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Key Takeaways
- Binance founder Changpeng Zhao was sentenced to four months in prison for violations of the Bank Secrecy Act during his time at the crypto exchange.
- The Department of Justice (DOJ) sought a three-year prison sentence, while CZ’s lawyers requested probation instead.
- CZ pleaded guilty to DOJ charges last November, stepping down as Binance CEO.
- This is just the latest in a long list of legal actions taken against entities in the crypto industry over the past couple of years, with the founders of a bitcoin wallet also being arrested just last week.
Binance founder and former CEO Changpeng ‘CZ’ Zhao was sentenced to four months in prison in a Seattle courthouse on Tuesday, the AP reported.
Last November, Zhao stepped down as the chief executive of the world’s largest cryptocurrency exchange as he pleaded guilty to violating the Bank Secrecy Act . That plea also led to Binance coughing up about $4.3 billion, resulting in one of the biggest corporate resolutions involving criminal charges for an executive in history.
The U.S. Department of Justice (DOJ) had proposed a three-year sentence, while Zhao’s defense team had requested no prison time, instead suggesting probation. Zhao’s plea deal also included a $50 million fine, which is a small fraction of Zhao’s estimated net worth of just under $40 billion, according to Bloomberg.
Prior to the sentencing, prediction market Polymarket had a sentence of less than six months as the most likely outcome of the available options at a likeliness of 41%. The odds of the DOJ’s proposed three-year sentence or more were at 6%.
Crypto Enforcement Actions Gain Steam
The past couple years have been dramatic in terms of the legal action taken against a wide range of individuals and businesses in the crypto industry.
Recently, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison for fraudulent activities during his time at the exchange. Just last week, the founders of non-custodial, privacy-focused bitcoin wallet Samourai Wallet were arrested on money laundering charges.
The U.S. Securities and Exchange Commission (SEC) also has a number of ongoing cases related to the proliferation of unregistered securities offerings and exchanges in the crypto space, including a recent focus on Ethereum.