Speculation surrounds CZ’s sentencing amid Polymarket Buzz

Polymarket traders speculate a shorter sentence, with a 96% likelihood of release within two years

Changpeng “CZ” Zhao, the former CEO and founder of Binance, will undergo sentencing in a Seattle court on April 30, as per the US Department of Justice's recommendation for a three-year prison term due to his alleged misconduct.

However, speculation is rife among traders on the Polymarket prediction platform, with indications suggesting a much shorter sentence. According to trading data, there's a 69% chance CZ will spend less than six months behind bars, with similar probabilities for sentences ranging up to 17 months.

The data also suggests a 96% likelihood that he'll be released within two years, with less than a 2% chance of receiving the proposed 30-35-month sentence from the DOJ.

Traders are banking on influential letters of support, including endorsements from prominent figures like former US Ambassador to China Max S. Baucus and academics from prestigious universities, to sway the judge towards a significantly reduced sentence.

In his own letter to Judge Richard A. Jones of the Western District of Washington, CZ expressed remorse for the lack of compliance controls at Binance and pledged this to be his sole encounter with the criminal justice system.

Meanwhile, the US Commodity Futures Trading Commission (CFTC) is contemplating stricter regulations on prediction markets, considering a ban on derivatives for betting on US elections among other event contracts. This move comes amid increasing interest in election betting, despite its illegality in most US states and other countries like Taiwan.

Additionally, there's growing speculation about potential interest rate cuts by the Federal Reserve, with probabilities suggesting a drop below the current benchmark rate of 5.5%.

The uncertainty in both traditional finance and crypto markets is fueling discussions about the extent of these rate cuts, reminiscent of previous adjustments made during the Covid-19 pandemic and trade tensions with China.

Similarly in March, as Sam Bankman-Fried, the founder of FTX, was awaiting his sentencing, Polymarket witnessed a surge in betting activity, with nearly half a million dollars wagered on various sentencing possibilities, ranging from 20 to 50 years of imprisonment, and even a potential 100-year sentence.

In the end, Sam Bankman-Fried received a 25-year prison sentence for defrauding investors, customers, and lenders, delivered by US Judge Lewis Kaplan in a Manhattan federal court.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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