In the most well-known cryptocurrency case since Sam Bankman-Fried was imprisoned, the founder of the company Binance was sentenced to four months in US prison on Tuesday after entering a guilty plea to money laundering charges.
As part of an agreement with US authorities, Canadian Changpeng Zhao left his position at the biggest bitcoin exchange platform in the world towards the end of last year.
Two Treasury agency investigations claim that Binance was unable to stop transactions by groups such the Islamic State group, al-Qaeda, or Hamas’ military wing.
Zhao admitted to breaking US anti-money laundering regulations, and Binance decided to resolve the legal matter in February by paying $4.3 billion.
In a court file, prosecutors requested that the judge sentence the defendant to three years in prison for a crime for which probation is usually the appropriate punishment.
“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.”
Zhao’s attorneys responded in a document, arguing that probation is a fair, suitable, and compliant punishment.
They mentioned Zhao’s accountability as well as what they claimed to be his charitable background.
In a message on X, the previous Twitter platform, Zhao; a resident of the United Arab Emirates said in November, “I made mistakes, and I must take responsibility.”
Since then, he has been residing in the US.
When Binance was founded in 2017 and gained a large portion of the cryptocurrency trading market, its CEO, Zhao, became a billionaire.
Although Zhao launched Binance in China, the company expanded its operations to other countries following Beijing’s crackdown on the cryptocurrency industry.
When the cryptocurrency markets crashed and authorities started looking into the legitimacy of Binance’s operations, the company—which operates cryptocurrency exchanges and offers other services globally—suffered a serious setback.
With a variety of sophisticated products and celebrity endorsements, the unstable sector saw a boom in 2021 and reached a valuation of more than $3 trillion in 2022.
However, a string of scandals including the primary competitor exchange of Binance collapsing in November 2022 and the indictment of multiple industry executives saw the public’s confidence crumble and investors withdraw their funds from cryptocurrency.
In March, Bankman-Fried, the creator of FTX, was sentenced to 25 years in prison.
The approval of bitcoin exchange traded funds (ETFs) by US regulators, which enable investors to trade the commodity without creating an account, has played a significant role in the current recovery of the cryptocurrency market.
This month, Richard Teng, the newly appointed CEO of Binance, told AFP that the company was closely collaborating with regulators and had spent hundreds of millions of dollars on compliance.
