Changpeng “CZ” Zhao, Binance’s founder and former CEO, exited a United States federal prison on Sept. 27 after a term of four months, imposed on him for violating Anti-Money Laundering (AML) rules. This news was confirmed by a representative of the United States Federal Bureau of Prisons. As indicated in a statement by the US Department of Justice dated Nov. 21, CZ confessed to the federal charges of not correctly implementing the AML controls at Binance, the globally leading cryptocurrency exchange by daily trading volumes. He also resigned from his post of Binance’s CEO subsequently.
CZ was penalized with a four-month stay in a US prison. Despite his reported net worth of about $60 billion, he holds the unique position of being the richest person to serve a prison sentence in the country. CZ willingly returned from Dubai to the US in April where he served his first two months in a minimum-security prison in southern California and spent the rest of his term in a halfway house in Long Beach, enjoying supervised daytime excursions.
Positive about CZ’s return, a Binance spokesperson stated: “While he is not managing or operating Binance, we are excited to see what he does next. Binance has continued to flourish under our current leadership, exceeding 230 million global users.” Notably, the original prison span sought by the DOJ was 36 months to signify the gravity of the offense. Yet, CZ’s sentence was reduced to four months, citing a lack of evidence that he was aware of any illegal activities at Binance.
In addition to AML violations, CZ’s guilty plea also consisted of sanctions violations and unlicensed money transmitting. Seattle district court judge Richard Jones justified his decision to assign the four-month sentence, explaining that there was no proof that CZ was informed of any illicit activities happening on Binance.
CZ and Binance agreed to clear a fine of $50 million and $4.3 billion respectively for breaching US AML laws. Despite these considerable fines, the Binance founder’s personal wealth remains unaffected as he continues to hold the dominating stake in Binance.