Binance’s CZ Will Spend Less Than a Year in Prison, Polymarket Traders Bet

Binance’s founder and former CEO, Changpeng “CZ” Zhao, is set to face sentencing in a U.S. court in Seattle on Tuesday. The Department of Justice, in a recent sentencing memo, recommended a three-year prison term for him, citing the magnitude of his wrongdoing. However, Polymarket bettors seem to believe he’ll be released much sooner.

Shares for the “less than six months” contract on the crypto-based prediction market platform were trading at around 42 cents on Monday, indicating a 42% likelihood that CZ will serve less than six months. (Each share pays out $1 if the prediction materializes and nothing if it doesn’t.) Trading data suggests a 17% chance of a 6-11 month sentence and a 19% chance of a 12-17 month sentence. Overall, the prevailing sentiment indicates a 96% probability that CZ will be released within two years, with less than a 2% chance of receiving a 30-35 month sentence, as proposed by the DOJ.

Traders may be banking on letters of support to sway the presiding judge into significantly reducing the sentence from the DOJ’s recommendation. Notable figures who signed such letters included Max S. Baucus, former U.S. Ambassador to China; professors from Columbia and CZ’s alma mater, McGill Universities; Morgan Stanley Managing Director Sean Yang; and members of the ruling family in the United Arab Emirates.

In his own letter, CZ acknowledged his failure to implement necessary compliance controls at Binance, pledging that this would be his sole “brush with the criminal justice system.”