The former boss of the world’s largest cryptocurrency exchange has been jailed for four months for enabling money laundering.
The sentence was handed down to billionaire Binance founder Changpeng Zhao, nicknamed CZ, after he pleaded guilty to violating U.S. anti-money laundering laws designed to prevent the financing of terrorism and the routing of funds to sanctioned countries.
Sentencing
The prison term was far less than that requested by U.S. prosecutors who wanted a three-year sentence — twice the 18-month maximum recommended by federal sentencing guidelines — for being tough on the man once considered the most powerful person in the crypto world.
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The defense had requested probation without prison time for his client. A fine of $50m (£40m) has already been paid by Mr Zhao.
Despite the massive fine, he remains a billionaire and the richest crypto executive, with Forbes magazine putting his fortune at $33bn (£26.4bn).
Mr. Zhao apologized before the sentencing. “I failed here,” Mr. Zhao said. “I deeply regret my failure and I am sorry.”
But District Judge Richard Jones told CZ: “You had the means, the financial capabilities and the people power to ensure that every regulation had to be complied with, and so you failed to take this opportunity. »
He is the second big crypto boss to go to prison. Last month, the founder of FTX Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from the now-bankrupt crypto exchange.
Bankman-Fried appealed his conviction and sentence.
A model of the “Wild West”
Mr. Zhao resigned from his position at Binance in November after he and the company admitted to circumventing the requirements of the US Bank Secrecy Act.
The company agreed to a $4.3bn (£3.4bn) 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 pornography and received proceeds from ransomware cyberattacks.
The U.S. Department of Justice brought the case as part of its fight against criminal activity linked to cryptocurrency, better known for Bitcoin.
Binance is also is being investigated and prosecuted by another U.S. agencythe Securities and Exchange Commission.
The company had already processed around two-thirds of all cryptocurrency transactions.
