Binance founder to spend 4 months in jail

Binance founder Changpeng Zhao has been sentenced to four months in prison for failing to put in place proper money laundering safeguards. Zhao, who once headed the world’s largest cryptocurrency exchange, pleaded guilty in November 2023. Judge Richard Jones said that for Zhao «Binance’s growth and profits were prioritized over compliance with U.S. laws and regulations». While Jones believes Zhao is unlikely to reoffend, the scale of the offense is still notable.

And while Jones believes Zhao is unlikely to reoffend, the scale of the offense is still notable.

Although Zhao is not as well-known as FTX fraudster Sam Bankman-Fried, he is a more important figure in the cryptocurrency world. The Chinese-Canadian entrepreneur founded the Binance exchange in 2017. Although he had to step down as CEO of the exchange as part of a plea agreement, he is still the controlling shareholder of the company, which one person told Bloomberg was «a huge shitcoin casino». Binance had many more tokens listed than competitors such as Coinbase.

A lot more tokens were listed on Binance than competitors such as Coinbase.

Prosecutors say Binance committed more than $898 million in sanctions violations and «violated U.S. law on an unprecedented scale». Zhao and other Binance executives failed to comply with U.S. laws, including the Bank Secrecy Act (BSA), and failed to take proper anti-money laundering measures. As a result, Iranian customers were able to make at least $1.1 million in transactions with U.S. customers in violation of the sanctions. Other sanctioned countries, such as Cuba and Syria, were also able to conduct transactions.

A number of other countries were also able to conduct transactions.

According to the prosecution, the lack of anti-money laundering measures made Binance a platform for financing terrorism, drug trafficking and human trafficking. The prosecutor’s office demanded three years in prison for the businessman. In the fall of 2023, he resigned as head of Binance and pleaded guilty.

Previously, Zhao, who voluntarily came to the U.S. court from the UAE, agreed to pay a $50 million fine. In addition, Binance must pay more than four billion dollars to U.S. authorities.

Binance has also agreed to pay more than four billion dollars to U.S. authorities.