Former Binance CEO Changpeng “CZ” Zhao has been sentenced to four months in prison by a federal judge for violating U.S. money laundering laws. The sentencing took place on April 30 in the U.S. District Court for the Western District of Washington. Prosecutors had recommended a three-year sentence, but CZ’s lawyers requested probation instead.
During the hearing, Judge Richard Jones stated that there was no evidence that Zhao had knowledge of specific illegal activities at Binance, rejecting the prosecutors’ request to increase the sentence. The government’s attorneys argued that CZ had sought forgiveness rather than permission at Binance and should not be allowed to profit from his actions.
The defense team for Zhao referred to sealed documents presented to the court as a compelling factor for the judge to consider during sentencing. They also argued that probation for less than six months would be appropriate due to Zhao’s wealth potentially making him a target in prison.
Before being sentenced, CZ apologized for his actions, expressing remorse and accepting responsibility for Binance’s failure to implement an effective Anti-Money Laundering program. Following the judge’s decision, Zhao stated that he would report to prison at a later date.
The hearing, originally scheduled for February, was delayed to follow the sentencing of former FTX CEO Sam Bankman-Fried, who was found guilty of seven felony charges. Bankman-Fried was sentenced to 25 years in prison, and his lawyers have filed an appeal for both the conviction and sentence.
While CZ’s hearing was not as high-profile as Bankman-Fried’s trial, attendees noted that the crimes should not be compared based on the personalities involved.
Changpeng Zhao resigned as Binance CEO and pleaded guilty to the felony charge as part of a settlement with U.S. authorities. Binance agreed to pay $4.3 billion for civil regulatory enforcement actions, but this settlement did not affect an ongoing civil suit filed by the U.S. Securities and Exchange Commission against Binance, Binance.US, and CZ.
After his resignation, Zhao stated that he would stay off Twitter and has not publicly commented on the criminal case. He later launched Giggle Academy, an educational project focused on crypto and blockchain for young people. Richard Teng, the former head of regional markets at Binance, took over as CEO after Zhao’s departure.
Alex Mashinsky, the former CEO of Celsius, is expected to be the next significant figure in the crypto space to face charges after Bankman-Fried and Zhao. His criminal trial in the United States is scheduled to begin in January 2025.