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Former Binance boss jailed for four months in US
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OK! The indictment alleges that Binance co-founder and former CEO Changpeng Zhao made a business decision to break U.S. anti-money laundering laws to “line his own pockets”
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The indictment alleges that Binance co-founder and former CEO Changpeng Zhao made a business decision to break U.S. anti-money laundering laws to “line his own pockets”
The founder of cryptocurrency firm Binance was sentenced Tuesday to four months in prison in the United States after pleading guilty to money laundering charges, in the highest-profile cryptocurrency case since Sam Bankman-Fried was jailed.
Changpeng Zhao, a Canadian, resigned from his position at the world’s largest cryptocurrency exchange late last year as part of a settlement with US authorities.
According to investigations by two Treasury agencies, Binance failed to prevent transactions by movements such as the Islamic State group, al-Qaeda or the armed wing of Hamas.
Zhao pleaded guilty to violating U.S. anti-money laundering laws, and Binance agreed in February to pay $4.3 billion to settle the charges.
According to a court filing, prosecutors had asked the judge to impose three years behind bars for a crime that usually carries probation.
“He made the business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets,” Justice Department lawyers said of Zhao in a sentencing memorandum.
“The sentence in this case will not only send a message to Zhao but also to the world.”
Zhao’s lawyers countered in a statement that being punished with probation is fair, appropriate and in line with legal precedent.
They cited Zhao’s acceptance of responsibility along with what they called his philanthropic track record.
“I made mistakes and I must take responsibility,” Zhao, who lives in the United Arab Emirates, said in a post on X, formerly Twitter, in November.
He has been in the United States ever since.
Binance was created in 2017 and has cornered much of the market cryptocurrency-commercial market, turning its founder and CEO Zhao into a billionaire.
While Binance was founded in China, Zhao has moved its operations to other locations internationally following Beijing’s crackdown on the cryptocurrency industry.
Binance operates cryptocurrency exchanges and provides other services around the world, but took a hit when cryptocurrency markets collapsed and regulators began probing the legality of its business.
The volatile sector surged in 2021, with a range of complex products and celebrity endorsements pushing it to a valuation above $3 trillion in 2022.
But a series of scandals, including the November 2022 collapse of Binance’s main rival exchange, FTX, and criminal charges for several industry executives, saw public trust evaporate and investors withdraw their money from cryptocurrencies.
FTX founder Bankman-Fried was sentenced to 25 years in prison in March.
The cryptocurrency industry has rebounded in recent months, thanks in large part to U.S. regulators giving the green light to bitcoin exchange-traded funds (ETFs) that allow investors to trade the asset without actually opening an account cryptographic.
Binance’s new CEO, Richard Teng, told AFP this month that the company has spent hundreds of millions of dollars on compliance and is working closely with regulators.