World News 1 Mayıs 2024

Former boss of world's largest crypto exchange jailed

Former boss of world's largest crypto exchange jailed

The former boss of the world’s largest cryptocurrency exchange has been jailed for four months for allowing money laundering.

The sentence was handed down to Binance founder Changpeng Zhao, nicknamed CZ, after he pleaded guilty to breaching US anti-money laundering laws designed to prevent terrorist financing and funds going to sanctioned countries.

The prison term was far less than sought by US prosecutors who wanted a three-year term – twice the maximum 18 months recommended under federal sentencing guidelines – to be tough on the man once thought to be the most powerful person in the crypto world.

The defence had called for probation with no prison time for their client. A $50m (£40m) fine has already been paid by Zhao.

Despite the massive fine, he remains a billionaire and the wealthiest crypto executive, according to Forbes, with magazine putting his wealth at $33bn (£26.4bn).

Former boss of world's largest crypto exchange jailed
Image:
Changpeng Zhao

Zhao apologised before his sentencing at a court in Seattle, saying: “I failed here. I deeply regret my failure and I am sorry.”

But district judge Richard Jones told him: “You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity.”

He is the second major crypto boss to go to prison. Last month, the founder of FTX Sam Bankman-Fried was sentenced to 25 years for stealing billions of dollars from the now-bankrupt crypto exchange.

Bankman-Fried has appealed against his conviction and his sentence.

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Sam Bankman-Fried jailed for 25 years

Former boss of world's largest crypto exchange jailed
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A ‘wild west’ model

Zhao stepped down from his role at Binance in November after he and the company admitted evading requirements under the US Bank Secrecy Act.

The company agreed to a $4.3bn (£3.4bn) penalty as prosecutors said it used a “wild west” model that failed to report 100,000 suspicious transactions involving terrorist groups.

Prosecutors had also said Binance supported the sale of child sexual abuse material and received the proceeds of ransomware cyberattacks.

The US Justice Department brought the case as part of its clamp down on criminal activity within cryptocurrency, best known for Bitcoin.

Binance is also being investigated and sued by another US agency, the Securities and Exchange Commission.

The company had once processed about two-thirds of all cryptocurrency transactions.

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