Founder and former CEO of Binance, Changpeng Zhao, received a four-month prison sentence on Tuesday after pleading guilty to violating U.S. money laundering laws at the world’s largest cryptocurrency exchange.
Once a prominent figure in the crypto industry, Zhao, also known as “CZ,” is the second major crypto executive to be sentenced to prison.
U.S. District Judge Richard Jones in Seattle handed down the sentence, which fell short of the three years sought by prosecutors and the maximum 1-1/2 years recommended under federal guidelines.
It was also notably lighter than the 25-year sentence received by Sam Bankman-Fried in March for embezzling $8 billion from customers of his now-bankrupt FTX exchange. Bankman-Fried is currently appealing his conviction and sentence.
Despite the shorter sentence, prosecutors viewed the outcome as a success after a lengthy investigation into Binance and Zhao, who had been residing beyond the reach of U.S. authorities in the United Arab Emirates.
U.S. Attorney Tessa Gorman hailed the result as “an epic day,” emphasising the importance of incarceration in the case.
Before delivering the sentence, Judge Jones criticised Zhao for prioritising Binance’s growth and profitability over compliance with U.S. laws, noting that Zhao had the resources to ensure regulatory compliance but failed to do so.
Zhao, 47, remained composed upon hearing the sentence, dressed in a navy blue suit and tie, with family members present in the courtroom. His defence team had requested probation, but the judge opted for a brief prison term.
However, critics like Dennis Kelleher, head of the financial reform advocacy group Better Markets, expressed dissatisfaction with the sentence, suggesting that Zhao’s wealth would allow him to evade the full consequences of his actions.
Ozioma Samuel-Ugwuezi
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