Changpeng Zhao Sentenced to Four Months in Prison for Violating Money Laundering Laws
Changpeng Zhao, the former CEO of Binance, the world's largest cryptocurrency exchange, was sentenced to four months in prison on Tuesday after pleading guilty to violating U.S. money-laundering laws. The sentence was imposed by U.S. District Judge Richard Jones in Seattle, who rejected prosecutors' request for a three-year term.
Zhao, once considered the most powerful person in the crypto industry, is the second major crypto boss to be sentenced to prison. In March, Sam Bankman-Fried received 25 years behind bars for stealing $8 billion from customers of his now-bankrupt FTX exchange.
Before handing down the sentence, Jones criticized Zhao for prioritizing growth and profits over compliance with U.S. laws. Prosecutors argued that Binance operated under a "Wild West" model, welcoming criminals and failing to report suspicious transactions, including those involving designated terrorist groups and child sexual abuse materials.
Zhao expressed remorse for his actions, stating that he failed to implement an adequate anti-money-laundering program and recognized the seriousness of his mistake. He paid a $50 million criminal fine and agreed not to appeal the sentence.
Defense lawyers argued for probation, citing Zhao's acceptance of responsibility and the fact that others who admitted to similar wrongdoing avoided prison. However, Judge Jones disagreed, stating that a three-year sentence was inappropriate as prosecutors did not show that Zhao had prior knowledge of the illegal activity.
Zhao stepped down as Binance's CEO in November 2023, when he and the exchange admitted to evading money-laundering requirements. The company also agreed to a $4.32 billion penalty.
Several other crypto moguls are currently under investigation by U.S. authorities following the collapse of crypto prices in 2022, which exposed widespread fraud and misconduct within the industry.