The founder of cryptocurrency company Binance pleaded guilty to money laundering charges in the United States on Tuesday and was sentenced to four months in prison. This is the most high-profile cryptocurrency case since the incarceration of Sam Bankman Freed.
Canadian Qiao Changpeng resigned from his position at the world’s largest cryptocurrency exchange platform late last year as part of an agreement with US authorities.
Binance has failed to prevent transactions from groups such as the Islamic State, al-Qaeda, and Hamas militants, according to investigations by two financial regulators.
Mr. Chao pleaded guilty to violating U.S. anti-money laundering laws, and Binance agreed in February to pay $4.3 billion to settle the charges. 4,444 According to court filings, prosecutors asked the judge to impose a three-year prison sentence for the crime, which normally results in a suspended sentence.
“Zhao made a business decision that the best way to attract users, build a business, and enrich himself was to violate U.S. law,” Justice Department lawyers said in a sentencing memorandum.
“The sentencing of this case will send a message not only to Zhao but to the world.”
Zhao’s lawyers countered in filings that probation was fair, appropriate and consistent with precedent.
They cited Zhao’s record of philanthropy and what they called a sense of responsibility.
“I made a mistake and I must take responsibility,” Chao, who lives in the United Arab Emirates, said in a November post on X (formerly Twitter).
He has been living in the United States since then.
Founded in 2017, Binance has captured much of the cryptocurrency trading market and made its founder and CEO, Chao, a billionaire.
Binance was founded in China, but following Beijing’s crackdown on the cryptocurrency sector, Chao moved his operations to other overseas locations.
Binance, which operates crypto exchanges and provides other services around the world, has been hit hard by the collapse of crypto markets and regulators beginning to scrutinize the legality of its business. Ta.
The volatile industry experienced a resurgence in 2021, with its value surpassing his $3 trillion mark in 2022 due to various complex products and celebrity endorsements.
However, a series of scandals, including the collapse of Binance’s main rival exchange FTX in November 2022 and criminal charges against multiple industry executives, have eroded public confidence and led investors to withdraw their funds from cryptocurrencies. was salvaged.
FTX founder Bankman Freed was sentenced to 25 years in prison in March.
The crypto industry has rebounded in recent months, largely due to US regulators greenlighting Bitcoin exchange traded funds (ETFs) and investors not actually opening crypto accounts. This is due to the fact that assets can also be traded.
Binance’s new CEO Richard Teng told AFP this month that the company is spending hundreds of millions of dollars on compliance and working closely with regulators.
