Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, has been sentenced to four months in prison. This sentencing comes after Zhao pleaded guilty to charges of money laundering. The charges were related to his failure to maintain an anti-money laundering program, which led to the platform being used for illicit activities such as child sex abuse, drug trafficking, and terrorism.
Zhao’s sentencing is a landmark event as he is the first person to be sentenced to prison for violations of the Bank Secrecy Act. This act requires US financial institutions to know their customers, monitor transactions, and report suspicious activities. Prosecutors argued that Zhao’s violation of the act was unprecedented, and if he did not receive time in custody, it would render the law ineffective.
Despite the severity of the charges, Zhao’s sentence was less than the three years sought by prosecutors. In his defense, Zhao’s attorneys argued that there was no evidence of Zhao personally knowing of any specific transaction that would have been barred by US regulations or sanctions. They also pointed out that the suspicious transactions handled by Binance were a minuscule proportion of the company’s total transactions, which averaged about $500 million a day.
In addition to his prison sentence, Zhao was fined $50 million, and Binance agreed to pay $4.3 billion to settle related allegations from the US government. Zhao expressed regret for his failure to establish necessary compliance controls at Binance and assured that the company has now implemented stringent anti-money laundering controls since 2022.
Read more at: www.wired.com