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BREAKING NEWS: Founder of Binance crypto trading sentenced to four months in prison for money laundering

Changpeng Zhao, the former CEO of Binance, has been sentenced to four months in prison after pleading guilty to violating U.S. money laundering laws at the world’s largest cryptocurrency exchange.

Once a prominent figure in the crypto industry, Zhao, also known as “CZ,” becomes the second major crypto executive to face prison time.

The sentence handed down by U.S. District Judge Richard Jones in Seattle was shorter than the three years sought by prosecutors and below the maximum 1-1/2 years recommended under federal guidelines.

This is notably lighter compared to Sam Bankman-Fried’s 25-year sentence in March for defrauding customers of his now-bankrupt FTX exchange. Bankman-Fried is currently appealing his conviction and sentence.

Despite the relatively lenient sentence, prosecutors expressed satisfaction with the outcome of the long-running investigation into Binance and Zhao, who had been residing in the United Arab Emirates beyond U.S. jurisdiction.

U.S. Attorney Tessa Gorman hailed the result as “an epic day,” emphasizing the importance of incarceration in this case.

During the sentencing, Judge Jones criticized Zhao for prioritizing Binance’s growth and profitability over compliance with U.S. laws. He pointed out that Zhao had the resources and capabilities to ensure regulatory compliance but failed to do so.

Zhao, 47, maintained a composed demeanour upon hearing the sentence, dressed in a navy blue suit and tie in the courtroom with family members present. His defence team had requested probation, but the judge ruled otherwise.

Dennis Kelleher, head of the financial reform advocacy group Better Markets, criticized the outcome, stating that it sends a message that “crime pays,” especially considering Zhao’s substantial wealth remains intact.

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Prosecutors highlighted Binance’s lax approach, describing it as a “Wild West” model that facilitated criminal activities. They noted instances where Binance failed to report suspicious transactions with designated terrorist groups and supported illegal activities such as the sale of child sexual abuse materials and ransomware proceeds.

As part of the resolution, Binance agreed to a $4.32 billion penalty, and Zhao paid a $50 million criminal fine in addition to $50 million to the U.S. Commodity Futures Trading Commission.

 

Credit: Ghpage

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