2024-04-30 22:55:53| Engadget
A federal judge has sentenced Binance founder Changpeng Zhao (often known as CZ) to four months in prison, as first reported by The New York Times. Prosecutors had recommended three years. Zhao pleaded guilty in November to violating the Bank Secrecy Act by failing to set up an anti-money-laundering program.
The DOJ accused Zhao of allowing criminal activity to flourish on the crypto exchange. Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform, Treasury Secretary Janet Yellen said in November.
The government accused Binance of refusing to comply with American sanctions and failing to report suspicious transactions related to drugs and child sexual abuse materials. Prosecutors said in court that Zhao had told Binance employees it was better to ask for forgiveness than permission while bragging that if Binance had obeyed the law, it wouldnt be as big as we are today.
Under the plea deals terms, Binance agreed to forfeit $2.5 billion and pay a $1.8 billion fine. Zhao personally paid $50 million as part of the settlement.
Although the charges differed, Zhaos sentence is dramatically shorter than the 25 years fellow crypto figurehead Sam Bankman-Fried received in March. SBF, as hes often known, was convicted on seven counts of fraud and conspiracy for his role at the helm of the crypto platform FTX.
Zhao played an integral role in Bankman-Frieds downfall and the crypto industrys broader decline in the last 18 months. The Binance founder tweeted in November 2022 that his company would liquidate its holdings in FTXs de facto token. He said recent revelations that have came[sic] to light while citing ethical concerns and regulatory risks. The posts not only crushed FTX but the crypto world at large. (They likely helped attract the governments attention as well.) When FTXs wells dried up following the platforms rapid collapse, Zhao briefly agreed to buy the company but quickly backed out.
Prosecutors said Zhaos crime carried a standard federal sentence of 12 to 18 months but argued for a three-year term, describing his crimes as being on an unprecedented scale. But Judge Richard A. Jones saw it differently, sentencing him to a measly one-twelfth of the governments suggested term.
This wasnt a mistake it wasnt a regulatory oops, Kevin Mosley, a DOJ lawyer, reportedly said in court on Tuesday. Breaking U.S. law was not incidental to his plan to make as much money as possible. Violating the law was integral to that endeavor.This article originally appeared on Engadget at https://www.engadget.com/binance-founder-changpeng-zhao-sentenced-to-four-months-in-prison-205550299.html?src=rss
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