Changpeng Zhao, billionaire founder of cryptocurrency exchange Binance, has been sent to a federal prison in Lompoc, California (USA).
In April, Zhao was sentenced to four months in prison after pleading guilty to allowing money laundering through Binance. The sentence for the former Binance CEO was much lower than the prosecutor’s recommendation of 3 years.
“I’m sorry”, Zhao told Judge Richard Jones before receiving the sentence, according to Reuters.
“I believe that the first step in accepting responsibility is being aware of all mistakes,” Zhao told the court. “I failed to implement an adequate anti-money laundering program… I now realize the severity of that mistake.”
Former Binance CEO Changpeng Zhao begins serving prison sentence. Photo: coinmarketcap
In November 2023, Zhao reached an agreement with the US Government to resolve a multi-year investigation into Binance, the world’s largest cryptocurrency exchange. As part of the agreement, Zhao resigned as company CEO. Although no longer in charge, Zhao is said to hold about 90% of the shares.
Zhao was charged with willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act and allowing Binance to process transactions involving proceeds of illegal activity, including both between Americans and individuals in sanctions jurisdictions.
The US asked Binance to pay 4.3 billion USD in fines. Zhao agreed to pay a fine of $50 million.
The founder and former CEO of FTX exchange, Sam Bankman-Fried, is also serving a sentence in federal prison in the US. On seven criminal charges, Bankman-Fried was sentenced to 25 years in prison in March for conspiracy to commit securities fraud. Bankman-Fried was also ordered to pay $11 billion.
Unlike Zhao, Bankman-Fried did not reach an agreement with the government. Instead, other members of his senior team cooperated with prosecutors. Bankman-Fried’s ex-girlfriend, Caroline Ellison, the former CEO of hedge fund Alameda, was a witness during the trial.
(Theo CNBC)