According to the latest news from CNBC, Binance founder Changpeng Zhao has begun his four-month sentence in a low-security federal prison in Lompoc, California. The defense team at Latham & Watkins confirmed that the former Binance CEO is currently in custody.
Jail time and charges for Binance founder
Zhao was sentenced to four months in prison in April after admitting to facilitating money laundering on the cryptocurrency exchange. This sentence was significantly lighter than the three-year prison sentence sought by federal prosecutors. The defense had requested five months of probation, while court guidelines had recommended a sentence of 12 to 18 months. Before receiving his sentence, Zhao told the US District Court:
I am sad. I believe the first step to taking responsibility is to fully admit mistakes. Here I have failed to implement an adequate anti-money laundering program. … I now realize the seriousness of this mistake.
Long investigation and resignation as CEO
In November 2023, Zhao, known as “CZ,” reached an agreement with the U.S. government to conclude a multi-year investigation into Binance, the world’s largest cryptocurrency exchange. As part of the agreement, Zhao resigned as CEO of the company. Although he is no longer at the helm of the company, Zhao reportedly retains an estimated 90% ownership in Binance.
Changpeng Zhao also shared his plans after completing his four-month term in Lompoc prison. CZ stated that he plans to continue owning and passively investing in cryptocurrencies after his prison sentence. He emphasized that this period represents a ‘new phase for the cryptocurrency industry’ and emphasized the importance of complying with the regulations and rules.
FTX founder status
Meanwhile, FTX founder and former CEO Sam Bankman-Fried is currently incarcerated in a federal prison in the United States. Bankman-Fried was found guilty of all seven criminal charges filed against her in November. In March, he was sentenced to 25 years in prison for his involvement in securities fraud conspiracies that led to the collapse of the cryptocurrency exchange.
As a result, Changpeng Zhao’s four-month prison sentence caused a stir in the cryptocurrency industry. This incident has reignited discussions about regulating cryptocurrency exchanges and combating money laundering. Time will tell what kind of change will occur in the cryptocurrency markets after CZ’s prison sentence and how this event will affect the future of the industry.
The fact that Sam Bankman-Fried was sentenced to 25 years in prison shows how serious consequences cryptocurrency frauds can have. This incident is a warning to cryptocurrency investors that they should be careful and do detailed research before investing. The future of the cryptocurrency industry remains uncertain. However, such events are likely to lead to increased regulations and inspections.
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