Former Binance CEO Changpeng Zhao gets 4 months in jail for AML violations

Changpeng Zhao (aka “CZ”), the founder and former CEO of cryptocurrency exchange giant Binance, has been sentenced to 4 months in prison after a hearing in a Seattle court on Tuesday.

The ruling follows CZ’s guilty plea to breaching know-your-customer and anti-money laundering requirements at its exchange in November. During the hearing, Judge Richard Jones acknowledged that CZ had “accepted responsibility” for his actions and that his actions in Binance were “mitigating”. “There is no evidence that the defendant was ever informed (of illegal activity on Binance),” the judge said, as reported by journalist Nikhilesh De. Jones was immediately skeptical of the Department of Justice (DOJ), arguing that CZ should be sentenced to three years, double the recommended guideline for similar crimes. The DOJ argued that the punishment should be commensurate with the magnitude of CZ’s crime, stating that the Bank Secrecy Act would be “for all intents and purposes a dead letter,” if CZ did not receive significant time in prison. Instead, CZ’s defense argued there was no jail time, citing the previous US case against BitMEX co-founder Arthur Hayes, who instead received two months of probation. Binance has already agreed to pay a $4 billion fine, while CZ paid a $50 million fine as part of a plea deal last year. Some estimates suggest that the crypto-tycoon still has $43 billion to his name. “I recognize the importance of having a robust KYC/(anti-money laundering) program,” CZ said in court on Tuesday. “That’s why I ordered Binance to cooperate with the US investigation.” SPECIAL OFFER (Sponsored) LIMITED OFFER 2024 for CryptoPotato readers on Bybit – Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!