The founder of Binance, Zhao, was sentenced to four months in prison for breaking money laundering laws

Changpeng Zhao, the founder of Binance, is now the second well-known cryptocurrency CEO to receive a prison sentence.

Changpeng Zhao, the founder and former CEO of Binance, admitted guilt to breaking US money laundering regulations at the biggest cryptocurrency exchange in the world and was sentenced to four months in prison on Tuesday.

Zhao, also known as “CZ,” was once a well-known player in the cryptocurrency sector and is the second significant executive in the sector to receive a prison sentence.

The punishment was imposed by U.S. District Judge Richard Jones in Seattle; it was less than the three years that the prosecution had requested and the maximum of one and a half years that were suggested by federal guidelines.

Furthermore, it was noticeably less severe than the 25-year term that Sam Bankman-Fried was given in March for stealing $8 billion from clients of his now-defunct FTX exchange. Currently, Bankman-Fried is contesting his verdict and punishment.

Prosecutors saw the conclusion as a triumph despite the lesser term following a protracted investigation into Binance and Zhao, who had been living in the United Arab Emirates outside the jurisdiction of U.S. authorities.

Tessa Gorman, the U.S. Attorney, praised the outcome as “an epic day” and emphasized the significance of incarceration in the case.

Judge Jones criticized Zhao prioritizing Binance’s growth and profitability over adherence to U.S. regulations before imposing the punishment, pointing out that Zhao had the means to guarantee regulatory compliance but had chosen not to do so.

Wearing a navy blue suit and tie, Zhao, 47, stayed calm as his punishment was read out in front of his family members in the courtroom. The judge chose to impose a short prison sentence despite the defense team’s request for probation.

Dennis Kelleher, the leader of the financial reform advocacy group Better Markets, was among many who voiced discontent with the sentence, arguing that Zhao’s wealth would shield him from the full repercussions of his actions.