The former chief of Binance was sentenced by a Seattle judge to four months behind bars for violating the Bank Secrecy Act.
The prosecution had asked for a sentence of three years in prison, while the defense said probation would be more than enough for Zhao’s crimes.
(Web Summit)
Posted April 30, 2024 at 3:12 pm EST.
A federal judge in Seattle, Washington sentenced Changpeng Zhao, the former CEO of the crypto exchange, to four months in prison at a hearing on Tuesday, according to The Verge and other news outlets.
Zhao initially pleaded guilty to failure to maintain an effective anti-money laundering program, a violation of the Bank Secrecy Act (BSA), back in November, as the Department of Justice revealed charges against him and Binance. The DOJ imposed $4.3 billion in penalties to settle those charges, as well as a fine of $50 million for Zhao personally. Zhao also had to resign as CEO.
Today’s sentencing concludes not only those charges, but an extensive investigation into Binance rumored to be years in the making. The prosecution had asked for a sentence of three years in prison, while the defense said probation would be more than enough for Zhao’s crimes.
Despite intensified compliance due to the November settlement, Binance remains by far the largest exchange in the cryptocurrency ecosystem. The exchange handled almost $20 billion in spot trades and over $64 billion in derivatives over the past 24 hours, according to CoinMarketCap, dwarfing the nearest competition.
At the helm of Binance since its inception in 2017, Zhao has become one of the richest people in the world and one of the crypto industry’s most recognizable figures.
The case against him has, as a result, been of massive interest.
Originally founded in Shanghai, Binance relocated from China to Japan amid regulatory pressure before eventually being pushed out of Japan as well, leading to the company having no formal headquarters. Zhao maintained that exchanges like Binance.US used the brand while being “fully compliant with their local regulations.”
“Most regulations put AML above privacy,” Zhao wrote in a 2019 blog post. “It means they will require exchanges to run AML checks. The exchanges have no option here. Well, technically they have 2 choices: 1. run the AML checks, or 2. don’t do business here. Option 2 doesn’t help anyone.”
The Securities and Exchange Commission’s civil suit against Binance remains active before the Southern District of New York.
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