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- Binance founder CZ has reported to a federal prison in California to begin a four-month sentence.
- CZ’s sentencing is part of a plea deal with U.S. authorities regarding AML charges.
- Founder of FTX Sam Bankman-Fried is serving a 25-year sentence for fraud.
Changpeng Zhao (CZ), the billionaire founder of Binance, has begun a four-month prison sentence at a low-security federal facility in Lompoc, California. Latham & Watkins, Zhao’s defense team, confirmed the former crypto executive is now in custody.
In April, Zhao was sentenced after pleading guilty to charges related to enabling money laundering through his cryptocurrency exchange, Binance.
The sentence is less than the three years federal prosecutors initially sought. Zhao’s defense had requested five months of probation, while sentencing guidelines suggested 12 to 18 months in prison.
Before U.S. District Judge Richard Jones handed down the sentence, Zhao expressed remorse. “I’m sorry,” he stated, acknowledging his failure to implement adequate anti-money laundering measures at Binance. “I believe the first step of taking responsibility is fully recognizing the mistakes,” Zhao added.
In November 2023, Zhao reached a plea deal with the U.S. government, concluding a multiyear investigation into Binance, the world’s largest crypto exchange by trading volume. As part of the settlement, Zhao resigned as CEO of the company.
Zhao’s crimes included the willful omission of an effective AML program, as required by the Bank Secrecy Act, and allowing Binance to facilitate transactions involving illicit funds, including transactions between U.S. residents and individuals in sanctioned jurisdictions.
As a result of Zhao’s actions, the U.S. has imposed $4.3 billion in fines and forfeiture against Binance, with Zhao agreeing to pay $50 million personally. Notably, Zhao’s imprisonment coincides with the crypto industry’s ongoing challenges from another prominent criminal case.
Sam Bankman-Fried, the founder of the bankrupt FTX exchange, is currently serving a 25-year sentence for his role in a fraud conspiracy that caused the collapse of FTX and its affiliated hedge fund, Alameda Research. Unlike Zhao, Bankman-Fried did not enter a plea deal, and his conviction followed the cooperation of other executives from his company with prosecutors.
The post The Fall of CZ: Binance Founder Begins Prison Sentence appeared first on Coin Edition.