Changpeng “CZ” Zhao received a four-month sentence on Tuesday after submitting a guilty plea. The Binance co-founder was charged with aiding money laundering at the crypto exchange.
He appeared to have received a lighter sentence than the three years prosecutors sought to enforce. Tuesday’s ruling makes CZ the second crypto executive to be sentenced in recent months.
What was CZ’s Crime?
Zhao was once considered one of the most prominent figures in the crypto industry. However, the Asian businessman was forced to resign from his role at Binance following pressure from US prosecutors.
US authorities claimed Zhao failed to implement anti-money laundering measures as required by the Bank Secrecy Act. In addition, prosecutors claimed the former CEO enabled illegal transactions between US citizens and people in sanctioned regions.
I would like to thank everyone for your care and support, be it writing letters, showing support on X, or in any other form. They all mean a lot to me and keep me strong. I will do my time, conclude this phase and focus on the next chapter of my life (education).
I will remain a…
— CZ BNB (@cz_binance) May 1, 2024
U.S. District Judge Richard Jones faulted Zhao for prioritizing profits over compliance. He said, “You had the wherewithal, the financial capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity.
In a recent memorandum, US prosecutors claimed Binance, under CZ, sought to bypass the law. The memorandum stated that “Zhao bet that he would not get caught and that if he did, the consequences would not be as serious as the crime. But Zhao was caught, and now the Court will decide what price Zhao should pay for his crimes.”
Prosecutors added that Binance, under Zhao, supported the sale of child abuse materials. And they also profited from fees from ransomware attacks. Binance paid around $4 billion in fines to US authorities as part of a settlement deal last year.
A repentant CZ told the court after his sentencing, 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.”
.@cz_binance may be off to federal prison for financial crimes that led @binance, the exchange he founded, to agree to pay a $4.3 billion fine. But his reputation, at least in a Seattle courtroom on Tuesday, was never better.@realDannyNelson reportshttps://t.co/geK9XRzMmE
— CoinDesk (@CoinDesk) April 30, 2024
US prosecutors hailed the outcome of Zhao’s case as a step forward in ensuring the crypto space complies with US laws. US Attorney Tessa Gormand remarked that “incarceration was critical in this case, and we’re pleased with the result.”
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