Topline
Binance founder and former CEO Changpeng Zhao was sentenced to four months in prison Tuesday after he pleaded guilty last year to violating federal money laundering laws along with his company which also pleaded guilty to sanctions violations.
FILE PHOTO: Binance founder and former CEO Changpeng Zhao will pleaded guilty last year to violating ... [+]
Key Facts
Seattle-based U.S. District Judge Richard Jones handed down Tuesday’s sentence, which was far below the three-year sentence prosecutors were seeking, according to multiple reports.
In his plea deal, Zhao agreed to step down as Binance’s CEO and pay a $50 million fine for failing to maintain an effective anti-money laundering program, as well as sanctions violations linked to users in Iran, Cuba, Syria, and Russian-occupied areas of Ukraine.
In a court filing earlier this month, Justice Department lawyers recommended a three-year prison sentence for Zhao, arguing this would hold him “accountable for his intentional criminal conduct” and “not just send a message to Zhao but also…the world.”
Federal guidelines recommend a 12 to 18-month sentence for such offenses, but the prosecutors argued this would not “adequately reflect the seriousness of Zhao’s offense…or offer adequate specific or general deterrence.”
Zhao’s lawyers have requested five months’ probation, noting that the crypto billionaire had accepted responsibility for the money laundering violations and has already been away from his family for more than five months after being ordered to remain in the U.S.
Filings made by Zhao’s lawyers include letters from his family, investors, UAE royals, and former U.S. ambassador to China Max Baucus, among others, mentioning his charity work and painting him as a family man.
Big Number
$4.3 billion. That is the total amount in fines and forfeiture Binance has agreed to pay to settle the Justice Department’s case.
Crucial Quote
“Zhao’s willful violation of U.S. law was no accident or oversight. He made a business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets,” federal prosecutors said in their filing.
Key Background
In November last year, Binance pleaded guilty to violating anti-money laundering, unlicensed money transmitting, and sanctions laws, while Zhao pled guilty to money laundering violations. Zhao, who is a UAE and Canada dual citizen, was released on a $175 million bond and ordered to remain in the U.S. Zhao is the second high-profile crypto executive facing sentencing in a high-profile federal case in recent weeks. Last month, former crypto billionaire Sam Bankman-Fried was sentenced to 25 years in prison in an $11 billion fraud case linked to the collapse of his company FTX. Before its sudden collapse in November 2022, FTX was the second-largest crypto exchange behind Binance.
Forbes Valuation
According to our estimates, Changpeng Zhao's total net worth stands at $33 billion as of early Tuesday, making him the 50th richest person in the world.
Correction: The article has been corrected to show that Zhao only pleaded guilty to anti-money laundering violations while Binance also pled guilty to unlicensed money transmitting, and sanctions law violations.
Further Reading
DOJ Seeks 3-Year Prison Sentence For Binance Founder Changpeng Zhao (Forbes)
Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With US (Forbes)
Ex-Binance Chief CZ Must Stay In U.S. After Guilty Plea—For Now (Forbes)
