Changpeng Zhao, the founder and former CEO of Binance, has officially started his four-month prison sentence in California. Zhao, often referred to as “CZ,” reported to a federal prison in Lompoc, California, to serve his sentence following a guilty plea to money laundering charges.
Background and Charges
In April, Zhao was sentenced after pleading guilty to money laundering at Binance. Under his leadership, the cryptocurrency exchange faced a $4 billion penalty from the US Department of Justice. The charges included violations related to anti-money laundering, sanctions, and unlicensed money transmission.
Also Read: Binance Founder CZ Begins Prison Term Amid Money Laundering Scandal
Legal Proceedings
Federal prosecutors initially sought a three-year prison term for Zhao, with sentencing guidelines recommending a term of one to eighteen months. However, Zhao received a reduced sentence of four months after admitting his mistakes before US District Judge Richard Jones. This lenient sentence was part of a deal between Zhao and the US government, which also included his resignation from Binance.
Binance, once a dominant force in the digital asset market, saw its public perception decline in late 2023 following the substantial fine for operational violations in the US. Despite stepping down as CEO, Zhao still holds a 90% stake in Binance but no longer plays any role in the company’s operations.
