends exactly the wrong message to criminals worldwide. As Binance’s founder, owner, and leader, CZ willfully, knowingly, and intentionally designed and ran Binance to be a crypto money laundering superstore for the most despicable global criminals. One of Binance’s compliance employees went so far as to write Binance needs ‘a banner ‘is washing drug money too hard these days – come to Binance, we got cake for you.’’ Binance didn’t inadvertently or negligently fail to monitor and stop money laundering; it was in the money laundering business, including ‘well over 100,000 suspicious transactions’ linked to ransomware attacks, child sexual abuse, large-scale hacks, the narcotics trade, terrorists and rogue states.’
“Laundering the proceeds of those crimes paid off fabulously for CZ, whose total net worth is an estimated $42.9 billion, putting him 29 on the Bloomberg Billionaires Index. The DOJ fine of $50 million was just .1% of his net worth. Worse, CZ didn’t do this alone, but DOJ choose not to charge even one of the dozens if not hundreds of Binance executives and staff that enabled and facilitated this massive money laundering machine called Binance, not even the compliance officer quoted above who brazenly solicited drug dealers. DOJ let all of them all get away with their crimes and their wealth that those crimes generated. Adding insult to injury, DOJ also let those executives and staff continue to work at Binance where most of them still are today, including CZ’s handpicked CEO successor who is acting unsurprisingly just like CZ.
“Yes, Binance has to comply with an independent monitor for up to five years and that may yield additional charges against individuals and organizations, including some of the global criminals who were laundering money. But that won’t change DOJ’s decision to let everyone other than CZ at Binance get away scot-free. Corporations do not commit crimes; the people who work for them do. From the streets to the suites, the only way to punish and deter crime is to meaningfully and personally punish those individuals who are actually involved in the criminal conduct. That means CZ, his entire leadership team, and numerous other employees throughout the organization should have been prosecuted to long prison sentences and Binance itself probably should have been put out of business. That is what should happen to criminal organizations. Only time will tell if the monitorship results in any meaningful charges against anyone, but, in the meantime, the message the DOJ is sending is unmistakable: crime pays.”
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