cryptocurrency Changpeng Zhao, founder and former CEO of the exchange Binance, will be sentenced this Tuesday (tomorrow) in a US court in Seattle. In a recent sentencing memo, the Department of Justice (DOJ) recommended a three-year prison sentence, citing the scale of the misconduct.
However, forecasters at cryptocurrency-based prediction market platform Polymarket believe Zhao could be released much sooner. Shares of “Yes” for the “less than six months” contract were trading at about 42 cents on Monday, suggesting a 42% chance Zhao will exit in less than six months. Each share pays $1 if the prediction comes true, or $0 if it doesn’t.
Transaction levels also show that Zhao has a 17% chance of serving 6-11 months in prison and a 19% chance of serving 12-17 months. Overall, the market projects a roughly 96% chance that Zhao will be out in less than two years. There’s a less than 2% chance he’ll get a 30-35 month sentence, which is consistent with what federal authorities are demanding.
Forecasters may be relying on letters of support to persuade the presiding judge to significantly reduce the sentence sought by the Justice Department. Signatories of these letters include former U.S. Ambassador to China Max S. Baucus, professors from Columbia and Zhao’s alma mater McGill Universities, Morgan Stanley Chief Executive Sean Yang and members of the ruling family in the United Arab Emirates.
In his own letter, Zhao acknowledged his failure to establish necessary compliance controls at Binance. “There is no excuse for my failure,” he wrote, noting that this would be his “only encounter with the criminal justice system.”
*This is not investment advice.
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