- Changpeng Zhao (CZ) started a four-month prison sentence for inadequate anti-money laundering measures and agreed to a $50 million fine.
- Binance’s founder sentence was lighter than expected as part of a settlement, while he expressed regret in court.
According to CNBC, Changpeng Zhao, the former CEO of Binance, has begun his four-month sentence in a low-security federal prison in Lompoc, California.
Binance’s Founder Sentence Follows Guilty Plea and $50 Million Fine
Zhao, also known as CZ, pleaded guilty in November 2023 to violating the Bank Secrecy Act by failing to implement effective anti-money laundering procedures at Binance, the world’s largest cryptocurrency exchange.
In April, Zhao was sentenced to four months in prison, a significantly lighter sentence than the three years federal investigators sought.
Binance’s founder sentence was suggested a prison term of 12 to 18 months by statements’ guidelines, but Zhao’s defense team, Latham & Watkins, had requested five months of probation.
Zhao also agreed to pay a $50 million fine, while Binance was ordered to pay $4.3 billion.
Before his judgment, Zhao expressed remorse to the US District Judge Richard Jones, saying, “I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program. … I realize now the seriousness of that mistake.”
The Opposing Positions of the Two Founders
Binance’s founder sentence is part of a settlement to resolve a lengthy US government investigation into Binance.
As part of this agreement, Zhao stepped down as CEO but remains a significant shareholder with an estimated 90% stake in the company.
In contrast, FTX’s founder Sam Bankman-Fried, who did not strike a deal with the government, is serving a 25-year sentence after being convicted on all seven criminal counts related to securities fraud that led to the collapse of his cryptocurrency exchange and hedge fund, Alameda Research.
Unlike Zhao, several of Bankman-Fried’s former associates, including Caroline Ellison, cooperated with journalists and raised concerns against him.
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Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.