Former Binance CEO, Changpeng Zhao, has been sentenced to four months in jail for breaching United States’ anti-money laundering laws after pleading guilty to the charges.
Prosecutors wanted a three-year term, but Mr Zhao was handed the relatively lighter sentence and a $50 million fine. Binance is to pay $4.3 billion in fines.
Judge Richard Jones said he gave the sentence because Mr Zhao, who is a Canadian and Emirati citizen, had cooperated with law enforcement. He cited numerous letters the court had received that testified to Mr Zhao’s character.
The Department of Justice in its demand for a longer term said Mr Zhao “violated US law on an unprecedented scale” and that his “sentence should reflect the gravity of his crimes”.
Mr Zhao’s lawyers said the billionaire regretted his offense, and he had shown “exceptional acceptance of responsibility and remediation” and argued that he should receive only probation.
Mr Zhao’s sentencing marks another fall of a major figure in the crypto world, following FTX founder Sam Bankman-Fried’s recent 25-year sentence for embezzlement.
Zhao’s offence
Prosecutors accused Binance, under Mr Zhao, facilitated terrorist and criminal activities, including child exploitation.
The justice department said the company failed to comply with US anti-money-laundering laws and to file proper reports with government agencies such as the Financial Crimes Enforcement Network.
This allowed the platform to be used a hub for illicit financial transactions that included extremist groups, criminals and people trafficking child sexual abuse materials.
They said Binance failed to report more than 100,000 suspicious transactions to law enforcement, including those involving US-designated terror groups such as al-Qaida, Islamic State and Hamas.
Zhao speaks
The case underscores the growing scrutiny of cryptocurrency exchanges by US authorities, signalling a crackdown on illicit activities within the crypto sphere.
Binance, founded in 2017 and once dominant in the cryptocurreny market, now faces multiple investigations and legal challenges.
The Nigerian government has an ongoing case against the company, which it accuses of money laundering, terror financing, tax offences and foreign exchange rate manipulation.
Two Binance executives were arrested in Nigeria in February. One later escaped.
Mr Zhao issued a short statement during the hearing, telling the judge that he wanted to focus his efforts on an online education platform and that he had reflected on his actions.
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