Binance’s former chief executive Qiao Changpeng was sentenced to four months in prison on Tuesday after pleading guilty to violating U.S. money laundering laws at the world’s largest cryptocurrency exchange.
The sentence was handed down by U.S. District Judge Richard Jones in Seattle, who requested a three-year prison sentence for Mr. Chao, 47, after prosecutors had asked for a three-year prison sentence, twice the maximum recommended by federal guidelines. was rejected.
Mr. Zhao, known as “CZ,” once considered the most powerful person in the cryptocurrency industry, became the second major cryptocurrency boss to be sentenced to prison. In March, Sam Bankman Fried was sentenced to 25 years in prison for stealing $8 billion from customers of the bankrupt FTX exchange.
Bankman Freed is appealing the conviction and sentence.
Before handing down his sentence, Jones accused Zhao of prioritizing growth and profit over following U.S. law.
“You had the money, the financial power, the manpower to make sure you complied with all the regulations, and you missed that opportunity,” he said.
Mr. Zhao, wearing a dark blue suit and tie, did not react to the verdict.
Prosecutors say Binance employs a “wild west” model that welcomes criminals and has failed to report more than 100,000 suspicious transactions with designated terrorist organizations, including Hamas, al-Qaeda, and the Islamic State. Stated.
It also said Zhao’s exchange helped sell child sexual abuse material and received the bulk of the ransomware proceeds. Binance agreed to a $4.32 billion penalty.
“I’m sorry,” Zhao told the judge before sentencing.
“I think the first step in taking responsibility is to fully recognize the mistake. Here I failed to put in place an adequate anti-money laundering program…I now realize the gravity of that mistake. doing.”
Prosecutors told the judge that a harsh sentence would send a clear signal to other would-be criminals.
“We are not suggesting that Mr. Chao is Sam Bankman Freed or that he is a monster,” said prosecutor Kevin Mosley. However, he said Mr. Zhao’s actions were “not a mistake.” This was not a regulatory “oops.” ”
Chao resigned as head of Binance in November, admitting that he and the exchange he founded in 2017 had evaded money laundering requirements under the Bank Secrecy Act.
Mr. Zhao’s lawyer accepted responsibility, paid a $50 million criminal fine, and applied for probation.
He also said that others who admitted similar wrongdoing, including BitMEX founder Arthur Hayes, had not left prison.
Defense lawyer Mark Bartlett said Mr Zhao “wanted to make a difference in the world” but had also made mistakes.
Jones argued that a three-year sentence was inappropriate because prosecutors failed to show that Zhao had prior knowledge of the illegal activity.
“The government always demands more than expected,” said Robert Frenchman, a lawyer who specializes in white-collar crime. “Any action that significantly exceeds the guidelines for a petitioner is unusually offensive.”
Several other crypto tycoons are also in the crosshairs of US authorities after the 2022 crypto price crash exposed industry-wide fraud and fraud.
Mr. Zhao was released on $175 million bail and agreed not to appeal any sentence within federal guidelines. Mr. Zhao also paid $50 million to the Commodity Futures Trading Commission.
