Binance Founder Changpeng Zhao Slapped with Four-Month Prison Sentence

Changpeng Zhao, the founder of Binance, received a four-month prison sentence in a Seattle court for his involvement in failing to implement adequate anti-money laundering measures.

Zhao, who stepped down as Binance CEO after pleading guilty to money laundering violations, faced a $50 million fine personally, with Binance hit with a $4.3 billion penalty.

The case centered on Binance‘s failure to comply with US anti-money laundering laws, enabling illicit financial transactions. Despite Zhao’s cooperation with law enforcement, the judge handed down the four-month sentence, citing the severity of the offense.

Judge Richard Jones found Zhao’s sentence appropriate, criticizing his failure to comply with US laws despite having the means to do so. With a net worth of $33 billion, Zhao faces becoming the richest US inmate.

During the sentencing hearing, Judge Jones disagreed with the DOJ’s call for a three-year sentence, arguing there was no evidence of Zhao’s awareness of Binance’s illegal activities.

However, the DOJ contended that violating US law was integral to Binance’s business model and that failing to incarcerate Zhao would undermine the Bank Secrecy Act.

They argued that Binance only tightened compliance rules after being caught, challenging the defense’s call for probation. Zhao admitted to not establishing a KYC/AML program but claimed he later directed Binance to cooperate with the government.

Zhao’s prominence in the crypto space and his role at Binance, which garnered him billions, led to his downfall amidst increased industry scrutiny. His involvement in initiating the bank run on FTX also contributed to his legal challenges.

Image Credit: Shutterstock

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Binance Founder Changpeng Zhao Slapped with Four-Month Prison Sentence

was first posted on May 1, 2024 at 2:28 pm.
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