Changpeng Zhao, the former CEO of Binance, the world's largest cryptocurrency exchange, was sentenced to four months in prison on Tuesday for pleading guilty to breaches of U.S. money laundering laws. The sentence was delivered by U.S. District Judge Richard Jones in Seattle, who decided against the prosecution's request that Zhao, aged 47, serve a three-year sentence, double the maximum suggested by federal guidelines.
Previously regarded as the crypto industry's most influential figure, Zhao, also known as "CZ," became the second significant figure in the crypto world to be imprisoned. In March, Sam Bankman-Fried was sentenced to 25 years for embezzling USD8 billion from customers of his now-defunct FTX exchange. Bankman-Fried is currently appealing both his conviction and sentence.
Before announcing the sentence, Judge Jones criticized Zhao for prioritizing growth and profits over adherence to U.S. regulations, stating, "You had the resources, the financial capability, and the manpower to ensure full compliance with every regulation, yet you missed this crucial opportunity."
Zhao showed no emotion upon hearing his sentence.
Prosecutors highlighted that Binance operated under a "Wild West" framework, attracting criminal activities and failing to report over 100,000 dubious transactions with entities recognized as terrorist groups, including Hamas, al-Qaeda, and Islamic State. Furthermore, they accused Zhao's platform of facilitating the sale of child sexual abuse materials and receiving a significant amount of ransomware payments. Binance has agreed to a penalty of USD4.32 billion in response to these allegations.
