The founder of crypto exchange giant Binance, Changpeng Zhao, has been sentenced to four months in prison.
A federal judge in Seattle has held the Chinese-Canadian entrepreneur personally responsible for his actions and imposed the prison sentence based on his guilty plea to money laundering charges.
Binance founder Changpeng Zhao sentenced
As we reported last November, Zhao was part of a detailed plea agreement with US authorities. The company moved billions of Tether (USDT) stablecoins to cover the costs of the settlement, leaving the company caught red-handed for money laundering.
Zhao would personally pay $50 million for his part in the scheme, in which Binance failed to report more than 100,000 suspicious transactions to government regulators.
This consistent rule violation and failure to report illegal transactions would amount to an estimated $898 million before the US government cracks down on the crypto company.
The founder is still the company’s largest controlling shareholder, although he resigned at the time of the agreement. The initial settlement was negotiated between the Justice Department, the Commodity Futures Trading Commission (CFTC) and the Treasury Department.
According to court documents, government authorities sought a sentence of 18 months in prison, which was then increased to 36 months last week. However, the prison sentence imposed by Judge Richard Jones in Seattle was significantly shorter than expected.
This came as a surprise to viewers as the company was linked to illegal transactions involving terrorist groups such as Hamas, Al-Qaeda and ISIS. Therefore, it was assumed that Zhao’s efforts to get a longer prison sentence would be upheld, but Judge Jones did not hit Zhao with a groundbreaking stay behind bars.
Zhao’s legal representation argued for a sentence comparable to the punishment for other rule violations in the same crypto space, saying: “No defendant in a remotely similar BSA case has ever been sentenced to prison.” Mr. Zhao should Don’t be the first.”
Observers and commentators had predicted that Zhao would suffer the same fate as FTX founder Sam Bankman-Fried. The crypto entrepreneur and his now-defunct company were sentenced to 25 years in prison for fraud and conspiracy.
At the conclusion of the sentencing, Zhao agreed not to appeal the decision for 18 months.
Image: Binance Newsroom.