Binance Founder Completes Prison Sentence
30 Sep, 2024 ● Crypto people
Binance founder and former CEO, Changpeng “CZ” Zhao, was released from a U.S. federal prison on September 27 after serving a four-month sentence for violating Anti-Money Laundering (AML) laws, according to a spokesperson from the U.S. Federal Bureau of Prisons, as reported by Cointelegraph.
CZ had pled guilty to federal charges in November, admitting to failing to implement adequate AML controls at Binance, the world’s largest cryptocurrency exchange by daily trading volume.
As part of the plea deal, he also stepped down as CEO of Binance, per a statement from the U.S. Department of Justice (DOJ) on November 21.
With an estimated net worth of around $60 billion, CZ became the wealthiest individual to have served time in a U.S. prison.
In April, CZ voluntarily returned to the U.S. from Dubai to serve his four-month sentence.
He spent the first two months in a minimum-security prison in southern California before being transferred to a halfway house in Long Beach, where he was permitted supervised daytime activities, according to a Fortune report on September 26.
A Binance spokesperson expressed the company’s support following his release, saying, "We are delighted that CZ will be home with his family," while also noting that although CZ no longer manages or operates Binance, the company continues to thrive under its current leadership, surpassing 230 million users globally.
CZ’s four-month sentence marked a substantial reduction from the 36 months initially sought by the DOJ, which aimed to underscore the seriousness of the violations.
According to the DOJ, CZ’s guilty plea involved not only AML violations but also unlicensed money transmitting and sanctions breaches.
Prosecutors noted that CZ was aware that by not implementing an effective AML program, Binance would facilitate illegal transactions between U.S. users and users in sanctioned countries like Iran.
During an April 30 hearing, Seattle district court Judge Richard Jones justified the reduced sentence, citing a lack of evidence that CZ had direct knowledge of illegal activities at Binance.
As part of the plea agreement, CZ paid a $50 million fine, while Binance was penalized $4.3 billion for breaking U.S. AML regulations.
Despite the case, CZ's personal fortune remains largely unaffected, and he continues to hold a majority stake in Binance, reportedly owning 90% of the exchange.
Sources:
https://cointelegraph.com/news/binance-founder-cz-walks-free-from-us-prison
https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution
https://fortune.com/crypto/2024/09/26/cz-changpeng-zhao-crypto-release-date-binance-founder
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rhHDugrNa6pE/v0
https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution
