Recent Prosecutions in the Crypto and Banking Industries: A Comparison of Sentences
Binance founder and former CEO Changpeng Zhao, also known as CZ, has been sentenced to four months in prison for his involvement in the crypto giant’s anti-money laundering failures. This news comes after a years-long investigation into the exchange that resulted in CZ’s guilty plea and significant financial penalties.
With a net worth estimated at $33 billion, CZ is one of the wealthiest individuals in the crypto industry and the world. The $4.3 billion in financial penalties imposed on Binance is one of the largest ever by the U.S. government, second only to the $8.9 billion levied against BNP Paribas for banking compliance failures.
This sentencing is unique as it includes actual jail time for CZ, unlike other recent cases in the industry. Arthur Hayes, founder of BitMex, received six months of house arrest and two years of probation for violating the Bank Secrecy Act. Chun “Michael” Gan and Ke “Eric” Tang, founders of KuCoin, are facing charges for conspiring to violate the BSA and operate an unlicensed money transmitting business.
BNP Paribas, a French bank, faced a massive forfeiture of $8.9 billion for sanctions violations, with no individual prosecutions. Wells Fargo paid a $3.7 billion fine for illegal practices, and former retail banking chief Carrie Tolstedt received six months of home confinement and three years of probation for obstruction of a bank examination.
Danske Bank was fined $2 billion for conspiracy to commit bank fraud, with no individual prosecutions. MGM Grand and former president Scott Sibella are facing charges for failure to report suspicious transactions, with a recommended sentence of probation and a fine.
These cases highlight the increasing scrutiny on financial institutions, both traditional and crypto-related, for compliance failures and money laundering violations. The industry is facing a reckoning as authorities crack down on illegal practices, sending a clear message that adherence to regulations is non-negotiable.
