CZ on Binance's DOJ Lawsuit: They're not after justice, but a "trophy"

BlockBeats News, April 8th, CZ discussed Binance's U.S. Department of Justice lawsuit in his new book "The Binance Story." He underestimated the situation in a revealing 2020. Four years later, he paid a heavy price for it. CZ later learned that the U.S. prosecutors' common tactic is to first leak information to journalists, publish a negative article, and then use it to initiate an investigation. On May 13, 2021, Bloomberg reported that the Justice Department and the IRS were investigating Binance for money laundering and tax issues. Because he had never been involved in such matters and had a clear conscience, CZ thought it was just another sensationalistic smear piece and didn't pay much attention. Looking back now, he realized that regardless of any criminal evidence, the U.S. DOJ prosecutors had already set their sights on him. They target the individual first and then find a charge. After all, handling a major case significantly boosts performance.

By the end of 2022, U.S. DOJ prosecutors planned to charge Binance with "violating bank secrecy laws" and "money laundering." Binance has always maintained that no one was involved in money laundering.

In early 2023, the U.S. DOJ sought to expedite settlement negotiations. Over the past two years, prosecutors reviewed over 8 million internal Binance documents, while Binance's hired external legal team meticulously examined each one, studying possible attack angles. The lawyers found several unfavorable chat records, including a statement CZ once made: "Better to ask for forgiveness than permission." CZ explained that the context of this statement was the rapid development of the crypto industry, where the SEC and other regulators had not provided clear regulatory guidelines for a long time, often requiring the industry to proceed by trial and error. However, in court, the U.S. DOJ used this statement as an opening to go after him, claiming it reflected his attitude towards the law.

Initially, Binance's lawyers estimated that the settlement fee could be between $800 million and $1 billion. CZ gradually realized that the size of the fine was not based on the severity of the mistake but on how much money was involved. This is also why many U.S. prosecutors like to target large companies; they are not after justice but rather a "trophy."