Helena Lyng Blak
3 weeks ago

Binance Founder Sentenced to Serve Prison Time in Money-Laundering Case

Crypto kingpin faces justice in landmark legal showdown.
KYRENIA, CYPRUS - SEPTEMBER 21, 2018: Binance mobile app on running on smartphone. Binance is a leading cryptocurrency exchange founded by Changpeng Zhao in august 2017. — Photo by Grey82
KYRENIA, CYPRUS - SEPTEMBER 21, 2018: Binance mobile app on running on smartphone. Binance is a leading cryptocurrency exchange founded by Changpeng Zhao in august 2017. — Photo by Grey82

On Tuesday, April 30, 2024, co-founder and former chief executive officer of Binance Changpeng Zhao, who commonly goes by CZ, pleaded guilty to charges of having violated United States laws against money laundering. 

The Chinese-born Canadian billionaire was sentenced in a Seattle court to four months in prison by US District Judge Richard Jones.

The sentence of four months was less than the three years the prosecution had sought and also below the maximum of 1.5 years recommended by federal guidelines.

What is Binance?

Binance is a private company that operates the world’s largest cryptocurrency exchange.

Founded in 2017, the company quickly rose to prominence, already securing the mantle as the leading exchange for crypto in 2018.

The company, which was originally based in China, had to move its servers and headquarters when the country banned cryptocurrency trading in September 2017.

Since then, it has faced multiple investigations and regulations from various nations. In France, for instance, Binance has been investigated for money laundering, and in India, the company’s app has been removed from the App Store and Google Play Store in efforts to prevent Indian investors from using the services to trade crypto.  

Zhao’s Legal Troubles

As for Zhao, his legal troubles began in March, 2023, when the US Commodity Futures Trading Commission (CFTC) alleged in federal court that Binance and Zhao himself had repeatedly broken the rules of the CFTC and “allegedly chose to knowingly disregard applicable provisions of the CEA [Commodity Exchange Act] while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”

At the time, CFTC’s Enforcement Division Principal Deputy Director and Chief Counsel Gretchen Lowe stated: “The defendants’ own emails and chats reflect that Binance’s compliance efforts have been a sham and Binance deliberately chose – over and over – to place profits over following the law.”

Then in June, 2023, the US Securities and Exchange Commission (SEC) accused Binance and Zhao of blatantly disregarding federal securities laws, and, according to Bloomberg, “mishandling customer funds” and “misleading investors and regulators,” suing the company and Zhao on 13 charges.

During the trial against Binance and Zhao, the prosecution argued that Binance’s relatively unregulated model had supported illegal activities, including allowing transactions with terrorist groups such as Islamic State, al Qaeda and Hamas, as well as sales of child sexual abuse material.

An Epic Day

Despite Zhao receiving a milder sentence than the prosecution had sought, the outcome was nevertheless seen as a cause for celebration. 

According to Reuters, US Attorney Tessa Gorman told reporters outside the courthouse that, “this was an epic day.”

She further stated: “Incarceration was critical in this case and we’re pleased with the result.”


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