The former head of the world’s largest cryptocurrency exchange was jailed for four months for enabling money laundering.
The sentence was handed down to Binance founder Changpeng Zhao, nicknamed CZ, after he pleaded guilty to violating US anti-money laundering laws aimed at preventing terrorist financing and the transfer of funds to sanctioned countries. .
The prison sentence was much less than desired by U.S. prosecutors, who wanted a three-year sentence — double the 18-month maximum recommended by federal sentencing guidelines — to be tough on the man who was once considered the person most powerful in the cryptographic world.
The defense asked for probation without prison time for their client. A $50 million (£40 million) fine has already been paid by Zhao.
Despite the huge fine, he remains a billionaire and the richest crypto executive, according to Forbes, with the magazine valuing his wealth at $33 billion (£26.4 billion).
Zhao apologized before being sentenced in a Seattle court, saying, “I failed here. I deeply regret my failure and I am sorry.”
But District Judge Richard Jones told him: “You had the resources, the financial capacity and the people power to ensure that all regulations were complied with and so you failed at this opportunity.”
He is the second major crypto boss to go to prison. Last month, the founder of FTX Sam Bankman-Fried was sentenced to 25 years for stealing billions of dollars from the now bankrupt cryptocurrency exchange.
Bankman-Fried appealed his conviction and sentence.
Sam Bankman-Fried sentenced to 25 years in prison
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A ‘Wild West’ Model
Zhao got down from his position at Binance in November after he and the company admitted to evading the requirements of the US Bank Secrecy Act.
The company agreed to a $4.3 billion (£3.4 billion) fine as prosecutors said it used a “wild west” model that failed to report 100,000 suspicious transactions involving terrorist groups.
Prosecutors also said Binance supported the sale of child sexual abuse material and received proceeds from ransomware cyberattacks.
The US Department of Justice opened the case as part of its crackdown on criminal activity in cryptocurrency, better known as Bitcoin.
Binance is also being investigated and prosecuted by another US agencythe Securities and Exchange Commission.
The company has already processed about two-thirds of all cryptocurrency transactions.
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