Seattle, Washington – The founder of the world’s largest cryptocurrency exchange has been sentenced to four months in prison for allowing criminals to launder money on his platform. Changpeng Zhao, commonly known as “CZ,” stepped down from his position at Binance in November and admitted guilt to violating US money laundering laws.
In a landmark ruling, Binance was fined $4.3 billion after a thorough US investigation uncovered its role in aiding users to evade sanctions. Prosecutors initially sought a three-year prison term for Zhao, but the final sentence was decided during a hearing in Seattle by Judge Richard Jones. The judge highlighted Zhao’s prioritization of Binance’s growth and profits over complying with US laws and regulations.
US officials have expressed serious concerns over the implications of Binance and Zhao’s activities on national security, labeling their actions as “wilful violations” that jeopardize the integrity of the US financial system. Treasury Secretary Janet Yellen criticized Binance for neglecting its legal obligations in pursuit of financial gain, resulting in the flow of funds to nefarious elements like terrorists, cybercriminals, and child abusers.
Despite his immense wealth, with a fortune estimated at $33 billion by Forbes magazine, Zhao’s legal troubles are far from over. Nigerian authorities are probing the company, which is based in the Cayman Islands, for potential wrongdoing. This development comes as another prominent figure in the crypto world, Sam Bankman-Fried, was sentenced to 25 years in prison for fraud related to his rival platform, FTX.
The Justice Department’s investigation into Binance also found that the exchange facilitated illicit money movements, making it easier for criminals to navigate the financial system undetected. As governments worldwide tighten regulations around cryptocurrencies, this high-profile case serves as a stark reminder of the legal risks and ethical responsibilities that come with operating in the digital financial realm.