Changpeng Zhao, the former chief executive of Binance, was sentenced to four months in prison on Tuesday. The founder of the world’s largest cryptocurrency exchange had pleaded guilty to violations of US anti-money laundering and sanctions laws last year.
Once considered the most powerful crypto industry figure, Changpeng “CZ” Zhao is the second major crypto boss to be sentenced to prison after Sam Bankman-Fried of FTX.
He will go down in history as the richest person to be imprisoned in the US and perhaps even the world. According to a Bloomberg report, however, his personal fortune of $43 billion will remain intact even with the sentence, which is what makes his case so different from Bankman-Fried.
In fact, Zhao’s net worth is likely to grow even more while he is jailed, propelled by the ongoing crypto bull run.
Zhao, 47, had stepped down as CEO of Binance last year. However, his influence on the company is unmistakable, given that the board of directors is dominated by his close friends, the Bloomberg report pointed out. He also retains an estimated 90% stake in Binance.
The sentence imposed by US District Judge Richard Jones in Seattle was significantly shorter than the three years sought by prosecutors, and below the maximum 1-1/2 years recommended under federal guidelines.
It was also much lighter than the 25 years behind bars that Sam Bankman-Fried received in March for stealing $8 billion from customers of his now-bankrupt FTX exchange. Bankman-Fried is appealing his conviction and sentence.
Still, prosecutors cheered the outcome of what had been a years-long investigation into Binance and Zhao, a billionaire who had been living beyond US reach in the United Arab Emirates.
"This was an epic day,” US Attorney Tessa Gorman told reporters outside the courthouse. “Incarceration was critical in this case and we’re pleased with the result.”
(With inputs from Reuters)
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