Ex-Binance CEO Changpeng Zhao Gets Four Month Prison Sentence for AML Breaches
Summary:
Ex-Binance CEO Changpeng “CZ” Zhao has been sentenced to four months in prison by a federal judge for violating U.S. Anti-Money Laundering laws. His legal team argued for a less severe sentence, citing Zhao's wealth as a potential risk in prison. The prosecution maintained that despite lack of direct evidence linking Zhao to specific illegal activities, stringent punishment was needed. Zhao apologized and accepted responsibility for Binance’s poor AML structure. The sentence follows Zhao's resignation and $4.3 billion settlement with U.S. authorities. His case is unrelated to an ongoing civil suit filed by the U.S. Securities and Exchange Commission.
Changpeng “CZ” Zhao, the ex-CEO of Binance, has been given a four months imprisonment sentence by a federal judge, on account of breaking U.S. Anti-Money Laundering (AML) laws. A hearing held on April 30 at the U.S. District Court for the Western District of Washington resulted in Judge Richard Jones extending this verdict. The prosecution initially sought a three years term for Zhao’s inability to uphold an effective AML framework during his tenure at Binance, a charge he admitted to in November. However, CZ’s legal team appealed for probation. In court, Judge Jones argued that there was no proof to indicate that Zhao was deliberately partaking in illicit operations within Binance, arguing against the prosecution’s proposal to increase the punishment to three years. During the concluding statements, the govt.’s lawyers painted Zhao’s strategy at Binance as more apologetic than compliant and advised he ought not to benefit from his misconduct. Kevin Mosley, the prosecuting attorney stated, “Imprisonment is a must to signify the gravity of the crime” and suggested that probation will endorse unlawful practices. Zhao's defence cited undisclosed court documents as significant factors that should be considered during sentencing. They also argued for a short-term probation, noting that Zhao's affluent status may pose a threat in prison. Before the pronouncement of the sentence, CZ confessed his wrongdoing and expressed responsibility for Binance’s poor AML implementation. The trial which got postponed from February was originally sequenced after the judgement of ex-FTX CEO Sam Bankman-Fried. He was convicted of seven felony charges in November and given a 25 years jail term, which he has appealed. Attendees at CZ's trial were quick to contrast the two hearings, reporting the latter as less prominent. Justice Department lawyers disapproved of comparisons, stating that the crimes were not personality-driven. Zhao resigned from Binance, pled guilty, and agreed to a $4.3 billion settlement fee against “civil regulatory enforcement actions” in a meeting with U.S. authorities. This has no impact on an ongoing civil lawsuit against Binance, Binance.US, and CZ under the U.S. Securities and Exchange Commission since June 2023. After stepping down as CEO, Zhao has refrained from publicly discussing his case. He unveiled Giggle Academy - an educational initiative for crypto and blockchain-related learning. Binance's subsequent CEO was Richard Teng, previously the head of regional markets. Fahrenheit CEO Alex Mashinsky is set to be the next prominent figure in the crypto arena to face criminal charges, following CZ and Bankman-Fried. His trial is due to start in January 2025. More information on this developing story will be provided once available.
Published At
4/30/2024 10:03:25 PM
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