Changpeng Zhao, the founder of Binance, one of the world’s largest cryptocurrency exchanges, has been sentenced to four months in prison for breaching U.S. anti-money laundering regulations. The ruling came after Zhao pleaded guilty to failing to maintain an adequate anti-money laundering program.
U.S. District Judge Richard A. Jones delivered the verdict, expressing concern over Zhao’s disregard for U.S. banking regulations, which were essential for curbing illicit activities. Despite Zhao’s acknowledgment of his wrongdoing, the judge emphasized that no individual, regardless of wealth or status, is exempt from prosecution under U.S. law.
Zhao’s sentence was less severe than the three-year term sought by prosecutors but more stringent than the defense’s request for no prison time. In his guilty plea, Zhao admitted to turning a blind eye to transactions facilitating child sex abuse, drug trafficking, and terrorism financing.
The case also resulted in Binance agreeing to a $4.3 billion settlement to resolve related allegations. Prosecutors highlighted Binance’s involvement in over 1.5 million virtual currency trades, totaling nearly $900 million, which violated U.S. sanctions against entities like Hamas’ al-Qassam Brigades, al-Qaeda, and Iran.
Defense attorneys argued that Zhao was unaware of specific transactions violating U.S. regulations and emphasized his efforts to enhance compliance measures at Binance before stepping down. Zhao himself expressed regret for failing to establish necessary compliance controls but asserted that Binance had since implemented stringent anti-money laundering measures.
Prosecutors countered that Zhao knowingly violated the Bank Secrecy Act and that his actions warranted punishment to uphold the law’s integrity. The case serves as a landmark example of holding individuals and corporations accountable for flouting anti-money laundering regulations, signaling the importance of robust financial oversight in the cryptocurrency industry.