A court in the U.S. sentenced Binance founder Changpeng Zhao to four months in prison for failing to establish adequate anti-money laundering protections.
In November 2023, Zhao pleaded guilty to the charges. As per Judge Richard Jones, Zhao prioritized Binance’s growth and profits over compliance with U.S. laws and regulations.
Though Zhao is not as well-known as Sam Bankman-Fried, the FTX fraudster, he is a more significant figure in the crypto world. Zhao founded Binance in 2017 and is still the company’s controlling shareholder, though he stepped down as CEO as part of his plea agreement.
Binance Founder Fined $898 Million.
Prosecutors requested three years of prison time, double the sentencing guideline of 18 months, because of the scope and rami. Zhao’s misconduct was massive, which should reflect the significant harm to U.S. national security caused by his criminal acts.
According to prosecutors, Binance allowed sanctions violations of more than $898 million and unprecedentedly violated U.S. law. Zhao and other Binance executives didn’t comply with U.S. laws, including the Bank Secrecy Act (BSA), and didn’t adequately implement anti-money laundering efforts.
As a result, Iranian customers could transact at least $1.1 million with U.S. customers in violation of sanctions. Other sanctioned countries, such as Cuba and Syria, were also able to transact.
Balso able to transact his trade, Zhao began the run on FTX, eventually revealing the exchange’s fraud. Bankman-Fried was sentenced to 25 years in prison in March after being found guilty in a jury trial of seven counts of conspiracy and fraud charges.
Cohort Or Coincidence?
In their sentencing memo, Zhao’s lawyers said that Zhao deserved no jail time. Zhao had already agreed to pay a fine of $50 million, a pittance compared to the estimated $33 billion fortune he had made with Binance. He also decided not to appeal any sentence of up to 18 months.
In October 2022, Sam Bankman-Fried, the CEO of FTX, a rival exchange, tweeted and then deleted that he was excited to see Changpeng Zhao, the CEO of Binance, representing the industry in Washington D.C. A week after, Zhao tweeted that he would sell his holdings of FTX’s token.
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