Changpeng Zhao, founder of cryptocurrency firm Binance, has been sentenced to four months in a US prison after pleading guilty to money laundering charges. This is the most high-profile crypto case since Sam Bankman-Fried was jailed.
Zhao, a Canadian, resigned from his position at Binance late last year as part of a deal with US authorities. According to investigations by two Treasury agencies, Binance failed to prevent transactions by groups such as the Islamic State, al-Qaeda, or the armed wing of Hamas.
Zhao pleaded guilty to violating US anti-money laundering laws, and Binance agreed to pay $4.3 billion to settle charges in February.
Prosecutors had asked for a three-year prison sentence, but Zhao’s attorneys argued that probation would be more appropriate, citing his acceptance of responsibility and philanthropic track record.
Binance, founded in 2017, became the world’s largest cryptocurrency exchange platform under Zhao’s leadership. Despite being founded in China, Binance moved its operations internationally after a crackdown on the crypto sector by Beijing.
The cryptocurrency industry faced challenges when crypto markets collapsed, and regulators began probing the legality of its business. Binance, along with other exchanges, saw public confidence wane, and investors withdrew their funds.
FTX, Binance’s main rival, collapsed in November 2022, and its founder, Sam Bankman-Fried, was given a 25-year jail term in March.
Despite these challenges, the crypto industry has rebounded, partly due to US regulators approving exchange-traded funds (ETFs) in Bitcoin. Binance’s new CEO, Richard Teng, stated that the company had invested heavily in compliance and was working closely with regulators to ensure compliance.
