Former Binance CEO Changpeng Zhao sentenced to four months in prison

Binance founder Changpeng Zhao is being sentenced to 4 months in prison after being charged for violating US anti-money laundering rules.

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Changpeng Zhao, founder of crypto exchange Binance, has been sentenced to 4 months in prison. The sentence comes after the ex-CEO pleaded guilty to violating US anti-money laundering rules.Zhao’s sentence follows Sam Bankman-Fried’s 25-year prison ruling following the FTX collapse.

Changpeng Zhao, the founder and ex-CEO of crypto exchange giant Binance, has been sentenced to four months in prison after pleading guilty to charges in a Seattle federal court that the trading platform violated US anti-money laundering requirements.

The sentencing comes after the US Department of Justice recommended in a sentencing memo earlier this month that Zhao, also known as “CZ,'” serve three years in prison and pay a $50 million fine for enabling money laundering on the exchange. The crypto kingpin’s attorneys had suggested he instead only be sentenced to probation, arguing, “No defendant in a remotely similar [Bank Secrecy Act] case has ever been sentenced to incarceration.”

After pleading guilty, Zhao, once one of the wealthiest people in crypto, was directed to step down from the helm of Binance last November. Under his leadership, the former CEO had expanded the company into one of the world’s biggest crypto exchanges.

Binance will also pay a $4.3 billion fine in federal court, part of which will go toward settling a lawsuit the Commodity Futures and Trading Commission launched against the exchange in March 2023. The CFTC lawsuit accused the ex-CEO and his company of “failing to stop illegal trading activity” on the platform.

The charges came around the time when FTX, a rival to Binance, collapsed over allegations in November 2022 that the exchange’s owners had misused customer funds. Sam Bankman-Fried, the CEO of the exchange, was eventually sentenced to 25 years in prison after he was found guilty of multiple fraud charges.

Binance and the US Department of Justice didn’t immediately respond to Business Insider’s request for comment before publication.