Binance Co-Founder Changpeng Zhao Sentenced to Four Months in Prison After Plea Deal

Changpeng Zhao, the co-founder and former CEO of Binance, the world's largest cryptocurrency exchange, has been sentenced to four months in prison after reaching a plea deal on Tuesday. Zhao pleaded guilty to charges of facilitating money laundering at his crypto exchange.

In a Seattle federal court, U.S. District Judge Richard Jones expressed disappointment, stating, "You had the wherewithal, the financial capabilities, and the manpower to ensure compliance with every single regulation, and yet you failed to do so," as reported by Reuters.

The sentencing, considerably shorter than the three years sought by federal prosecutors, was met with mixed reactions. The defense had proposed a five-month probation. Sentencing guidelines recommended a prison term of 12 to 18 months.

"I’m sorry," Zhao told the judge before receiving his sentence, expressing remorse for his actions. He acknowledged his failure to implement a sufficient anti-money laundering program, stating, "I believe the first step of taking responsibility is to fully recognize the mistakes," as per Reuters.

In November, Zhao, also known as CZ, reached an agreement with the U.S. government to settle a multiyear investigation into Binance, resulting in his resignation as CEO. Despite stepping down, Zhao reportedly maintains an estimated 90% stake in Binance.

Clad in a dark navy suit with a light blue tie, Zhao faced accusations of willfully neglecting to establish an effective anti-money laundering program mandated by the Bank Secrecy Act. He was also accused of permitting Binance to process transactions involving illicit proceeds, including those from Americans and individuals in sanctioned jurisdictions.

As part of the settlement, Binance was ordered to pay $4.3 billion in fines and forfeiture, with Zhao personally agreeing to a $50 million fine. Furthermore, Binance faces lawsuits from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission for alleged mishandling of customer assets and operating an illegal, unregistered exchange in the U.S.

The coordinated effort against Binance and its founder involved the Department of Justice, the Commodity Futures Trading Commission, and the Treasury Department, with the notable absence of the SEC.

In a related development, the trial of Tigran Gambaryan, an executive at Binance in Nigeria, has been postponed by the Federal High Court in Abuja, Nigeria, until May 17th. Gambaryan, along with his company Binance Holdings Limited and another executive, Nadeem Anjarwalla, faces charges of money laundering exceeding $35 million.

The postponement follows a request from Gambaryan's defence lawyer, Tony Krukrubo, who informed the court of their lack of receipt of additional evidence from the prosecution. However, the court bailiff contradicted this assertion, revealing that Gambaryan declined to accept service of the documents at Kuje prison on April 30th. Instead, Gambaryan purportedly requested that the documents be served to Binance Holdings Limited's legal counsel.