US Sentences Binance Founder CZ to 36 Months in Prison

Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, is set to serve a 36-month prison sentence after pleading guilty to violating anti-money laundering laws, U.S. prosecutors stated in court records on Tuesday.

Zhao, who is scheduled for sentencing on April 30 in Seattle, resigned as Binance’s CEO last November, when he and the exchange admitted to the misconduct and the company agreed to a $4.32 billion fine.

“Considering Zhao’s intentional violation of U.S. law and its consequences, the 36-month sentence as outlined is warranted,” U.S. prosecutors told the U.S. District Court for the Western District of Washington.

The federal sentencing guidelines set a maximum 18-month term for Zhao, who has agreed not to appeal any term until that deadline. He has been free in the U.S. on a $175 million bond.

The U.S. government stated that Binance failed to report over 100,000 suspicious transactions to designated terrorist groups including Hamas, al Qaeda, and the Islamic State of Iraq and Syria (ISIS).

Prosecutors also revealed that Binance’s platform facilitated the sale of child sexual abuse materials and was a significant recipient of proceeds from ransomware. Zhao, commonly known as CZ, has agreed to pay a $50 million fine and step away from Binance, the platform he founded in 2017.

Related: Binance Lists Renzo (REZ) on Binance Launchpool

Binance’s penalties include a $1.81 billion criminal fine and $2.51 billion in restitution. This latest development marks a significant chapter in the cryptocurrency industry, highlighting the increasing regulatory scrutiny facing major players like Binance.

The case raises questions about the responsibility of cryptocurrency platforms to comply with anti-money laundering and terrorist financing regulations, as governments worldwide seek to tighten oversight in this rapidly evolving sector. The impact of Zhao’s conviction on Binance’s operations and the broader crypto market remains to be seen, with stakeholders closely monitoring developments.