Binance's founder receives 4-month jail sentence due to money laundering allegations.
In a recent court hearing in Seattle, US, Zhao, known as "CZ", received a much lighter sentence than the prosecutors had pushed for.
Before the hearing on Tuesday, Zhao, who is the CEO of Binance - a crypto exchange founded back in 2017 - apologized for the mistakes he made during his time as a leader of the company. In a letter addressed to the judge, he wrote, "I cannot adequately express how regretful I am for the decisions that led me here."
As a part of a negotiated settlement with the federal government some months ago, Binance agreed to pay more than $4 billion in fines and other costs. The company admitted to its involvement in money laundering, operating without a money transmitting license, and violations of sanctions.
As a result of this settlement, Zhao, who is 47 years old and holds a personal fortune of around $40 billion according to Bloomberg, stepped down from his position as CEO and paid a fine of $200 million.
Authorities in the US, who have been investigating Binance for several years, revealed in November that the exchange had allowed criminals to operate on its platform. Transactions related to child sex abuse, drugs, and terrorist financing could be carried out with ease. Additionally, the company failed to put adequate measures in place to identify risky transactions for potential money laundering. A compliance staffer reportedly wrote, "Are laundering drug money too difficult these days? Come to Binance, we have something for you."
In connection with this case, Zhao's sentence comes only a month after Sam Bankman-Fried, another founder of a crypto exchange named FTX, was sentenced to 25 years in prison for his role in a years-long, multi-billion-dollar fraud.
These successive sentences reflect the increasing scrutiny from the Department of Justice (DOJ) towards financial crimes and the crypto industry. However, many crypto investors and companies are working to shake the industry's image and move towards the mainstream.
Critics, on the other hand, remain doubtful of the efficacy of the DOJ's efforts against crypto, with Dennis Kelleher, CEO of the nonprofit Better Markets, stating in a statement, "The Justice Department's message today is that 'crime pays.' They didn't even charge CZ with money laundering; he was only charged with not having an anti-money laundering program. That's practically a slap on the wrist."
Read also:
- Five people die in Russian missile assault; Ukrainian castle reminiscent of "Harry Potter" burns down.
- An insurance organization urges Amazon, FedEx, and similar companies to incorporate more safety technologies in their delivery trucks.
- Haiti's interim government selects a new council president and recommends an acting prime minister.
- Experts disclose specifics of Plato's resting site and concluding moments from a long-standing document.
Source: edition.cnn.com
