Binance founder and former CEO Changpeng Zhao (CZ) was sentenced to four months in prison last November after pleading guilty. Zhao was also required to pay a $50 million penalty.
According to WSJ.com, Zhao told the court he was sorry for his behavior and regretted his activities.
“I fully recognize the seriousness of the mistakes I made. I learned an important lesson here I will carry with me.”
Zhao had admitted that he understood that Binance served US users and was thus required to register with FinCEN and implement an effective AML program. The DOJ said that Zhao told employees it was “better to ask for forgiveness than permission” and prioritized Binance’s growth over compliance with US law.
The US Department of Justice pursued Binance, the largest crypto exchange in the world, and its founder due to claims of money laundering, failure to register as a money transmitting business, and violating the Bank Secrecy Act.
Binance had agreed to pay over $4 billion to resolve the DOJ’s investigation into the exchange’s violations. This is one of the largest corporate penalties in US history.
Representatives of the DOJ had explained that Binance’s activities provided sanctioned customers access to American capital and financial services.
Initially, compliance with securities laws was lax, but over time, Binance moved to comply with US rules. In August 2021, Binance began requiring all users to provide KYC information but also allowed users who had not provided KYC to continue trading on the exchange until May 2022.
Between August 2017 and October 2022, US users were said to have conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.
Zhao’s legal counsel had asked the courts to defer to time served instead of prison time. Prosecutors asked the courts for a sentence of three years of incarceration. Even while Zhao must spend time in prison, he will remain one of the most influential and wealthiest participants in the crypto sector. The SEC has also sued Binance.
