Ex-Binance CEO gets 4-month jail sentence for money laundering offenses

Changpeng Zhao, CEO and founder of Binance / Photo credit: MX Global

Changpeng “CZ” Zhao, the ex-CEO of crypto trading platform Binance, will serve a four-month prison term after pleading guilty to breaking US anti-money laundering rules, Reuters reported. This is shorter than the three-year period US prosecutors had proposed in April.

Binance was accused of not reporting more than 100,000 dubious transactions involving recognized terrorist groups like Hamas, al-Qaeda, and Islamic State. The prosecutors also claimed that Binance helped facilitate the sale of child exploitation materials.

“I’m sorry,” Zhao told US District Judge Richard Jones before his sentencing in Seattle. “I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program.”

The court also imposed a US$4.32 billion penalty on Binance. Apart from serving his prison sentence, Zhao is expected to pay a US$50 million criminal fine and another US$50 million to the U.S. Commodity Futures Trading Commission.

Judge Jones took Zhao to task for prioritizing Binance’s growth over legal compliance, despite having “the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with.”

Zhao’s legal woes have led to a tumultuous time at the company he founded in 2017. The Philippines banned Binance in late March. A month after that, the exchange appointed a board for the first time.

See also: US civil suit against Binance.com: What’s the real motivation?