CZ Outmaneuvers Bankman-Fried, Amassing Over 160 Support Letters for Sentencing

With over 160 letters of support for Binance's Changpeng "CZ" Zhao, he surpasses Sam Bankman-Fried's limited support. While Bankman-Fried faced numerous victim statements, Zhao's letters highlight his cooperation, acknowledgment of guilt, and crypto advocacy. Despite facing money laundering charges, Zhao's supporters, including industry figures, emphasize his positive contributions, contrasting Bankman-Fried's autism and morality justifications.

Binance's CZ Outmaneuvers Rival Bankman-Fried Again, Amassing Over 160 Letters of Support Ahead of Sentencing

As the disgraced former FTX founder Sam Bankman-Fried languishes in a high-security Brooklyn prison awaiting sentencing for an unprecedented fraud scheme, his one-time archrival, Binance co-founder and former CEO Changpeng "CZ" Zhao, has seemingly outmaneuvered him yet again, garnering an astonishing number of letters of support in advance of his own sentencing for federal money laundering on April 30.

In stark contrast to the mere two dozen letters submitted on Bankman-Fried's behalf, primarily from family and friends, Zhao has received an overwhelming outpouring of support, with over 160 letters advocating for leniency sent to the Seattle court overseeing his case. Notably, there were no letters calling for a harsher sentence, despite the serious nature of the money laundering charges.

The letters supporting Zhao paint a starkly different picture from the damning evidence presented against Bankman-Fried. They highlight Zhao's cooperation with investigators, his acknowledgment of guilt, and his unwavering commitment to advancing the cryptocurrency industry. One friend from his college years wrote that Zhao "truly believed in the utopian vision of decentralization that would allow the democratization of financial services," emphasizing his belief that blockchain technology could empower the marginalized and disadvantaged.

A significant number of letters, including those from Binance employees, implored the judge to spare Zhao from any prison time, citing his extensive cooperation with authorities, his acceptance of responsibility, and his willingness to relinquish his leadership role at the world's largest cryptocurrency exchange by trading volume.

In December 2023, prosecutors with the Department of Justice accepted Zhao's guilty plea to federal money laundering charges. As part of a joint plea deal, Binance agreed to pay a colossal $4.3 billion settlement to resolve separate allegations against the exchange, while Zhao consented to a $50 million personal penalty.

Zhao's supporters include not only friends and family but also prominent figures in the cryptocurrency community, such as Samson Mow of bitcoin-focused firm JAN3; Malcolm Shu of investment firm No Limit Holdings; Phillip Shoemaker of decentralized verification service Identity.com; Wang Jiatian of indexing protocol Hyper Oracle; and Henry Liu of exchange BTSE.

Contrasting sharply with the letters of support for Zhao, those submitted on Bankman-Fried's behalf largely originated from family and close friends, emphasizing his challenges stemming from autism and purported obsession with morality. However, the letters from Bankman-Fried's victims were unsparing in their condemnation.

In one particularly heart-wrenching letter, a former FTX user who lost their entire life savings of over $20,000 due to Bankman-Fried's actions wrote, "I have experienced feelings of betrayal and disillusionment, as I trusted FTX.com to safeguard my savings. The experience has eroded my trust in financial institutions and has made me more cautious and skeptical in my financial decisions."

The rivalry between Zhao and Bankman-Fried reached a boiling point in the fourth quarter of 2022, when Zhao tweeted that Binance would imminently liquidate a large amount of FTX's native FTT token, citing "recent revelations that have come to light." This move followed an earlier offer by Zhao to bail out FTX, which was ultimately rejected.

Zhao's decision sparked a sell-off of FTT, triggering a liquidity crisis at FTX. This came after CoinDesk reported on improper intermingling between FTX and Bankman-Fried's purportedly separate trading firm, Alameda Research. Binance had previously sold its stake in FTX for $2.1 billion in cash and FTT.

Just days after Zhao's tweet, Bankman-Fried was forced to declare bankruptcy for FTX. Shortly before, he tweeted, "at some point, I might have more to say about a particular sparring partner, so to speak...for now, all I'll say is 'well played; you won.'"

Prosecutors are now seeking a three-year prison term for Zhao, double the previous maximum expectation of 18 months anticipated by his attorneys. Notably, Bankman-Fried was recently sentenced to 25 years in prison for his role in the FTX collapse.

As the legal proceedings against Zhao and Bankman-Fried unfold, it remains to be seen whether Zhao's overwhelming support will sway the court. However, one thing is clear: Zhao has once again emerged as the victor in this bitter rivalry, solidifying his position as a dominant force in the cryptocurrency landscape.