A federal judge initially sentenced Binance founder Changpeng Zhao (often known as “CZ”) to four months in prison. informed by The New York Times. Prosecutors had recommended three years. Zhao He pleaded guilty in November to violate the Bank Secrecy Act by failing to establish an anti-money laundering program.
The DOJ accused Zhao of allowing criminal activity to flourish in the crypto exchange. “Binance ignored its legal obligations to make a profit. His willful failures allowed money to flow through his platform to terrorists, cybercriminals and child abusers,” Treasury Secretary Janet Yellen said in November.
Government It accused Binance of refusing to comply with US sanctions failing to report suspicious transactions involving drugs and child sexual abuse materials. Prosecutors said in court that if Binance had followed the law, Zhao told Binance employees that it was “better to ask for forgiveness than to allow it,” it would not be “as big as it is today.”
Under the terms of the plea agreement, Binance agreed to forfeit $2.5 billion and pay $1.8 billion in fines. Zhao personally paid $50 million as part of the settlement.
Although the charges are different, Zhao’s sentence is dramatically shorter than his 25-year cryptocurrency executive Sam Bankman-Fried bought In March. The SBF, as it is often known, was He was convicted of seven counts of fraud and conspiracy for his role at the helm of crypto platform FTX.
Zhao played integral role In the fall of Bankman-Fried – and the broader decline of the crypto industry over the past 18 months. The founder of Binance tweeted in November 2022 that his company would liquidate its holdings in the actual FTX token. He said, “the latest statements have arrived[sic] to illuminate’, citing ‘ethical concerns’ and ‘regulatory risks’. Posts only crushed FTX but the crypto world in general. (They probably helped attracts the attention of the government also.) When the FTX wells dried up after the rapid collapse of the platform, Zhao briefly agreed to buy the company but quickly withdrew.
Prosecutors said Zhao’s crime carries a standard federal sentence of 12 to 18 months, but argued for three years, describing his crimes as “unprecedented in scale.” But Judge Richard A. Jones saw it differently, sentencing him to one-twelfth of the government’s proposed term.
“It wasn’t a mistake — it wasn’t regulatory,” DOJ lawyer Kevin Mosley said in court Tuesday. “Breaking US law was not incidental to his plan to make as much money as possible. Violation of the law was an integral part of this attempt.”
