Changpeng Zhao, the former CEO of Binance, was handed a four-month prison sentence on Tuesday.
Binance founder Changpeng Zhao (CZ) pleaded guilty in November and has been sentenced to prison for violating United States money laundering laws. Although Prosecutors recommended a 36-month sentence, U.S. District Judge Richard Jones in Seattle has imprisoned CZ for four months.
Zhao Sentenced for Allowing Money Laundering
According to U.S. officials, Binance put the country’s financial system at risk by not executing an effective anti-money laundering program and allowing Binance to process illegal transactions from U.S. citizens and users residing in sanctioned areas worldwide.
Following CZ’s plea in November, he struck a deal with the U.S government, which involved him stepping down as Binance CEO and paying a fine of $4.3 billion.
Adding to the deal, the U.S. government has sentenced Zhao to four months in prison on the charges of supporting money laundering during his stay in office as Binance CEO.
As revealed by CNBC, CZ’s sentence and actions against Binance are a joint effort by the Commodity Futures Trading Commission (CFTC), the Department of Justice, and the Treasury Department.
Prosecutors Want CZ to Serve Three Years
Prosecutors who want the former Binance boss to serve three years in prison say that CZ violated U.S. law on an unprecedented scale and deliberately disregarded Binance’s legal responsibilities. They added that Binance operated on a “Wild West” model, condoning criminals and not reporting more than 100,000 suspicious from many terrorist groups.
Supporting the request for CZ to serve a harsh sentence, prosecutor Kevin Mosley said, “We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster, but Zhao’s conduct wasn’t a mistake. This wasn’t a regulatory ‘oops.’”
Speaking to Zhao, Judge Richard Jones said, “You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity.”
Before the sentence, Zhao told the judge, “I’m sorry. I believe the first step in 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.”
Amidst the charges, a Binance spokesman said that the company has created a culture of compliance, transparency, and security over the years and will continue to build on that culture.
CZ has become the second most highly influential cryptocurrency personnel to be placed behind bars this year after Sam-Bankman Fried’s sentence last month.