The founder of the cryptocurrency exchange Binance, Changpeng Zhao, was sentenced on Tuesday to four months in federal prison after he and Binance admitted to money laundering charges in a deal reached with prosecutors.
The guilty plea resulted in fines of around $4.3 billion for Binance and $50 million for Zhao, which is unlikely to put a dent in his budget as he was ranked 42nd in the Bloomberg financial service's list of billionaires on Wednesday, with an estimated fortune of just over $36 billion. It mainly consists of his stake in Binance
Zhao is likely to become the richest inmate in a US prison.
As part of the deal with the US Department of Justice's Western District of Washington in Seattle, Zhao, 47, gave up all posts in the company.
Exactly when Zhao will start his prison sentence remained unclear at first. Judge Richard Jones recommended imprisonment in the Seattle region.
Jones recognized that Zhao had come to the United States voluntarily despite the threat of punishment and had cooperated with the investigating authorities. Zhao, a native of China, moved to Canada with his family as a youth and has Canadian citizenship.
The judge considered it unlikely that the Binance founder would commit crimes in future, but at the same time the sentence should also have a deterrent effect.
Zhao said he wanted to build an online education platform in the future.
Binance is a trading platform for digital currencies such as Bitcoin. In terms of trading volume, it is the largest marketplace of its kind. After years of investigations, the US judiciary accused Binance and Zhao of circumventing money-laundering and sanctions laws.
Despite having millions of customers in the US, the operators of the crypto exchange had not set up the prescribed checks. This made questionable money flows totalling around $900 million between the US and Iran, possible Those transactions, however are subject to US sanctions.
According to the US allegations, Zhao instructed Binance employees to communicate with US customers by telephone, among other things, in order to leave no traces.
The Binance case has attracted much less attention than the collapse of its competitor FTX, whose founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud in March.
Binance always emphasized that the US authorities did not accuse the company of embezzling customer funds or manipulating markets. However, US Attorney General Merrick Garland pointed out in November that Binance had also become the world's largest trading centre for cryptocurrencies due to violations of the law.