The founder of the cryptocurrency exchange Binance, Changpeng Zhao, has been sentenced to several months in prison in the USA. A Seattle judge on Tuesday set the 47-year-old’s sentence at four months, court records show. Zhao and Binance admitted violations of money laundering laws in November. He gave up all positions at the crypto exchange. The prosecution had demanded three years in prison for Zhao, while defense attorneys argued for a suspended sentence.
Zhao is likely to become the richest inmate in a US prison: On Wednesday, he was ranked 42nd in the Bloomberg financial service’s list of billionaires with an estimated fortune of a good $36 billion. It mainly consists of his stake in Binance. It initially remained unclear exactly when Zhao would begin his prison sentence. The judge recommended incarceration in the Seattle area. Judge Richard Jones recognized that, despite the threat of punishment, Zhao came to the US voluntarily and cooperated with the investigative authorities. He believes it is unlikely that the Binance founder will commit crimes in the future – but at the same time the verdict should also have a deterrent effect. Zhao said he wants to build an online education platform in the future.
Binance is a trading platform for digital currencies such as Bitcoin. In terms of trading volume, it is the largest marketplace of its kind. After years of investigations, the US judiciary accused Binance and Zhao of circumventing money laundering and sanctions laws. Despite millions of customers in the USA, the operators of the crypto exchange did not set up the required controls. This made questionable flows of money possible, including around $900 million between the USA and Iran, which is affected by sanctions. According to the prosecution’s allegations, Zhao instructed Binance employees, among other things, to communicate with US customers by telephone so as not to leave any traces.
At the same time, the Binance case attracted much less attention than the collapse of competitor FTX, whose founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud in March. Binance always emphasized that US authorities did not accuse the company of embezzling customer funds or manipulating markets. However, US Attorney General Merrick Garland pointed out in November that Binance had become the world’s largest trading center for cryptocurrencies due to violations of the law. Binance’s admission of guilt resulted in penalties of around $4.3 billion. Zhao personally pays $50 million.