Binance Founder Sentenced to Four Months in US Prison for Money Laundering

In Tuesday’s most high-profile cryptocurrency case since Sam Bankman-Fried’s imprisonment, the founder of Binance, a cryptocurrency startup, was sentenced to four months in US prison after entering a guilty plea to money laundering charges.

A settlement with US authorities led to Canadian Changpeng Zhao’s resignation from the largest bitcoin exchange platform in the world towards the end of last year.

Two Treasury agencies’ investigations claim that Binance was unable to stop transactions by groups such the Islamic State group, al-Qaeda, or Hamas’ military branch.

Binance consented to pay $4.3 billion to settle allegations in February after Zhao entered a guilty plea to breaking US anti-money laundering rules.

Prosecutors requested that the judge sentence the defendant to three years in prison for a crime for which probation is usually the appropriate punishment.

“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” Justice Department lawyers said of Zhao in a sentencing memorandum.

“The sentence in this case will not just send a message to Zhao but also to the world.”

In the legal submission, Zhao’s attorneys argued that receiving probation as punishment is fair, fitting, and consistent with established legal norms.

They noted Zhao’s acknowledgment of wrongdoing and emphasized his history of philanthropy as contributing factors.

READ ALSO: NSA Confirms Binance Executive’s Escape from Custody

“I made mistakes, and I must take responsibility,” Zhao, who lives in the United Arab Emirates, said in a post on X, formerly Twitter, in November.

He has resided in the United States since that period.

Established in 2017, Binance quickly dominated the crypto-trading realm, catapulting its founder and CEO Zhao into billionaire status.

Although initially founded in China, Binance shifted its operations overseas following regulatory pressure from Beijing on the cryptocurrency industry.

Operating crypto exchanges and offering various services globally, Binance faced significant setbacks amid market downturns and regulatory scrutiny.

Despite the industry’s surge in 2021, scandals and legal issues, including the collapse of its main competitor FTX and criminal charges against industry executives, shook public confidence, leading investors to withdraw from crypto.

In March, FTX’s founder, Bankman-Fried, received a 25-year prison sentence.

The crypto sector has recently rebounded, partly due to US regulatory approval for bitcoin exchange-traded funds (ETFs), enabling investors to trade the asset without direct involvement in the crypto market.

Binance’s newly appointed CEO, Richard Teng, informed AFP this month that the company had allocated substantial resources to compliance efforts and was closely collaborating with regulators.