BINANCE FOUNDER. Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, enters the Federal Courthouse in Seattle Tuesday, April 30, 2024. Zhao was sentenced Tuesday to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism. /
BINANCE FOUNDER. Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, enters the Federal Courthouse in Seattle Tuesday, April 30, 2024. Zhao was sentenced Tuesday to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism. / AP

Binance founder sentenced to 4 months

SEATTLE — Changpeng Zhao, founder of the world’s largest cryptocurrency exchange, was sentenced Tuesday, April 30, 2024, to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.

U.S. District Judge Richard A. Jones credited the founder and former chief executive officer of Binance for taking responsibility for his wrongdoing.

Zhao, 47, pleaded guilty in November to one count of failing to maintain an anti-money-laundering program. Binance agreed to pay $4.3 billion to settle related allegations from the U.S. government.

“I failed here,” Zhao told the court Tuesday. “I deeply regret my failure, and I am sorry.”

But the judge said he was troubled by Zhao’s decision to ignore U.S. banking requirements that would have slowed the company’s explosive growth. “Better to ask for forgiveness than permission,” is what Zhao told his employees about the company’s approach to U.S. law, prosecutors said.

“No person — regardless of wealth — is immune from prosecution or above the laws of the United States,” Jones said.

The sentence, which included a previously agreed-to $50 million fine, was far less than the three years the Justice Department had sought, but defense attorneys had asked that Zhao spend no time in prison.

Know your customer

Zhao is the first person ever sentenced to prison time for such violations of the Bank Secrecy Act, which requires U.S. financial institutions to know who their customers are, to monitor transactions and to file reports of suspicious activity.

Prosecutors said no one had ever violated the regulations to the extent Zhao did. If he did not receive time in custody for the offense, no one would, rendering the law toothless, they argued.

“This wasn’t a mistake,” Justice Department lawyer Kevin Mosley told Jones. “When Mr. Zhao violated the BSA, he was well aware of the requirements.” / AP

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