Binance founder Zhao begins 4-month prison sentence for money laundering

Changpeng Zhao, the founder of Binance, has entered a low-security federal prison in Lompoc, California.

This movement comes after Zhao pleaded guilty to complicity in money laundering on the site, which earned him his sanction in April. Zhao, also known as CZ in the cryptocurrency industry, began his four-month prison sentence after a legal fight in which federal prosecutors sought a significantly harsher sentence.

Court proceedings and sentencing details

Initially, prosecutors sought a three-year sentence, while the Latham & Watkins defense team argued for five months of probation. Sentencing guidelines recommended a period of 12 to 18 months. Ultimately, U.S. District Judge Richard Jones imposed a significantly reduced sentence of four months.

Before receiving his sentence, Zhao appeared in court to express his regret and accept full responsibility for the mistake. “I’m sorry,” Zhao said, according to Reuters. He said,

“The first step to accepting responsibility is to openly acknowledge your faults. I should have created an effective anti-money laundering program…I now see the seriousness of this mistake.

Furthermore, this revelation marked a turning point in this case, demonstrating Zhao’s recognition of the seriousness of his actions and their consequences.

Comparisons with the case of Sam Bankman-Fried

Zhao’s prison sentence drew comparisons to another high-profile case in the cryptocurrency world involving Sam Bankman-Fried, the founder and former CEO of FTX. Bankman-Fried is currently serving a much longer sentence sentence 25 years in federal prison.

Bankman-Fried’s downfall was precipitated by the collapse of his cryptocurrency exchange and associated hedge fund, Alameda Research, after he was convicted of seven counts of securities fraud conspiracy . In addition to his prison sentence, Bankman-Fried was forced to pay $11 billion in forfeiture, a considerable financial loss given the scale of the scam.

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