Published
3 weeks ago on
June 02, 2024
Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has begun serving his sentence at a low-security federal prison in Lompoc, California.
CNBC confirmed the news through Zhao’s legal team at Latham and Watkins.
The crypto community has shown support for Zhao during this time. A Reddit user highlighted that Zhao’s prison sentence could safeguard Binance from potential risks.
User Ilsemprelaziale commented:
“If FTX downfall hit Crypto hard, just imagine what would happen if Binance collapsed. He pleaded guilty and stepped down as CEO.”
Zhao has revealed his plans following his four-month sentence.
He intends to resume his involvement in the cryptocurrency sector, maintaining his holdings and focusing on passive investing, demonstrating his unwavering confidence in digital assets.
He emphasized this period as “a new stage for the crypto industry,” highlighting the critical need for adherence to regulations and compliance.
In April, Zhao, also known as “CZ,” was sentenced by Judge Richard Jones in the U.S. District Court for the Western District of Washington.
The charges were related to money laundering at Binance, resulting in a four-month prison term and a $50 million fine.
This sentence is notably less severe than the three years federal prosecutors initially sought.
Despite sentencing guidelines recommending 12 to 18 months in prison, Zhao’s lawyers advocated for five months of probation.
Before his sentencing, Zhao apologized and reflected on his actions, accepting responsibility for Binance’s inadequate Anti-Money Laundering (AML) program.
Following Judge Jones’ decision, Zhao stated he would report to prison on a date to be determined.
In November, Zhao reached an agreement with the U.S. government to resolve a multiyear investigation into Binance.
As part of the settlement, he resigned as CEO of Binance.
The U.S. government also imposed a $4.3 billion fine for “civil regulatory enforcement actions,” of which Zhao agreed to pay $50 million.
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