News 1 May 2024
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Author: GRM DAILY

Binance billionaire founder sentenced to jail

Author GRM DAILY
1 May 2024
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The founder of Binance, Changpeng Zhao, commonly known as CZ, has been sentenced to a four-month jail term for his involvement in allowing money laundering activities.

This decision came after Zhao admitted to violating US anti-money laundering laws, aimed at preventing terrorist financing and funding for sanctioned countries.

Despite prosecutors seeking a harsher three-year sentence, twice the maximum recommended by federal guidelines, Zhao was given a comparatively lenient punishment. He has also paid a hefty $50 million fine.

Despite this setback, Zhao remains a billionaire, holding the title of the wealthiest executive in the crypto world, with Forbes estimating his wealth at $33 billion.

Expressing remorse, Zhao apologised during his sentencing at a Seattle court, acknowledging his failure to ensure regulatory compliance. However, District Judge Richard Jones admonished Zhao, saying, “You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity.”

This marks the second instance of a major figure in the crypto world facing imprisonment, following FTX founder Sam Bankman-Fried’s recent sentencing to 25 years for embezzling billions from a now-defunct exchange. Bankman-Fried has appealed against his conviction and sentence.

Zhao stepped down from his position at Binance in November, following admissions of evasion under the US Bank Secrecy Act. B

inance, once processing a significant portion of global cryptocurrency transactions, faced a $4.3 billion penalty for its failure to report suspicious transactions and its alleged involvement in facilitating criminal activities, including supporting the sale of illicit materials and benefiting from ransomware cyberattacks.

The case against Binance comes amidst heightened scrutiny from US authorities regarding criminal activities within the cryptocurrency sphere, predominantly associated with Bitcoin.

Binance is also facing investigations and legal action from the Securities and Exchange Commission (SEC).

[Image via Shutterstock]