Binance Founder Zhao Sentenced to Four Months in Prison for Money Laundering Violations
Changpeng Zhao, the founder and former CEO of cryptocurrency exchange Binance, was sentenced to four months in prison on Tuesday for failing to implement an adequate money laundering program at the company. The sentence, handed down by US District Judge Richard Jones in Seattle, is the first time a CEO has been imprisoned for violating the Bank Secrecy Act in the crypto industry.
Zhao, who pleaded guilty to the charges in November, expressed remorse for his actions and said he had traveled to the US to take responsibility. He also stated that he would focus on a philanthropic education project after serving his sentence.
Prosecutors had sought a three-year prison sentence, arguing that Zhao's violations were intentional and not an oversight. They also pointed to the fact that Binance processed millions of dollars in transactions for illicit actors, including terrorists and hackers.
Judge Jones, however, said he hoped Zhao understood that no one is above the law, regardless of wealth or status. He also noted that Zhao's sentence was proportionate to the crime and that the government was not trying to "kill the crypto industry."
Zhao's lawyers argued that he should not be imprisoned because he was not a US citizen and could not serve time in a minimum-security facility. They also pointed to cases involving similar banking law violations that resulted in probation.
However, Judge Jones said Zhao's crime was "unprecedented" and that the failure to maintain an adequate money laundering program had opened the door to illicit actors.
Despite the sentence, Zhao will remain a "passive investor" in crypto and will continue to own Binance. He is expected to serve his four-month sentence at the Federal Detention Center in SeaTac, Washington.