Former Binance CEO Changpeng Zhao (center) leaves federal court in Seattle on April 30, 2024.
Jason Redmond | AFP | beautiful images
Binance’s billionaire founder, Changpeng Zhao, reported on a low-security federal prison in Lompoc, California. CNBC has reached out to Zhao’s defense team at Latham & Watkins to confirm that the former cryptocurrency executive is currently in custody.
Trieu already was sentenced to four months in prison in April after pleading guilty to allowing money laundering at his cryptocurrency exchange.
The sentence for the former Binance director was significantly lighter than the sentence three years that federal prosecutors searched for him. The defense asked for five months of probation. Sentencing guidelines prescribe a prison sentence of 12 to 18 months.
According to Reuters, Zhao told US District Judge Richard Jones before receiving the sentence: “I’m sorry.”
“I believe the first step to accepting responsibility is to fully acknowledge the mistakes,” Zhao told the court. “Here I failed to implement an adequate anti-money laundering program. … I now realize the severity of that mistake.”
In November, Zhao, commonly known as “CZ,” reached an agreement with the U.S. government to resolve a years-long investigation into Binance, the world’s largest cryptocurrency exchange. As part of the agreement, Zhao stepped down as CEO of the company.
Although he no longer runs the company, Zhao is said to have about 90% of the shares in Binance.
The scope of his alleged crimes included willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act and allowing Binance to process transactions involving the proceeds from illegal activity, including between Americans and individuals in sanctions jurisdictions.
The United States asked Binance to pay $4.3 billion in fines and confiscation. Zhao agreed to pay a fine of $50 million.
FTX founder and former CEO Sam Bankman-Fried is also serving a sentence in the US federal prison in Bankman-Fried, who was convicted on all seven counts against him in November , was sentenced to 25 years in prison. March for the securities fraud scheme that ruined his cryptocurrency exchange and a related hedge fund, Alameda Research. Bankman-Fried was also ordered to pay $11 billion in forfeitures at his sentencing in Manhattan federal court.
Unlike Zhao, Bankman-Fried reached no agreement with the government. Instead, other members of his C-team cooperated with prosecutors. Caroline Ellison, the former CEO of Alameda and Bankman-Fried’s ex-girlfriend, was the government’s star witness in his criminal trial.
— CNBC’s Jim Forkin contributed to this report.
