Billionaire Changpeng Zhao, founder and former CEO of Binance, the world's largest cryptocurrency exchange, received a four-month prison sentence this Tuesday in a Seattle court for money laundering.
The sentencing comes after Zhao pleaded guilty last November to one count of violating the bank secrecy law by failing to implement an effective anti-money laundering program in monetary exchange. This included transactions between Americans and individuals who were in jurisdictions under international sanctions.
The sentence was significantly less than the three years that prosecutors requested for him, while the defense requested five months in prison on probation. The usual average for this crime is 12 to 18 months.
At the moment he is not in prison, although since he is not a US citizen, he cannot have access to a minimum security center. “Everything I have seen in your history and in your characteristics is of a positive and mitigating nature,” Judge Richard A. Jones said in handing down the sentence.
Zhao made a deal with the US government in November to resolve a years-long investigation into Binance. As part of that agreement, the founder of that platform agreed to step down as CEO of the company. Although he is not in charge, everything indicates that he is in possession of 90% of Binance shares.
“I'm sorry,” the defendant told the court at the sentencing hearing. But he stressed that his company has already implemented anti-money laundering controls. “I wanted to do everything I could before leaving management,” he said.
Binance continues to be the largest virtual currency exchange platform, with 101 million visitors in recent months and around a value of 10,000 million in daily volume, although analysts consider that it could be much higher.
Before the pact with the government, which involved the payment of $4.3 billion and the indictment, Zhao, who also agreed to pay a fine of $50 million, had led Binance with an air of aggressive defiance, constantly dismissing any risks or legal problems. This is what the experts considered.
A Binance spokesperson assured CNBC that the cryptocurrency exchange “is proud of the culture of compliance, security and transparency that we have created over the years and we look forward to seeing this culture continue and evolve.”
On the contrary, the prosecution argued that Zhao violated US laws “on an unprecedented scale” and that he had maintained with Binance “a deliberate disregard” for legal responsibilities. They even accused him of operating like “in the wild west.”
