Former Binance CEO Changpeng “CZ” Zhao has been sentenced to four months in prison by a federal judge for violating US anti-money laundering laws. The sentencing took place in the U.S. District Court for the Western District of Washington on April 30, where prosecutors had recommended a three-year sentence for Zhao’s failure to maintain an effective anti-money laundering program while he ran the cryptocurrency exchange.
Despite the prosecution’s recommendation, Judge Richard Jones decided on a four-month prison term for Zhao. The judge noted that there was no evidence Zhao had been informed of specific illegal activities on Binance. Government lawyers argued that Zhao had adopted an approach of asking for forgiveness rather than permission, and should not profit from his actions.
Prosecutor Kevin Mosley emphasized the seriousness of the crime and the need for incarceration as a reflection of that seriousness. Zhao’s legal team argued for probation, citing sealed documents submitted to the court as a compelling factor for the judge to consider. They also highlighted Zhao’s wealth as a potential risk factor in prison.
The case has sparked debate over the appropriate punishment for financial crimes in the cryptocurrency industry. The sentencing of a high-profile figure like Zhao could serve as a warning to others in the industry about the consequences of non-compliance with anti-money laundering laws.