Binance and court session. Judicial hammer on the background of the logo. Source: Александр Поташев - stock.adobe.com

Key Takeaways:

Changpeng Zhao, the former CEO of Binance, has been sentenced to four months in prison after pleading guilty to violating U.S. money laundering laws, which was significantly less than the three years suggested by prosecutors.
The sentence is part of a broader settlement, including Binance’s agreement to pay $4.3 billion in fines related to civil regulatory enforcement actions.
Following his resignation and the sentencing, Zhao has shifted his focus to educational initiatives, launching Giggle Academy to promote blockchain and crypto knowledge among youth.

Former Binance CEO Changpeng Zhao, widely known as CZ, has been sentenced to four months in prison following his guilty plea for violating U.S. money laundering laws.

Zhao, who had been allowed to travel within the United States on a $175 million bond since his plea in November, faced a potential three-year imprisonment as suggested by prosecutors, but ultimately received a lesser sentence.

JUST IN: Former Binance CEO Changpeng Zhao sentenced to 4 months in prison. pic.twitter.com/i1gdlcTWzs
— Bitcoin Magazine (@BitcoinMagazine) April 30, 2024

During the sentencing at the U.S. District Court for the Western District of Washington on April 30, Judge Richard Jones determined the final sentence.

Despite the prosecution’s push for a three-year term citing Zhao’s inadequate management of Binance’s Anti-Money Laundering (AML) protocols, Judge Jones noted a lack of direct evidence linking Zhao to specific illicit activities on the platform.

Prosecutor Kevin Mosley emphasized the necessity of imprisonment to underscore the gravity of the offense and argued against probation, which could seemingly encourage similar legal breaches on a grand scale.

Conversely, Zhao’s defense highlighted his vulnerability due to his wealth, suggesting probation as a safer alternative, and presented sealed documents as a substantial factor for a lighter sentence.

Zhao expressed regret for his oversight at Binance, acknowledging his time of reflection and accepting responsibility for the exchange’s failure to maintain a robust AML framework.

He is set to report to prison at a future scheduled date.

BREAKING: Binance Founder And Ex-CEO Changpeng Zhao Sentenced To Four Months In Jail By U.S. Court For Money Laundering | Sahara Reporters https://t.co/slKdtTdbRj pic.twitter.com/2Q6QcG9UBM
— Sahara Reporters (@SaharaReporters) April 30, 2024

This sentence follows closely after the high-profile case against Sam Bankman-Fried, former CEO of FTX, who received a 25-year sentence, with his legal team initiating an appeal.

Zhao’s legal troubles stem from a broader settlement with U.S. authorities, where Binance agreed to pay $4.3 billion in relation to civil regulatory enforcement actions.

This settlement does not resolve an ongoing civil lawsuit involving Binance, Binance.US, and Zhao himself, initiated by the U.S. Securities and Exchange Commission.

Following his resignation in November, Zhao has withdrawn from public commentary, particularly from social platforms like Twitter, and has launched Giggle Academy, an initiative focusing on blockchain and crypto education for youth.

Richard Teng succeeded Zhao as the CEO of Binance.