The founder of Binance has become the world’s richest prisoner after being sentenced to four months in jail, a surprising setback for the former CEO of the world’s largest cryptocurrency exchange.
On Tuesday, a Seattle judge punished Changpeng “CZ” Zhao for violating US anti-money laundering and sanctions rules, following his guilty plea last year.
A US judge imposed the four-month sentence despite prosecutors’ requests for a three-year sentence, citing the “positive nature” of Mr Zhao’s previous behavior.
His prison sentence will make him one of the wealthiest inmates ever, with a net worth of approximately $33 billion from his ownership of Binance. He stepped down as CEO last year.
In US lawsuit filings, US lawyers claimed Mr Zhao “bragged” about breaking the law while at Binance, allowing criminals to launder money on the site.
The Treasury Department previously accused Binance of failing to prevent terror groups such as Hamas, ISIS, al-Qaeda, and other criminals from performing cryptocurrency transactions on its exchange, claiming it turned a “blind eye” to its legal responsibilities.
Prosecutors said Mr Zhao permitted it to happen because it was the “best way to attract users, build his company, and line his pockets”.
The government of the United States stated, “Zhao bet that he would not get caught and that if he did, the consequences would not be as serious as the crime.”
In response, Mr Zhao’s lawyers claimed that he should not be imprisoned and expressed regret for the harm caused by Binance.
Earlier this year, the business was sentenced to pay $4.3 billion after an inquiry revealed that it assisted users in bypassing sanctions.
During his defence, Mr Zhao apologized for his “mistakes” and stated that the company was working with the government’s inquiry.
He stated that once freed, he intended to build educational technology for impoverished youngsters.
The ruling came weeks after Sam Bankman-Fried, Mr Zhao’s adversary and former CEO of bankrupt cryptocurrency exchange FTX, was sentenced to 25 years for multibillion-dollar fraud.
The sentences imply that the two individuals who once competed for dominance in the trillion-dollar cryptocurrency sector will now both serve time in prison.
FTX was once the world’s second-largest cryptocurrency exchange by trading volume, trailing Binance, and its founders frequently traded insults on social media in a fierce rivalry.
Mr Zhao came close to saving FTX in 2022 before dropping out of the arrangement.
Following the discovery of a multibillion-dollar black hole in its records, FTX filed for bankruptcy in November of the same year.
Mr Bankman-Fried was later found guilty of fraud after siphoning billions of dollars from customer funds for high-risk ventures.
He is appealing his conviction.
Binance, which is situated offshore, has maintained its position as the world’s most popular cryptocurrency exchange.