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Binance Crypto Founder Zhao Starts Serving Time in US Prison – Report

In this post:

  • Binance founder Changpeng Zhao starts serving his four-month prison sentence.
  • The billionaire handed himself over to prison officials in Lompoc, California.
  • Zhao pleaded guilty to violating U.S. laws against money laundering at Binance.

Changpeng Zhao, the former CEO of the Binance cryptocurrency exchange, has reportedly started serving his four-month sentence in a minimum-security federal prison in the U.S. The billionaire handed himself over to prison officials in Lompoc, California, on Friday, CNBC reported.

Also read: Zhao Writes Apology Letter to the Judge as He Faces Jail Time

U.S. District Judge Richard Jones sentenced Zhao, also known as “CZ,” to prison in April. Zhao pleaded guilty to violating U.S. laws against money laundering at Binance, the crypto exchange that he founded in July 2017.

Zhao Received a 4-Month Sentence

Zhao is the second major crypto mogul to be jailed in the United States. In March, FTX Exchange founder Sam Bankman-Fried was sentenced to 25 years behind bars for $8 billion fraud and related crimes.

Before passing the sentence, Judge Jones censured Zhao for putting Binance’s profits and growth ahead of complying with U.S. laws, Reuters reported in April. Binance is the world’s largest crypto exchange.

“You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity,” Jones said in a Seattle federal court at the time.

In his defense, Zhao apologized to the court, saying:

“I’m sorry. I believe the first step in 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.”

The four-month prison term handed down by Jones was much lighter than the three years demanded by prosecutors. The sentence also reportedly failed to meet the maximum of one to one and a half years according to the federal guidelines.

Binance
Binance was accused of failing to flag or report money-laundering risks.

Binance Failed to Flag Money-Laundering Risks

U.S. prosecutors have been investigating Binance and Zhao, 47, for years. In November, CZ agreed to a deal with the United States government, which forced him to step down as Binance CEO.

Zhao, who has a personal fortune of up to $40 billion, according to Bloomberg, is believed to still own 90% of the cryptocurrency exchange.

Also read: Cristiano Ronaldo and Binance Launch a New NFT Collection

Binance also agreed to pay $4.3 billion in fines and other penalties as part of the settlement with the federal government. Zhao himself paid a fine of $50 million, according to the CNBC report.

Prosecutors charged CZ with failing to put in place an effective anti-money laundering program at Binance. The exchange was accused of giving bad actors involved in child sex, narcotics and terrorist financing free reign. Authorities said Binance did not have protocols to flag or report suspicious transactions.


Cryptopolitan Reporting by Jeffrey Gogo

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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