Billionaire in Custody: Former Binance CEO Zhao Begins Prison Term in California

Binance's billionaire founder, Changpeng Zhao, has reported into a low-security federal prison located in Lompoc, California. CNBC contacted Zhao's defense team at Latham & Watkins to verify the news that the former cryptocurrency executive is now in custody.

Zhao received a four-month prison sentence in April after admitting guilt to charges related to facilitating money laundering through his cryptocurrency exchange.

The former Binance chief received a sentence notably shorter than the three years initially sought by federal prosecutors. The defense had requested five months of probation instead. Despite sentencing guidelines recommending a prison term of 12 to 18 months, Zhao was apologetic before US District Judge Richard Jones as he awaited his sentence, as reported by Reuters.

In November, Zhao, commonly known as “CZ,” struck a deal with the US government to resolve a multiyear investigation into Binance, the world’s largest cryptocurrency exchange. As part of the settlement, Zhao stepped down as the company’s CEO.
The scope of his alleged crimes included willfully failing to implement an effective anti-money laundering programme as required by the Bank Secrecy Act, and allowing Binance to process transactions involving proceeds of unlawful activity, including between Americans and individuals in sanctions jurisdictions.

The US ordered Binance to pay $4.3 billion in fines and forfeiture. Zhao agreed to pay a $50 million fine.

Sam Bankman-Fried, the founder and former CEO of FTX, is currently serving a federal prison sentence in the US. He was convicted on all seven criminal counts in November and received a 25-year prison term in March for his involvement in a securities fraud conspiracy related to his cryptocurrency exchange and associated hedge fund, Alameda Research. Additionally, Bankman-Fried was ordered to forfeit $11 billion during the sentencing in Manhattan federal court.

Unlike Changpeng Zhao, Bankman-Fried did not enter into a plea deal with the government. Instead, other members of his executive team cooperated with prosecutors. Caroline Ellison, the former CEO of Alameda and Bankman-Fried's former girlfriend, served as a key witness for the government during his trial.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.