The founder of Binance, Changpeng Zhao, has commenced his four-month imprisonment at a low-security federal prison in Lompoc, California. The court ruled Zhao’s four-month imprisonment on April 30 after pleading guilty to violating money laundering charges by enabling it in his crypto exchange. Wu Blockchain, renowned Chinese crypto researcher, reported Zhao’s prison sentence.
Zhao’s Court Statement
Zhao received a much shorter sentencing than the three years federal prosecutors had requested. The defense team representing Zhao had sought a five-month probationary period, while the recommended prison sentence ranged between 12 and 18 months.
Cristiano Ronaldo to Launch 4th NFT Collection with Binance Despite $1B LawsuitZhao said in court that the first step in taking responsibility was to recognize the mistakes fully. Additionally, Zhao admitted that he failed to enforce strong anti-money laundering measures. He stated,
I’m sorry. I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program. … I realize now the seriousness of that mistake.
Settlement and Financial Penalties
In November last year, Zhao made a deal with the U.S. government to resolve a multi-year investigation into Binance, and as part of the agreement, CZ stepped down as CEO. Furthermore, the U.S. has also asked Zhao to pay a fine of $50 million and Binance a fine of $4.3 billion.
Comparison with Sam Bankman-Fried
Sam Bankman-Fried, the founder and former CEO of FTX, a crypto exchange platform, is also serving time in federal prison. In November of last year, he was convicted on seven criminal counts and, later this March, sentenced to 25 years in prison. In addition he was also ordered by the Manhattan federal court to pay $11 billion in forfeiture.
