Former Binance CEO, Changpeng “CZ” Zhao, has been sentenced to four months in prison by a United States judge for violating U.S. money laundering laws. Prosecutors had initially recommended a three-year sentence for his failure to maintain an effective Anti-Money Laundering program while at the crypto exchange. However, Judge Richard Jones stated that there was no evidence that Zhao was aware of any specific illegal activities at Binance, rejecting the request to increase the sentence. While a four-month sentence and significant fines may seem lenient, U.S. authorities have been investigating Zhao and his crypto empire for the past six years.
Aaron Lane, a senior law lecturer at Melbourne’s RMIT Blockchain Innovation Hub, commented that the term of imprisonment was mainly for general deterrence. Lane also noted that the charges against Zhao were justified, although they were of a regulatory nature and not directly comparable to the fraud conviction of FTX co-founder, Sam Bankman-Fried, who received a 25-year prison sentence.
The differing treatment of these two industry leaders in the U.S. legal system has raised questions among those in the crypto space and beyond. Additionally, the state of Oregon has become the sixth state to revoke, suspend, or decline to renew Binance.US’ license to operate, following similar actions taken by other states in 2024.
In a separate case, the trial of Binance executives involving money laundering charges has been postponed in a Nigerian court. Lawyers representing Binance claim they have not received the necessary documents to proceed with the case. The trial, which was scheduled to begin on May 2, has been adjourned until May 17 to allow the legal team to review the documents. This trial is unrelated to the tax evasion charges brought against Binance, its head of financial crime compliance, Tigran Gambaryan, and regional manager Nadeem Anjarwalla by Nigeria’s Economic and Financial Crimes Commission.
In another significant development, Alexander Vinnik, co-founder of the crypto exchange BTC-e, has pleaded guilty to money laundering conspiracy. The U.S. Department of Justice revealed that BTC-e processed over $9 billion in transactions during Vinnik’s leadership, with a user base exceeding one million globally. The platform was allegedly used to launder funds obtained from various criminal activities, including hacking, ransomware attacks, and drug trafficking.
Furthermore, the U.S. Justice Department has charged early Bitcoin investor Roger Ver, also known as “Bitcoin Jesus,” with tax fraud. Ver was arrested in Spain based on criminal charges in the U.S., including mail fraud, tax evasion, and filing false tax returns. The U.S. government claims that Ver defrauded the Internal Revenue Service out of approximately $48 million by not reporting capital gains from the sale of Bitcoin and other assets. It is planned to extradite Ver from Spain to the U.S. for trial.