Changpeng Zhao, the mastermind behind Binance, the leading global cryptocurrency exchange, has checked into a low-security federal prison in Lompoc, California, to commence his sentence.
According to reliable sources from Latham and Watkins, CZ’s legal team, this information has been confirmed. The crypto community has shown their support and admiration for the former CEO as he begins his time behind bars. A Reddit user even praised CZ, stating that his prison sentence is actually a positive step that safeguards Binance from potential risks. User Isemprelaziale commented, “This is a smart move by CZ.”
After his sentencing, Zhao revealed his plans for the future. He intends to maintain his existing cryptocurrency holdings and engage in passive investing, demonstrating his unwavering confidence and dedication to the digital asset market. He emphasized the significance of compliance with regulations and rules, stating that this period marks a new era for the crypto industry.
In the U.S. District Court for the Western District of Washington, CZ, also known as “CZ,” was sentenced to four months in prison by Judge Richard Jones for money laundering charges related to his cryptocurrency exchange. Additionally, he was ordered to pay a hefty $50 million fine. It is worth noting that CZ’s sentence is considerably shorter than the three-year prison term initially recommended by federal prosecutors. Despite the guidelines suggesting a prison term of 12 to 18 months, CZ’s legal team requested a more lenient sentence of five months of probation.
Before his sentencing, CZ issued an apology for his actions and took responsibility for Binance’s failure to implement an effective Anti-Money Laundering (AML) program. He admitted to having ample time alone for reflection and contemplation. Following Judge Jones’ ruling, Zhao committed to presenting himself at a later date to begin his prison term.
Last November, CZ reached a settlement with the U.S. government to resolve a lengthy investigation into Binance. As part of the agreement, Zhao stepped down as the CEO of the company. The U.S. government also demanded that the former Binance chief pay $4.3 billion in fines and forfeiture for civil regulatory enforcement actions. In addition to the hefty fine, Zhao agreed to pay a $50 million penalty.
For more insights into the world of cryptocurrency exchanges, read our article on the real risks associated with depositing money on these platforms.