In a US federal court in Seattle, a much lighter sentence was handed down than the three years prosecutors had sought. Zhao, also known as CZ, expressed regret for his actions as CEO of Binance, the crypto exchange he founded in 2017, prior to his sentencing on Tuesday.
In a letter to the judge, Zhao apologized, stating, “Words cannot explain how deeply I regret my choices that result in me being before the Court. Rest assured that it will never happen again.”
Last fall, Binance reached a settlement with the federal government, agreeing to pay over $4 billion in fines and other penalties. The company admitted to involvement in anti-money laundering activities, unlicensed money transmitting, and sanctions violations.
Zhao, aged 47 with a personal fortune of nearly $40 billion, according to Bloomberg, agreed to step down as CEO and pay $200 million in fines.
Following a lengthy investigation, US authorities accused Binance in November of facilitating transactions linked to child sex abuse, narcotics, and terrorist financing. The exchange lacked protocols to flag or report transactions for money-laundering risks, with employees aware that such oversight would attract criminals to the platform.
Zhao’s sentencing coincides with that of his former rival, Sam Bankman-Fried, who received a 25-year prison sentence for his involvement in a multibillion-dollar fraud through FTX. The consecutive sentences highlight the Department of Justice’s tougher stance on financial crimes, particularly in the crypto sector.
Despite efforts by crypto investors and businesses to shift the industry’s image away from criminal activity towards mainstream acceptance, skeptics remain wary. Dennis Kelleher, CEO of the nonprofit Better Markets, criticized the Justice Department’s leniency, stating, “‘Crime pays’ is the message sent today.”
