Judge in Seattle sentences Changpeng Zhao, crypto mogul, to 4 months in prison

Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency trading platform, was sentenced in Seattle on Tuesday to four months in prison for failing to prevent money laundering on the exchange.

Both Zhao, who is known as CZ, and Binance pleaded guilty last year to failing to implement anti-money-laundering programs, with Binance agreeing to pay $4.3 billion in penalties.

Zhao pleaded guilty to one felony count and agreed to a $50 million fine.

U.S. District Judge Richard Jones delivered the sentence in a packed courtroom at the federal courthouse. Prosecutors had asked for three years in prison, while Zhao’s attorneys had requested probation. The U.S. probation office recommended a five-month sentence.

Jones, from the bench, said the specific violation of the federal Bank Secrecy Act was “unprecedented in terms of the volume, scale and massiveness,” and that Binance “essentially turned a blind eye” to potential terrorism financing and drug trafficking.

“You have to understand that despite wealth, power, or status, no person, regardless of wealth, is immune from prosecution or above the laws of the United States,” Jones told Zhao as he handed down the sentence. “You prioritized Binance’s growth and profits over compliance with United States laws and regulations.”

But he credited Zhao for taking responsibility for his actions, seeking to make amends, and for returning to face the charges from the United Arab Emirates, where he lives, a country without an extradition treaty with the United States.

“I failed here, I deeply regret my failure and I’m sorry,” Zhao said Tuesday, addressing the judge ahead of sentencing. Zhao, who appeared somber and focused throughout the two-hour hearing, spoke for about four minutes, reading from prepared remarks.

“Both of my parents worked really hard to give me opportunities,” he said. “For the next chapter of my life I want to provide opportunities to others.” He has said he is launching a free online learning platform with the goal of providing education to kids around the world.

Zhao’s mother, son and sister attended the hearing. U.S. Attorney Tessa Gorman, the chief federal prosecutor in Western Washington, watched from the back of the courtroom.

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