There are a lot of differences between Changpeng Zhao and Sam Bankman-Fried, and now we can add one more to the list: the amount of time they’ll serve for their crimes. Bankman-Fried got 25 years; Zhao got four months.

There’s more. Zhao appeared in court in a tailored navy suit with a light blue tie when he spoke in his own defense. Bankman-Fried was shackled and in prison garb.

Bankman-Fried defrauded people, pleaded not guilty, repeatedly perjured himself in court, got convicted on seven counts, and then gave an absolutely bizarre speech during his own sentencing hearing that made the judge think he’d be likely to re-offend. (This is to say nothing of his pretrial antics.) By contrast, Zhao pleaded guilty in a deal with the government and expressed contrition. 

Yes, those things are for sure different. But are they more than 24 years different?

Zhao’s guilty plea — to one count with a maximum sentencing guideline of 18 months — was the result of a pretty sweet deal. He also had to pay a mere multimillion-dollar fine (a pittance to a man worth an estimated $33 billion) and step down as CEO of Binance. But during his hearing, I was struck by repeated references to a sealed matter that was a mitigating factor on sentencing and significant emphasis on the word “cooperation.”

If the government had wanted to throw the book at Zhao, it probably could have. The government’s sentencing memo alleges sanctions violations amounting to more than a billion dollars on Binance. In court, Judge Richard Jones made reference to “billions of dollars of Bitcoin” transacted with “darkweb markets.” The amounts were so significant that the government asked for twice the amount of time recommended by the sentencing guideline. 

Zhao is one of the richest men on Earth and can afford the best lawyers money can buy. No doubt they worked wonders for him. But the US government is also a very powerful entity, and the court filings made in this case, the SEC case, and the CFTC case suggest it had ahold of some very damning stuff written by Zhao himself. So the fact that Zhao managed to make a bargain where he copped to one charge — with a short sentence! — seems significant. It suggests he had some leverage.

Naturally, I wonder what it was. 

As a part of the agreement, Binance now has an “independent compliance monitor” inside the company. I assume that means every governmental alphabet soup agency now has eyes on every trade made on the exchange, both in the past and for the next three years, along with identifying information as required by the exciting new anti-money laundering measures at Binance. That kind of surveillance is not nothing for the United States government.

But on the other hand, terrorist groups, including al-Qaeda and ISIS, traded Bitcoin on Binance. So, too, did the military arm of Hamas.

Sure, there’s no evidence that Zhao knew those groups — as well as hackers, money launderers, and other unsavory characters — were trading on Binance. He just didn’t care who was trading there as long as the business grew. The exact nature of Zhao’s cooperation is likely what’s under seal, but the scale of alleged criminals trading on Binance suggests that Zhao’s information must be significant, maybe even geopolitically significant.

I don’t know if it’s Iran or North Korea, though plausibly, there could be useful information on both of those countries. In court, I found myself wondering if there’s information on China up for grabs as well. 

The US’s rivalry with China has only been heating up over the last several years — the AI chip ban is only the latest part of the saga. It’s an open secret that cryptocurrency is a major avenue of Chinese capital flight, even though crypto is banned in mainland China. I can imagine a world in which a valuable intelligence target is told to cooperate with the US if they don’t want their illegal Bitcoin reported to the Chinese government. 

Whatever that information is, it’s significant enough to get Zhao only four months in prison, while Bankman-Fried will languish for most of his adult life. Zhao is one of the wealthiest men in the world, and there aren’t a lot of things bigger than he is to be worth that kind of sweetheart deal. But maybe that’s also part of the message the US wants to send: cooperate or else.