Binance Founder Zhao Receives Four-Month Sentence, Start Date Yet to Be Set

Binance Founder Zhao Receives Four-Month Sentence, Start Date Yet to Be Set

by May 2, 2024

Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange, has been sentenced to four months in prison by U.S. District Judge Richard Jones in Seattle, according to Bloomberg.

The sentence comes as a conclusion to a lengthy investigation by the Justice Department into violations that enabled cybercriminals and terrorist groups to use the platform for illicit transactions.

Zhao’s sentence is notably less than the three years prosecutors had sought, indicating a less severe approach towards a figure in an industry fraught with scandals.

Dressed formally, Zhao appeared in court surrounded by his legal team, with his family present. He is set to serve his term at the Federal Detention Center in Seattle, although the start date of his sentence is yet to be determined.

Zhao’s attorneys argued that he could not be placed in a minimum-security facility, typical for white-collar criminals, due to his non-U.S. citizenship, which they claimed posed a greater risk to his safety. They had requested that Zhao be spared from prison time altogether.

Changpeng Zhao

Changpeng Zhao

In a statement on X following the sentencing, Zhao expressed his readiness to serve his sentence and shift focus: “I will do my time, conclude this phase and focus on the next chapter of my life (education).” He also noted, “I will remain a passive investor (and holder) in crypto.”

Zhao pleaded guilty last November to failing to implement a robust anti-money laundering programme at Binance. Following the plea, Binance agreed to a hefty US$4.3 billion settlement to resolve charges related to money laundering and sanctions law violations.

It was revealed that poor compliance at Binance led to significant breaches of U.S. sanctions, particularly with Iran, processing transactions valued at approximately US$898 million that violated sanctions between 2018 and 2022.

Despite stepping down as CEO as part of his plea deal, Zhao continues to own the company. His fortune increased by US$25 billion as the cryptocurrency market rebounded last year, making him the 42nd richest person in the world, according to the Bloomberg Billionaires Index.

He has also expressed a desire to focus on education and philanthropy following his sentence, indicating a shift away from active involvement in the cryptocurrency industry.


Featured image credit: Edited from Freepik