Binance founder Zhao jailed over fraud in U.S.

The co-founder and former Chief Executive Officer (CEO) of Binance, Changpeng Zhao, has been sentenced to four months in prison in the United States.

Zhao was sentenced after he pleaded guilty to violating U.S. money-laundering laws at the world’s largest cryptocurrency exchange Binance on Tuesday.

The sentence was imposed by United States District Judge Richard Jones in Seattle, who rejected prosecutors’ request that the 47-year-old Zhao serve a three-year term.

Once considered the most powerful person in the cryptocurrency industry, Zhao, known as “CZ”, is the second major crypto boss to be sentenced to prison after Sam Bankman-Fried.

In March, Bankman-Fried received 25 years behind bars for stealing $8 billion from customers of his now-bankrupt FTX exchange.

FTX founder Bankman-Fried jailed for stealing customers’ $8bn

Zhao pleaded guilty in November to one count of failing to take required anti-money laundering measures and stepped down as Binance agreed to pay $4.3 billion to settle related allegations.

U.S. officials said Zhao deliberately looked the other way as people conducted transactions that supported child sex abuse, the illegal drug trade, and “terrorism”.

Zhao said before U.S. District Judge Richard A Jones issued the sentence: “I failed here. I deeply regret my failure, and I am sorry.

“I believe the first step of taking responsibility is to fully recognise the mistakes. Here I failed to implement an adequate anti-money-laundering program.

“I realise now the seriousness of that mistake.”

Prosecutors had told the judge a tough sentence would send a clear signal to other would-be criminals, U.S. media reported.

“We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster,” prosecutor Kevin Mosley said.

But Zhao’s conduct, he said “wasn’t a mistake. This wasn’t a regulatory ‘oops’”.

The three-year prison term prosecutors sought was more than twice the guideline range for the crime. If he did not receive time in custody for the offence, no one would, rendering the law toothless, they argued.

Zhao had been free on a $175 million bond, and agreed not to appeal any sentence within federal guidelines.

Zhao also paid $50 million to the Commodity Futures Trading Commission.

The Star