Binance founder bags jail term in US

Binance founder bags jail term in US

The founder of cryptocurrency startup Binance was sentenced to four months in US prison on Tuesday after pleading guilty to money laundering charges in the most high-profile crypto case since Sam Bankman-Fried’s arrest.

Changpeng Zhao, a Canadian, resigned from his position at the world’s largest cryptocurrency exchange platform late last year as part of a settlement with US authorities.

According to two Treasury investigations, Binance failed to prohibit transactions by movements including the Islamic State, al-Qaeda, and Hamas’ military wing.

Zhao pleaded guilty to breaking US anti-money laundering laws, and Binance agreed in February to pay $4.3 billion to settle the accusations.

According to a court file, prosecutors requested that the judge sentence the defendant to three years in prison for a crime that generally results in probation.

“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” Justice Department lawyers said of Zhao in a sentencing memorandum.

“The sentence in this case will not just send a message to Zhao but also to the world.”

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Zhao’s attorneys replied in a filing that being sentenced to probation is equitable, appropriate, and consistent with legal history.

They emphasised Zhao’s acceptance of responsibility and his altruistic track record.

“I made mistakes, and I must take responsibility,” Zhao, who lives in the United Arab Emirates, said in a post on X, formerly Twitter, in November.

He has resided in the United States since that time.

Binance was founded in 2017 and quickly dominated the cryptocurrency trading market, propelling its creator and CEO, Zhao, to billionaire status.

While Binance was created in China, Zhao expanded its operations overseas following Beijing’s crackdown on the cryptocurrency sector.

Binance operates cryptocurrency exchanges and offers other services around the world, but it suffered a significant setback when crypto markets fell and regulators began investigating the legality of its operations.

The volatile business surged in 2021, with a variety of complex products and celebrity endorsements propelling it to a valuation of more than $3 trillion by 2022.

However, a succession of scandals, notably the November 2022 collapse of Binance’s main rival exchange, FTX, and criminal charges against numerous industry officials, eroded public trust and caused investors to withdraw their funds from the cryptocurrency market.

FTX founder Bankman-Fried received a 25-year prison sentence in March.

The cryptocurrency market has recovered in recent months, thanks in large part to US regulators approving exchange-traded funds (ETFs) in bitcoin, which allow investors to trade the commodity without having a crypto account.

Binance’s new CEO, Richard Teng, told AFP last month that the business has spent hundreds of millions of dollars on compliance and is working closely with regulators.

Binance founder bags jail term in US