Changpeng Zhao, founder & former CEO, Binance
It is the first time a chief executive officer has ever gone to jail for a bank secrecy act violation, a charge that has been used repeatedly in crypto prosecutions in recent years
Binance founder Changpeng Zhao was ordered to spend four months in prison for failures that allowed cybercriminals and terrorist groups to freely trade on the world’s largest cryptocurrency exchange.
Zhao, 47, was sentenced Tuesday by US District Judge Richard Jones in Seattle. Dressed in a dark suit with a light blue tie, the billionaire arrived in court flanked by half a dozen lawyers. His mother and sister watched his sentencing from the front row of the courtroom.
The sentence was far below the three years requested by prosecutors, who had sought to make an example out of Zhao to a heavily-scrutinized industry rebounding from a slew of high-profile scandals.
It is the first time a chief executive officer has ever gone to jail for a bank secrecy act violation, a charge that has been used repeatedly in crypto prosecutions in recent years.
In imposing the sentence, Jones said he hoped Zhao understood that, despite “wealth, power and status,” no person is immune from prosecution or above the law.
Zhao, who didn’t visibly react to the sentence, is expected to serve his four-month stint at Seattle’s Federal Detention Center, SeaTac. A date for Zhao to turn himself in to prison authorities has not been decided, although he has expressed eagerness to get back to his family in the United Arab Emirates.
In a post on X after the sentencing, Zhao said “I will do my time, conclude this phase and focus on the next chapter of my life (education).” He added that he “will remain a passive investor (and holder) in crypto.”
The sentence wraps up a years long probe by the Justice Department that cast a shadow over Binance and the man known as ‘CZ’, one of the industry’s most recognizable figures.
The case also comes off the back of the 25-year prison sentence handed to Sam Bankman-Fried, a former crypto titan who stole billions of dollars from FTX customers.
Zhao’s lawyers said he couldn’t serve time in a minimum-security facility, where most white collar defendants end up, because he wasn’t a US citizen. That put him at a greater risk than other inmates, his lawyers argued as they implored Jones to spare him from prison.
Bloomberg