Binance CEO ‘CZ’ Sentenced to 4 Months for Crypto Violations

Binance CEO Sentenced to Four Months in Prison

Changpeng Zhao, popularly known as “CZ,” the founder and CEO of the world’s largest cryptocurrency exchange Binance, has been sentenced to four months in prison. This sentencing comes after Zhao stepped down from his leadership role last November and pleaded guilty to various violations brought forth by the U.S. Department of Justice and other agencies.

DOJ’s Sentencing Recommendation

Just six days prior to the sentencing, the U.S. Department of Justice had recommended a 36-month prison sentence for Zhao, which would have significantly exceeded the 18-month maximum outlined in his plea agreement, as reported by Coindesk.

Binance’s Admissions and Zhao’s Guilty Plea

In November 2023, Binance admitted to engaging in “anti-money laundering, unlicensed money transmitting and sanctions violations,” according to the DOJ. The agency described the case as the “largest corporate resolution” involving criminal charges against an executive. Zhao pleaded guilty to failing to maintain an adequate anti-money laundering program.

Violations and Deliberate Efforts to Profit

A filing detailing the charges stated that Binance, Zhao, and other related parties “knowingly failed to register as a money services business” and violated the Bank Secrecy Act by not implementing a proper anti-money laundering program. The filing also alleged that the parties deliberately violated U.S. economic sanctions in a calculated effort to profit from the U.S. market without adhering to the country’s laws.

Binance’s Rapid Rise to Dominance

Launched in June 2017, Binance quickly ascended to become the world’s largest cryptocurrency exchange within just 180 days. According to data from CoinMarketCap, Binance boasted a staggering $22.7 billion in trading volume over the past 24 hours, dwarfing the $3.1 billion volume of its closest competitor, Coinbase.

Binance admitted it had “engaged in anti-money laundering, unlicensed money transmitting and sanctions violations,” the DOJ stated, calling it the “largest corporate resolution” that included criminal charges for an executive.