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Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, has started serving his four-month sentence at Lompoc federal prison in California. Following his release, Zhao plans to resume his active role in the cryptocurrency sector.
According to a report by CNBC, Zhao’s legal team at Latham and Watkins confirmed his incarceration.
The crypto community has shown considerable support for Zhao, expressing admiration for his decision. One Reddit user highlighted that Zhao’s prison sentence is a protective measure for Binance, preventing potential risks to the exchange. User Ilsemprelaziale commented:
“If FTX downfall hit Crypto hard, just imagine what would happen if Binance collapsed. He pleaded guilty and stepped down as CEO.”
Zhao has already outlined his plans for after his prison term. He intends to maintain his cryptocurrency holdings and engage in passive investing, demonstrating his unwavering confidence in the digital asset market. Zhao views this period as “a new stage for the crypto industry,” emphasizing the importance of regulatory compliance.
In April, U.S. District Court for the Western District of Washington sentenced Zhao, also known as “CZ,” to four months in prison for charges related to money laundering at Binance. Judge Richard Jones also imposed a $50 million fine on Zhao. This sentence is significantly lighter than the three years initially recommended by federal prosecutors.
Despite sentencing guidelines suggesting a 12 to 18-month prison term, Zhao’s lawyers had requested five months of probation. Before his sentencing, Zhao expressed remorse for his actions, stating he had taken time to reflect and accept responsibility for Binance’s inadequate Anti-Money Laundering (AML) program.
Following Judge Jones’ decision, Zhao agreed to present himself at a later date to begin his prison term.
In November, Zhao reached a settlement with the U.S. government to conclude a multiyear investigation into Binance. As part of the agreement, Zhao resigned as CEO of Binance. The U.S. also ordered Zhao to pay $4.3 billion in fines and forfeiture for civil regulatory enforcement actions, in addition to the $50 million fine he agreed to pay.