Former Binance CEO Sentenced to Four Months in Prison for Money-Laundering Violations
Former Binance CEO Sentenced to Four Months in Prison for Money-Laundering Violations
Changpeng Zhao, the former chief executive of Binance, has been sentenced to four months in prison after pleading guilty to violating US money-laundering laws at the world’s largest cryptocurrency exchange. The sentence was imposed by United States District Judge Richard Jones in Seattle, who rejected prosecutors’ request for a three-year term.
Once considered the most powerful person in the cryptocurrency industry, Zhao, also known as “CZ,” is the second major crypto boss to be sentenced to prison. Zhao pleaded guilty in November to failing to take required anti-money-laundering measures and stepped down as Binance agreed to pay $4.3 billion to settle related allegations.
US officials stated that Zhao deliberately looked away from transactions that supported child sex abuse, the illegal drug trade, and “terrorism.” Zhao expressed regret for his actions, stating, “I failed here. I deeply regret my failure, and I am sorry.”
Prosecutors argued that a three-year prison term was necessary to uphold the law and prevent similar violations in the future. They accused Zhao of making a business decision to violate US law in order to attract users, build his company, and profit financially.
Zhao’s lawyers, on the other hand, argued that he should receive no prison time, highlighting his cooperation and efforts to improve compliance at Binance. They emphasized that Binance now has stringent anti-money laundering controls in place, making it a model of compliance with banking transparency regulations.
In a letter to the court, Zhao acknowledged his failure to establish necessary compliance controls at Binance but emphasized the changes that have been implemented since his departure. Despite the sentencing, Zhao’s case raises questions about the regulation and oversight of the cryptocurrency industry, as no one has previously been sentenced to prison for similar violations of the Bank Secrecy Act.
