Binance’s billionaire founder, Changpeng Zhao, faced a decisive courtroom verdict on Tuesday as he was sentenced to four months in prison after pleading guilty to charges related to enabling money laundering through his cryptocurrency exchange.
In a stern rebuke, U.S. District Judge Richard Jones admonished Zhao for his failure to ensure regulatory compliance within Binance, stating, “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.”
Despite federal prosecutors seeking a three-year prison term, Zhao’s sentence was notably reduced. The defense had proposed five months of probation, while sentencing guidelines recommended a term of 12 to 18 months.
Expressing remorse, Zhao addressed the court, acknowledging his mistakes and stating, “I believe the first step of taking responsibility is to fully recognize the mistakes.” He admitted to the court, “Here I failed to implement an adequate anti-money laundering program… I realize now the seriousness of that mistake.”
In November, Zhao, commonly known as CZ, reached a settlement with the U.S. government to conclude a lengthy investigation into Binance, stepping down as CEO as part of the agreement. Although no longer at the helm, Zhao retains an estimated 90% stake in Binance.
The allegations against Zhao include willfully neglecting to establish an effective anti-money laundering program as mandated by the Bank Secrecy Act and permitting Binance to engage in transactions linked to unlawful activities, including those involving Americans and individuals in sanctioned jurisdictions.
Consequently, Binance was ordered to pay $4.3 billion in fines and forfeiture, with Zhao himself agreeing to a $50 million fine as part of the settlement. Adorned in a dark navy suit with a light blue tie, Zhao appeared in court to face the consequences of his actions, marking a significant chapter in the ongoing saga surrounding one of the world’s largest cryptocurrency exchanges.
