u.today
Former Binance CEO Changpeng Zhao has been sentenced to four months in prison. The judge, who described the sentence as "appropriate" and "reasonable" said that Zhao had the personnel and resources to comply with US laws, but the entrepreneur failed to do so.
Notably, Zhao, who has a net worth of a whopping $33 billion, is going to be the richest US inmate ever.
During a sentencing hearing in Seattle, Judge Richard Jones disagreed with the DOJ's request to push the sentence to three years (above the existing sentencing guidelines). He mentioned that there was no evidence that Zhao was informed of the exchange's illegal activity.
However, the DOJ cited a previous case where a judge was able to infer a defendant was aware of illicit activity. According to the DOJ's attorney, violating the US law was "integral" to Binance's business model, and failing to punish CZ with incarceration would turn the Bank Secrecy Act (BSA) into a dead letter.
The DOJ further stated that Binance and its former boss encouraged stricter compliance rules only after they got caught. Hence, these efforts do not merit a probation sentence, which is something that Zhao's lawyers were pushing for. The DOJ's attorney predicted that such a slap on the wrist would actually serve as an incentive for others to violate US law on "the largest scale possible."
The defense attorney also pointed to the case of former BitMEX CEO Arthur Hayes to argue against incarceration.
Zhao, who also had a chance to speak during his sentencing, took responsibility for failing to set a KYC/AML program, but the Binance founder also mentioned that he later directed Binance to cooperate with the government.