Binance Founder Receives 4 Month Prison Sentence

Binance founder and former CEO Changpeng Zhao was sentenced to four months in prison Tuesday after pleading guilty last year to federal money laundering and sanctions violations with his company.

According to several sources, the punishment handed down on Tuesday by United States District Judge Richard Jones, headquartered in Seattle, was far less than the three-year sentence that the prosecution was asking. 

The terms of Zhao’s plea deal included his agreement to resign from his position as CEO of Binance and pay a fifty million dollar fine. He was found guilty of failing to maintain an effective anti-money laundering program and of violating sanctions that were tied to users in Iran, Cuba, Syria, and Russian-occupied portions of Ukraine. 

In a document submitted to the court earlier this month, attorneys from the Department of Justice suggested that Zhao be sentenced to three years in jail. They believed that this would make him “accountable for his intentional criminal conduct” and would “not just send a message to Zhao but also…the world.” 

The federal guidelines indicate a sentence of twelve to eighteen months for offenses of this nature; nevertheless, the prosecutors contended that this would not “adequately reflect the seriousness of Zhao’s offense…or offer adequate specific or general deterrence.” 

Noting that the crypto billionaire had acknowledged responsibility for the money laundering breaches and that he had already been away from his family for more than five months after being ordered to remain in the United States, Zhao’s attorneys have urged that he be placed on probation for five months. 

Zhao’s attorneys have produced filings that include letters from his family, investors, royals from the United Arab Emirates, and Max Baucus, who served as the previous United States ambassador to China. These letters reference Zhao’s charitable efforts and portray him as a family man. 

$4.3 billion is the total fines and forfeiture that Binance has agreed to pay to settle the action brought by the Justice Department, which is that specified sum. 

The deliberate breach of United States law by Zhao was neither an accident nor an oversight. According to the filing federal prosecutors prepared, “He made a business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets.” 

IMPORTANT HISTORICAL CONTEXT

In November of the previous year, Binance entered a guilty plea to break anti-money laundering, unlicensed money transfer, and sanctions regulations. Zhao, on the other hand, entered a guilty plea to the funds laundering charges.

He was released on a bond of $175 million and ordered to reside in the United States of America. Zhao is a dual citizen of the United Arab Emirates and Canada.

In recent weeks, Zhao has been the second high-profile crypto CEO to face sentencing in a high-profile federal case on sentences. One month ago, former cryptocurrency billionaire Sam Bankman-Fried was given a sentence of 25 years in jail for a fraud case linked to his company’s failure, FTX, and included a total of eleven billion dollars.

FTX was the second-largest cryptocurrency exchange in the world, immediately following Binance, before its unexpected collapse in November of 2022.

According to Forbes, Changpeng Zhao’s overall net worth was estimated to be $33 billion as of early Tuesday morning. This makes him the fifty-first richest person in the world.