- Changpeng Zhao has begun his four-month prison sentence after pleading guilty to enabling money laundering
- Zhao has been assigned prisoner number 88087-510 at FCI Lompoc II, a low-security federal prison
- The former Binance CEO may be released early for good behavior
Former Binance CEO Changpeng Zhao started his four-month prison stay yesterday after pleading guilty to charges of enabling money laundering. The 47-year-old will serve his time in a low-security federal prison in Lompoc, California, where he has been assigned prisoner number 88087-510. Zhao will spend his time in Federal Correctional Institution (FCI) Lompoc II, one of two prisons in the complex, and is likely to be released early with good behaviour.
Zhao Realizes “Seriousness” of Crimes
Zhao was sentenced to the term a month ago for his role in failing to implement an effective anti-money laundering program at Binance, the world’s largest cryptocurrency exchange. This sentence is considerably shorter than the three years sought by federal prosecutors and the sentencing guidelines, which recommended a prison term of 12-18 months.
Before receiving his sentence from US District Judge Richard Jones, Zhao expressed remorse, saying, “I believe the first step of taking responsibility is to fully recognize the mistakes.” Zhao acknowledged his failure to implement an adequate anti-money laundering program during his time with Binance, adding, “I realize now the seriousness of that mistake.”
$4.3 Billion Settlement
In November last year, Zhao reached a settlement with the US government to resolve a multiyear investigation into Binance. As part of the agreement, Zhao resigned as the company’s CEO, though he still holds an estimated 90% stake in Binance. The government ordered Binance to pay $4.3 billion in fines and forfeiture, while Zhao agreed to a personal fine of $50 million.
Zhao’s offenses included willfully neglecting to establish an effective anti-money laundering program as mandated by the Bank Secrecy Act. This failure allowed Binance to process transactions involving the proceeds of illegal activities, including transactions between Americans and individuals in sanctioned jurisdictions.
