Binance founder sentenced to four months in prison

Binance founder sentenced to four months in prison

Facing intense legal scrutiny, Mr. Zhao, 47, who goes by the initials CZ, was often dismissive. He described the concerns about Binance as “FUD,” or fear, uncertainty and doubt – shorthand in the crypto world for false rumors intended to hurt a company.

In November 2022, Mr Zhao’s power in the industry increased after he helped topple Mr Bankman-Fried with a series of social media posts that led to a run on FTX’s accounts. When FTX didn’t have the money to pay back its customers, Mr. Zhao briefly agreed to buy the exchange before pulling out of the deal. Soon, Mr. Bankman-Fried was arrested on fraud charges.

A year later, it was Mr. Zhao’s turn to face criminal charges.

In November, Binance agreed to pay $4.3 billion to several US agencies, including the Justice Department, to settle allegations that it allowed terrorist organizations such as Hamas, the Islamic State and Al Qaeda to use its platform. to use. Prosecutors said Binance, under Mr Zhao’s watch, had refused to comply with US sanctions, allowing access to clients in countries including Iran, Syria and Cuba. The company also failed to report any suspicious transactions involving narcotics and child sex abuse materials, the government said.

Mr. Zhao told Binance employees that it was “better to ask for forgiveness than permission,” prosecutors said in a recent lawsuit. He also bragged that if Binance had complied with U.S. law, it wouldn’t be “as big as we are today,” prosecutors wrote.

Ultimately, Mr. Zhao pleaded guilty to a single charge, admitting that he had failed to establish an adequate anti-money laundering system at Binance. He also resigned as CEO and agreed to a $50 million fine. He has a fortune of $33 billion, according to Forbes, making him crypto’s richest executive.

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