Changpeng Zhao, the founder of the world’s largest cryptocurrency exchange, Binance, has been ordered to spend four months in prison for breaking the anti-money laundering laws of the United States.
The 47 year-old was sentenced Tuesday by US District Judge Richard Jones in Seattle, owing to failures that allowed cybercriminals and terrorist groups to freely trade on the platform
Dressed in a dark suit with a light blue tie, the billionaire arrived in court flanked by half a dozen lawyers. His mother and sister watched his sentencing from the front row of the courtroom.
Prosecutors requested three years of prison time, double the sentencing guideline of 18 months, because the “scope and ramifications of Zhao’s misconduct were massive,” they wrote in their sentencing memo. Zhao’s lawyers, in their own sentencing memo, said that Zhao deserved no jail time, as “no defendant in a remotely similar BSA [Bank Secrecy Act] case has ever been sentenced to incarceration.”
Zhao pleaded guilty and stepped down from Binance as part of a settlement with the US Department of Justice in November. Additionally, Binance agreed to pay $4.3 billion in fines. As part of the agreement, Zhao has waived the right to appeal any sentence up to 18 months in prison. He also agreed to pay a fine of $50 million, a drop in the bucket compared to his estimated $33 billion fortune.
According to the US government, Binance knowingly evaded anti-money laundering regulations. As a result, Iranian, Cuban, and Syrian customers were able to transact in violation of US sanctions. Settlements with the CFTC and SEC were announced at the same time as Zhao’s guilty plea.
