Key takeaways:
- Binance founder CZ has received a four-month prison sentence in a Seattle federal court
- Initially, prosecutors had pursued a three-year prison term for CZ
- Prison sentence marks U.S. officials’ prolonged scrutiny culminated in holding Binance and its CEO accountable last fall.
Changpeng Zhao, the former CEO of Binance, has received a four-month prison sentence for his involvement in violating US money laundering laws at the renowned cryptocurrency exchange.
This decision was handed down by United States District Judge Richard Jones in Seattle, who opted not to grant the prosecutors’ request for a three-year term for the 47-year-old Zhao.
‘’Zhao put Binance’s growth and profits over compliance with US laws and regulations”
During the trial, Judge Jones emphasised the lack of evidence indicating Zhao’s awareness of specific illicit activities at Binance, which led to the rejection of the plea to extend the sentence.
Nevertheless, government attorneys argued that Zhao’s approach at Binance was characterised by seeking forgiveness rather than permission, emphasising the necessity for incarceration to underscore the gravity of the offence.
Binance has been directed to pay a staggering $4.3 billion (£3.4 billion) following a US inquiry uncovering its role in enabling users to circumvent sanctions.
Zhao admitted guilt to one count of breaching the Bank Secrecy Act in November, specifically related to the failure to implement an adequate anti-money laundering program at the exchange.
US authorities underscored the risks posed to the nation’s financial system and security by the actions of Binance and Zhao.
In November, Zhao entered into a settlement with US authorities to resolve a prolonged investigation into Binance, resulting in his resignation as CEO. Despite relinquishing his CEO role, Zhao reportedly retains a substantial 90% stake in Binance.
The legal proceedings against Binance and Zhao were a concerted effort involving the Department of Justice, the Commodity Futures Trading Commission, and the Treasury Department.
Binance has encountered additional legal challenges from regulatory agencies concerning alleged mishandling of customer assets and the operation of an unauthorised exchange in the US.
During his sentencing, Zhao expressed remorse for his actions, acknowledging, “I deeply regret my failure, and I am sorry.” Despite prosecutors’ pursuit of a three-year prison term, Zhao’s eventual four-month sentence falls short of the recommended guideline for the charges.
