Former Binance CEO Changpeng “CZ” Zhao was handed a four-month prison sentence on April 30 in a Seattle courtroom for breaching US money laundering laws, following extensive investigations by US authorities. During the trial, Judge Richard Jones stated that there was no evidence to suggest that Zhao had any knowledge of any illegal activities taking place at Binance, rejecting a recommendation from the Department of Justice (DOJ) to increase the sentencing guideline. US authorities have been investigating the former executive and his cryptocurrency empire for the past six years, making a four-month sentence, along with billions of dollars in fines, appear lenient. From 2018 to 2024, Binance faced numerous investigations involving the DOJ, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, among other agencies. Cointelegraph’s timeline of events highlights the crackdown on Binance over the past few years. Here’s a recap:
– February 2018: Department of Justice begins investigating Binance for compliance with US Anti-Money Laundering laws and sanctions.
– March 2021: The Commodity Futures Trading Commission investigates whether Binance offered crypto derivatives to US customers without registering with the agency.
– February 2022: Binance Holdings and Binance.US are under investigation by the SEC for their connection to trading firms Sigma Chain AG and Merit Peak.
– June 2022: The SEC initiates an investigation into Binance Holdings’ 2017 initial coin offering (ICO) for potential unregistered securities sales.
– March 2023: Binance CEO CZ, compliance chief Samuel Lim, and the exchange are sued by the Commodity Futures Trading Commission for trading irregularities and market manipulation.
– May 2023: The DOJ launches another investigation on Binance for potential violations of US sanctions.
– June 2023: The SEC files charges against Binance and CZ for violations of securities law, including inadequate market oversight and potential wash trading.
– July 2023: Senior executives on the Binance.US team leave the company, starting a wave of departures across Binance’s firms.
– August 2023: The DOJ expresses concern about a possible bank run affecting Binance’s consumers.
– September 2023: Binance.US lays off a third of its workforce and CEO Brian Shroder resigns.
– November 2023: CZ steps down as CEO following a $4.3 billion settlement with US authorities, and Richard Teng takes over as CEO of Binance.
As part of the settlement, Zhao pleaded guilty to one felony charge and expressed his responsibility for the mistakes made.