Binance founder Changpeng “CZ” Zhao’s recent prison sentence for Anti-Money Laundering violations is seen as a way to deter the crypto industry and promote compliance, according to lawyer Aaron Lane. Lane, a senior law lecturer at Melbourne’s RMIT Blockchain Innovation Hub, stated that the term of imprisonment was primarily aimed at general deterrence. He also mentioned that the United States was justified in bringing charges against Zhao for failing to maintain an effective Anti-Money Laundering program. However, Lane clarified that these charges were regulatory in nature and not comparable to the fraud conviction that led to a 25-year prison sentence for FTX co-founder Sam Bankman-Fried. Zhao’s four-month sentence was lower than the recommended 18-month sentencing guideline and significantly less than the three-year jail request made by U.S. prosecutors. Lane explained that judges have broad discretion in determining a just sentence, even with a plea deal. David Chung, the founding director of law firm Creo Legal, believes that Zhao’s imprisonment sends a clear message that the unregulated days of crypto are over. However, he noted that Zhao pleaded guilty to noncompliance with Anti-Money Laundering regulations and not money laundering or any other crime. Zhao, in response to his sentence, expressed gratitude to his supporters and stated that he will serve his time in jail while emphasizing the importance of compliance with existing laws. He also revealed plans to launch an education project centered around blockchain and crypto. Despite the legal challenges, Zhao assured users that their funds on Binance are safe. Binance still faces a lawsuit from the U.S. Securities and Exchange Commission alleging the misappropriation of customer funds, a claim that Binance denies.
Lawyer asserts that the 4-month sentence of Changpeng Zhao serves as a 'general deterrence'