Changpeng Zhao, the founder of Binance, is scheduled to be released from prison on September 29 after serving a four-month sentence. Zhao, who was convicted for failing to implement adequate anti-money laundering measures at his cryptocurrency exchange, was sentenced on April 30, 2024.
In a Seattle federal court, U.S. District Judge Richard Jones criticized Zhao for not ensuring compliance with financial regulations despite having the resources to do so. Zhao had pleaded guilty to charges related to enabling money laundering through Binance. The judge’s sentence was notably lighter than the three years sought by federal prosecutors. Zhao’s defense had requested five months of probation, while sentencing guidelines suggested a term of 12 to 18 months.
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Before his sentencing, Zhao expressed remorse, stating, “I believe the first step of taking responsibility is to fully recognize the mistakes.” He acknowledged his failure to implement an effective anti-money laundering program and recognized the severity of his oversight.
In November, Zhao reached a settlement with the U.S. government following a prolonged investigation into Binance. As part of the settlement, Zhao resigned as CEO of Binance but retained an estimated 90% stake in the company. Under the settlement, Binance paid $4.3 billion in fines, and Zhao personally agreed to a $50 million fine.
Zhao faced accusations of willfully neglecting anti-money laundering obligations under the Bank Secrecy Act and permitting transactions involving proceeds from unlawful activities, including interactions with sanctioned individuals. The Department of Justice, the Commodity Futures Trading Commission (CFTC), and the Treasury Department led the investigation, although the Securities and Exchange Commission (SEC) was not involved.
Binance has since emphasized its commitment to compliance and security improvements, with a company spokesperson stating that the exchange is “proud of the culture of compliance, security, and transparency” it has developed.
Prosecutors described Zhao’s actions as a “deliberate disregard” for legal responsibilities, operating Binance with a “Wild West” approach. They noted that Zhao’s calculated risk of evading consequences had ultimately led to serious repercussions for his crimes.
