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lite.cnn.com - on gopher - inofficial | |
ARTICLE VIEW: | |
Binance founder is sentenced to 4 months in prison on money-laundering | |
violations | |
By Allison Morrow, CNN | |
Updated: | |
12:02 PM EDT, Wed May 1, 2024 | |
Source: CNN | |
Changpeng Zhao, the founder of the world’s leading cryptocurrency | |
exchange, was sentenced on Tuesday to four months in prison after to | |
charges that he failed to maintain an effective anti-money laundering | |
program. | |
The sentence, handed down in a US federal court in Seattle, is far | |
lighter than the three years prosecutors had argued for. | |
Prior to the sentencing hearing Tuesday, Zhao, who goes by CZ, | |
apologized for mistakes he made as CEO of Binance, the crypto exchange | |
he founded in 2017. | |
“Words cannot explain how deeply I regret my choices that result in | |
me being before the Court,” he said in a letter to the judge. “Rest | |
assured that it will never happen again.” | |
Binance agreed to pay more than $4 billion in fines and other penalties | |
as part of a with the federal government last fall. The company | |
admitted to engaging in anti-money laundering activities, unlicensed | |
money transmitting and sanctions violations. | |
Zhao, who is 47 and has a personal fortune of nearly $40 billion, | |
according to , agreed to step down as CEO and pay $200 million in | |
fines. | |
Following a multiyear investigation, US authorities in November said | |
Binance — the world’s largest crypto exchange — allowed bad | |
actors on the platform, enabling transactions linked to child sex | |
abuse, narcotics and terrorist financing. | |
Further, Binance did not have protocols to flag or report transactions | |
for money-laundering risks, and employees were well aware that such an | |
oversight would invite criminals to the platform. According to court | |
documents, one Binance compliance staffer wrote: “We need a banner | |
‘is washing drug money too hard these days - come to binance we got | |
cake for you.’” | |
Zhao’s sentencing comes just over a month after his former rival, Sam | |
Bankman-Fried, was in federal prison for his role in a yearslong, | |
multibillion-dollar fraud through FTX, which was the second largest | |
exchange crypto exchange before its sudden collapse in the fall of | |
2022. | |
The back-to-back sentencings underscore a harder line the Department of | |
Justice has taken against financial crimes broadly and crypto in | |
particular. | |
Crypto investors and businesses have been keen to shake the | |
industry’s reputation as a financial system for criminals and pivot | |
toward the mainstream. | |
But crypto skeptics tend to view the entire $2 trillion industry with | |
suspicion and say the DOJ hasn’t done nearly enough to combat it. | |
”‘Crime pays’ is the message sent today” by the Justice | |
Department, Dennis Kelleher, CEO of the nonprofit Better Markets, said | |
in statement Tuesday. “It didn’t even charge CZ with money | |
laundering; he was only charged with not having an anti-money | |
laundering program. That’s less than a slap on the wrist.” | |
Clarification: This story has been updated to more fully describe the | |
charges against Zhao. | |
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