The boss of Binance will serve a four-month prison sentence for failing to properly combat money laundering. His sentence echoes that of Sam Bankman-Fried, fallen star of the crypto world.
The verdict finally fell on April 30, 2024 in the evening: Changpeng Zhao, the charismatic founder of Binance, is going to serve time in prison. The one who was one of the most emblematic figures in the world of cryptocurrencies will serve a four-month sentence for not having fought hard enough against money laundering. “CZ” will not be able to serve his sentence at home: CoinDesk reported that the judge in the case had requested that he spend that time in federal prison.
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The cryptocurrency exchange platform has been in the sights of the American authorities since 2021. They notably accused Binance of having allowed dirty money to circulate, and of not having put in place sufficient identity verification measures. solid, which would have allowed criminals to transfer funds. In order to avoid a trial, Binance agreed to negotiate with the American justice system: the platform had to pay a very large fine (more than $4 billion), and CZ was forced to resign, leaving the reins of the company to Richard Teng. Only one unknown remained: the prison sentence that the former boss would receive.
Changpeng Zhao will serve 4 months in prison
In a message published on May 1, 2024 on X (formerly Twitter), the former boss simply announced that he would “ serve his sentence », and turn this page of his life and concentrate on his next projects, linked to education. He will still continue to invest in cryptocurrencies. “ Our sector has entered a new phase. Compliance is very important. One positive aspect of this whole process is that Binance has been scrutinized. And the funds are safe. »
CZ's sentence is notable in more than one way. The former boss of Binance was one of the most notable personalities in cryptocurrencies, and he still remains very influential in the industry. His time in prison is a very strong symbol, especially since his conviction comes a few weeks after that of Sam Bankman-Fried, his former great rival.
Sam Bankman-Fried (SBF) was the founder and CEO of FTX, the other major crypto exchange, whose impressive fall in 2022 shook up the entire industry. Before its bankruptcy, FTX and Binance were in competition, like their respective bosses, who had diametrically opposed visions on regulation. SBF, which had always been open to the idea of legislating on cryptocurrencies, ultimately stole the funds of users of its platform. As for CZ, who was more closed-minded on the question of regulation, he emerges from the story with his head held high despite his conviction.
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Indeed, the two men, once again, reacted in completely different ways to the problems of their company. While SBF has always refused to collaborate with the American authorities and, throughout the duration of its trial, placed the blame on its former associates, CZ and Binance quickly agreed to reach an agreement with the American justice system. Ultimately, SBF was sentenced to 25 years in prison.