By Anjali Kochhar
Changpeng Zhao, the founder of Binance, often known as CZ, was given a four-month prison sentence for permitting terrorist organizations and cybercriminals to operate on the Binance platform. Tuesday was the sentence in Seattle, under the direction of US District Judge Richard Jones.
Despite prosecutors’ request for a three-year sentence, Judge Jones opted for a shorter prison term, emphasizing that no one is above the law, regardless of their wealth or status. Zhao, 47, arrived at court accompanied by a team of lawyers, while his family members witnessed the proceedings from the front row.
The punishment caps up a lengthy Justice Department probe into Binance’s practices, which has overshadowed the exchange and its CEO. Zhao pled guilty in November to failing to establish effective anti-money laundering procedures on the platform, which resulted in illicit actors using Binance for a variety of illegal purposes.
In his defense, Zhao’s lawyers argued against a prison sentence, citing his non-US citizenship and the risk he would face in a US correctional facility. However, Judge Jones deemed the crime “unprecedented,” given its scale and impact, involving millions of dollars and facilitating transactions for terrorist groups like Hamas.
Zhao expressed remorse during the hearing, stating that he had accepted responsibility for his actions by traveling to the US to plead guilty. Despite his legal troubles, Zhao remains a prominent figure in the cryptocurrency industry, with a personal fortune that has continued to grow.
The case underscores the challenges faced by cryptocurrency exchanges in complying with regulatory requirements, especially regarding anti-money laundering and sanctions laws. While Zhao’s sentence may serve as a warning to others in the industry, it also highlights the ongoing scrutiny and regulatory pressure on crypto platforms.
Zhao’s lawyers emphasized his contributions to the crypto space, portraying him as someone who sought to “change the world” through his involvement in digital currencies. However, the prosecution argued that Zhao’s actions were deliberate and warranted a more severe punishment.
As the founder of one of the world’s largest cryptocurrency exchanges, Zhao’s legal troubles have significant implications for Binance and the broader crypto industry. Despite his impending prison term, Zhao’s personal wealth has continued to soar, reflecting the volatile nature of the digital asset market.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
