Federal prosecutors hoping to send a message about crime in the crypto exchange business failed to win a three-year prison sentence for billionaire Changpeng Zhao, founder of Binance, the world's biggest crypto exchange. U.S. District Judge Richard Jones of Seattle imposed a four-month sentence, far below the sentencing guideline's 18-month recommendation and even farther below prosecutors' argument that Zhao, 47, deserved three years' imprisonment, on top of his agreement when he pleaded guilty to violating U.S. anti-money-laundering requirements to step down as CEO and pay a civil fine of $150 million to the Commodity Futures Trading Commission in a related case, the Wall Street Journal reports. Zhao remains Binance's majority shareholder.
By not implementing an effective anti-money-laundering program, Zhao allowed hackers, drug dealers and sanctions violators to use the exchange to move hundreds of millions of dollars, all while making money, prosecutors argued. “Zhao’s willful violation of U.S. law was no accident or oversight,” prosecutors said. “He made a business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets.” Zhao’s lawyers wrote in a sentencing memo that they weren’t aware of a single instance where a first-time offender charged with failing to have effective money-laundering controls was sentenced to prison. The Justice Department just this week asked House lawmakers to enhance the sentencing guidelines for the offense.