- Binance’s billionaire founder Changpeng Zhao has reported to a low-security federal prison in Lompoc, California.
- Zhao was sentenced to four months in prison in April after pleading guilty to charges of enabling money laundering at his crypto exchange.
- The sentence handed down to the former Binance chief was significantly less than the three years that federal prosecutors had been seeking for him.
Changpeng Zhao, the billionaire founder of crypto exchange Binance, has begun serving his prison sentence at a federal facility in California.
Background on the case
In April 2024, Zhao was sentenced to 4 months in prison after pleading guilty to enabling money laundering at Binance. Prosecutors had sought a 3-year sentence.
As part of a November 2023 deal with the U.S. government, Zhao stepped down as Binance’s CEO. He still owns an estimated 90% stake in the company.
Binance was ordered to pay $4.3 billion in fines and forfeiture. Zhao agreed to pay a $50 million personal fine.
Zhao’s apology and admission
“I’m sorry,” Zhao told the judge at his sentencing, according to Reuters.
“I believe the first step of taking responsibility is to fully recognize the mistakes,” he said. “Here I failed to implement an adequate anti-money laundering program. I realize now the seriousness of that mistake.”
Contrast with Bankman-Fried case
Sam Bankman-Fried, founder of the collapsed FTX exchange, is also in prison. But unlike Zhao, he did not strike a deal with prosecutors.
Bankman-Fried was sentenced to 25 years in March 2024 for fraud. He was ordered to pay $11 billion in forfeiture.
What comes next
Although no longer Binance’s CEO, Zhao still owns most of the company. The crypto exchange paid a massive fine but avoided being shut down.
Zhao will serve his 4-month sentence at a minimum security prison. He may face additional legal action even after his release.
