BREAKING: Binance Founder Sentenced to 4 Months in Prison

Changpeng Zhao (CZ), founder and former CEO of the leading crypto exchange Binance, has been sentenced to four months in the United States federal prison over charges of fraud involving Binance, The Verge report stated on Tuesday.

A Four-Month Sentence

Last week, the U.S. Department of Justice (DOJ) requested that the Binance founder be sentenced to 36 months in prison. It added that CZ should use the time in lock-up to “reflect the significant harm to US national security caused by his criminal acts.”

CZ’s legal team swiftly countered the DOJ’s request with a memo stressing that such a sentence would be too harsh for their client, considering that similar cases attract a maximum of 18 months in confinement.

In the latest judgement, presided over by Judge Richard Jones, Zhao was found guilty of prioritizing “Binance’s growth and profits over compliance with US laws and regulations.”

Following its inception in July 2017, Binance has become the largest crypto exchange by market capitalization ranking. Part of the reason for the exchange’s surplus market share is that it offered services to individuals in sanctioned regions and Americans without enforcing an effective Know Your Customer (KYC) process. Binance also aided crypto transactions from money laundering activities. Investigations show that CZ, aware of all these, failed to implement the KYC test on the platform.

As part of a plea deal, the Binance founder stepped down from his role as CEO. He also agreed to pay a $50 million fine.

Not Like FTX’s Founder

Notably, CZ’s imprisonment differs from the infamous FTX founder, Sam Bankman-Fried (SBF), who was imprisoned for misusing customers’ funds. FTX, once regarded as one of the leading crypto exchanges, crashed and filed for bankruptcy protection. None of these vices have occurred within Binance.

In a recent court sentencing, SBF faced a 25-year imprisonment, a sharp contrast from CZ’s four-month jail time.

A Bloomberg report confirmed that following his imprisonment, CZ may become the richest person to be jailed in a U.S. prison.