- Binance founder Qiao Changpeng, who pleaded guilty to money laundering violations in November, was sentenced to four months in prison on Tuesday.
- U.S. prosecutors had recommended that Zhao be sentenced to 36 months in prison.
- The crypto billionaire has stepped down as CEO of Binance as part of an agreement with the Department of Justice.
Qiao Changpeng, former CEO of Binance, appeared in federal court in Seattle, Washington, United States on Tuesday, April 30, 2024.
David Ryder Bloomberg | Getty Images
Binance billionaire Qiao Changpeng pleaded guilty on Tuesday to enabling money laundering on his cryptocurrency exchange and was sentenced to four months in prison.
The sentence given to Zhao in Seattle federal court was significantly less than the three years in prison that federal prosecutors had sought for him. The defense had asked for a five-month suspended sentence. Sentencing guidelines called for 12 to 18 months in prison.
In November, Zhao signed a deal with the U.S. government to resolve a multi-year investigation into Binance, the world's largest cryptocurrency exchange. As part of the settlement, Mr. Zhao resigned as CEO of the company. Although Zhao no longer runs the company, it is widely reported that he owns an estimated 90% stake in Binance.
Zhao, Appearing in court wearing a dark navy suit and light blue tie, he was charged with willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act and with proceeds from illegal activities. He is accused of allowing Binance to process transactions involving . Between Americans and individuals within sanctioned jurisdictions.
The US ordered Binance to pay $4.3 billion in fines and forfeitures. Mr. Zhao agreed to pay a $50 million fine.
Binance is facing separate lawsuits from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission for allegedly mishandling customer assets and operating an illegal unregistered exchange in the United States.
The case against Binance and its founders was a joint effort between the Department of Justice, CFTC, and Treasury, but the SEC was notable in its absence.
In a statement to CNBC, a Binance spokesperson said the cryptocurrency exchange is “proud of the culture of compliance, security, and transparency we've built over the past few years, and we're committed to building on that culture as we continue to evolve.” I'm looking forward to going.” ”
Qiao Changpeng, former CEO of Binance, appeared in federal court in Seattle, Washington, United States on Tuesday, April 30, 2024.
David Ryder Bloomberg | Getty Images
A spokesperson said the company had made “significant compliance enhancements,” including anti-money laundering detection and “hiring key compliance personnel.”
Zhao's lawyer did not immediately respond to CNBC's request for comment.
Prosecutors alleged that Zhao violated U.S. law on an “unprecedented scale” and “deliberately ignored” Binance's legal responsibilities.
In an April 23 memo, prosecutors said that under Zhao's management, Binance operated under a “Wild West” model.
“Mr. Zhao bet that he would not be caught, and that even if he was caught, the consequences would not be as serious as the crime,” the memo said. “However, Mr. Zhao has been arrested. The court will now decide the price Mr. Zhao should pay for his crimes.”
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