Former Binance CEO Changpeng Zhao was sentenced Tuesday to four months in prison for allowing rampant money laundering on the world’s largest cryptocurrency exchange.
The sentence, handed down in a US federal court in Seattle, is far lighter than the three years prosecutors had argued for.
Prior to the sentencing hearing Tuesday, Zhao, who goes by CZ, apologized for mistakes he made as CEO of Binance, the crypto exchange he founded in 2017.
“Words cannot explain how deeply I regret my choices that result in me being before the Court,” he said in a letter to the judge. “Rest assured that it will never happen again.”
“I failed here,” Zhao said before U.S. District Judge Richard A. Jones issued the sentence. “I deeply regret my failure, and I am sorry.”
The three-year prison term prosecutors sought was more than twice the guideline range for the crime. If he didn’t receive time in custody for the offense, no one would, rendering the law toothless, they argued. Binance allowed more than 1.5 million virtual currency trades, totaling nearly $900 million, that violated U.S. sanctions, including ones involving Hamas’ al-Qassam Brigades, al-Qaeda and Iran.
Prosecutors said no one had ever violated the Bank Secrecy Act to the extent Zhao did.
“He says in hindsight he should have done a better job,” Justice Department lawyer Kevin Mosley told the court. “This wasn’t a mistake. When Mr. Zhao violated the BSA he was well aware of the requirements.”
No one has ever been sentenced to prison time for similar violations of the Bank Secrecy Act, defense attorneys Mark Bartlett and William Burck told the judge Tuesday, and Zhao began making changes to make Binance a model of compliance with banking transparency regulations before stepping down.