Three years was recommended by federal prosecutors.
According to The New York Times, a federal judge has handed down a sentence of four months in prison to Changpeng Zhao, the creator of Binance. Zhao is commonly referred to as “CZ.” The prosecution had suggested a sentence of three years. During the month of November, Zhao entered a guilty plea to the charge of violating the Bank Secrecy Act by failing to establish a program to combat money laundering.
Within the cryptocurrency exchange, the Department of Justice (DOJ) accused Zhao of enabling illicit behavior to grow. The drive of profit led Binance to ignore its legal commitments, which it did in order to maximize its profits. Its intentional failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Treasury Secretary Janet Yellen said in November. “Its platform was designed to facilitate the movement of money.”
Binance was charged by the government of failing to comply with American sanctions and of neglecting to report suspicious transactions which were tied to the sale of drugs and materials that contained information about child sexual abuse. Prosecutors stated in court that Zhao had informed employees of Binance that it was “better to ask for forgiveness than permission.” Zhao further boasted that if Binance had respected the law, the company would not be “as big as we are today.”
In accordance with the conditions of the plea deal, Binance agreed to pay a fine of $1.8 billion and forfeit $2.5 billion respectively. As a component of the settlement, Zhao personally contributed fifty million dollars.
Zhao’s sentence is far shorter than the 25 years that fellow crypto icon Sam Bankman-Fried received in March, despite the fact that the charges against him were somewhat different. This individual, who is commonly referred to as SBF, was found guilty of seven charges of fraud and conspiracy for his role as the leader of the cryptocurrency platform FTX.
The collapse of Bankman-Fried, as well as the overall downturn of the cryptocurrency business during the past 18 months, was largely attributable to Zhao’s contributions. In November of 2022, the founder of Binance announced via Twitter that his business will be selling off its shares in the de facto token being used by FTX. He made reference to “recent revelations that have come to light” while also mentioning “ethical concerns” and “regulatory risks.” FTX, as well as the cryptocurrency industry as a whole, was shattered by the posts. (They most certainly contributed to attracting the notice of the government as well.) When FTX’s wells dried up as a result of the platform’s rapid collapse, Zhao momentarily agreed to buy the company but swiftly backed out of the deal.
In spite of the fact that Zhao’s offenses were “on an unprecedented scale,” the prosecution submitted a request for a three-year sentence, despite the fact that the usual federal punishment for his offense was between twelve and eighteen months. On the other hand, Judge Richard A. Jones had a different opinion and decided to sentence him to a meager one-twelfth of the term that the government had proposed.
According to reports, a lawyer with the Department of Justice named Kevin Mosley stated in court on Tuesday that “this wasn’t a mistake — it wasn’t a regulatory oops.” “Breaking the law in the United States was not an unintended consequence of his objective to make as much money as possible. That undertaking would not have been possible without breaking the law.