Binance Crypto Founder Zhao Begins Serving Time in US Prison: Report
Binance Crypto Founder Zhao CEO of the Binance cryptocurrency exchange, has allegedly begun serving a four-month sentence in a minimum-security federal prison in the United States. According to CNBC, the billionaire turned himself in to prison officials in Lompoc, California, on Friday.
Also read: Zhao writes an apology letter to the judge as he faces jail time.
In April, U.S. District Judge Richard Jones sentenced Zhao, or “CZ,” to jail. Zhao pled guilty to breaching U.S. anti-money laundering rules at Binance, the cryptocurrency exchange he launched in July 2017.
Zhao received a four-month sentence.
Zhao is the second prominent cryptocurrency entrepreneur to be imprisoned in the United States. In March, FTX Exchange founder Sam Bankman- Fried was sentenced to 25 years in prison for $8 billion in fraud and other offences.
Before imposing the term, Judge Jones chastised Zhao for prioritising Binance’s earnings and expansion over compliance with US rules, Reuters reported in April. Binance is the world’s largest cryptocurrency exchange.
“You had the wherewithal, the financial capabilities, and the people power to ensure that every single regulation was followed, and you squandered that opportunity,” Jones told a Seattle federal court at the time
Zhao apologised to the court, saying:
“I apologise.” I feel that the first step towards accepting responsibility is to openly acknowledge one’s shortcomings. Here, I failed to put in place a sufficient anti-money laundering programme.
I realise now how significant that mistake was.”
Jones’ four-month prison sentence was significantly less than the three years sought by prosecutors. According to reports, the punishment fell short of the federal standards’ maximum of one to one and a half years Binance was accused of neglecting to identify and report money laundering issues. Binance failed to identify money-laundering risks.
Binance and Zhao, 47, have been under investigation by US prosecutors for several years. In November, CZ agreed to a settlement with the US government, forcing him to step down as Binance CEO.
According to Bloomberg, Zhao has a personal fortune of up to $40 billion and is estimated to still possess 90% of the bitcoin exchange.
Also read: Cristiano Ronaldo and Binance Launch a New NFT Collection.
Binance also agreed to pay $4.3 billion in fines and penalties as part of the deal with the federal government. Zhao personally paid a fine of $50 million.
According to a CNBC story.
Prosecutors charged CZ with failing to implement an effective anti-money laundering programme at Binance. The exchange was accused of allowing negative actors involved in child sex, drug trafficking, and terrorist financing to operate freely. Authorities claimed Binance lacked systems for flagging and reporting suspicious transactions