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Binance founder sentenced to US prison for money laundering in landmark crypto case

Changpeng Zhao, former head of cryptocurrency giant, faces four-month sentence following guilty plea amid global crackdown on digital assets

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The founder of Binance, one of the world’s largest cryptocurrency exchanges, has been sentenced to four months in a US prison after pleading guilty to money laundering charges. Changpeng Zhao, a Canadian national, stepped down from his role at the helm of the platform late last year as part of a settlement with US authorities.

Investigations by two Treasury agencies revealed that Binance had failed to prevent transactions associated with groups such as the Islamic State, al-Qaeda, and Hamas’ armed wing. Zhao’s guilty plea to violating US anti-money laundering laws, coupled with Binance’s agreement to pay a $4.3 billion settlement in February, underscores the gravity of the case.

Prosecutors had sought a three-year prison term for Zhao, arguing that he knowingly violated US law to bolster Binance’s user base and financial standing. The sentencing, they emphasized, sends a clear message not only to Zhao but to the wider cryptocurrency industry.

Zhao’s attorneys countered, advocating for probation in light of his acceptance of responsibility and philanthropic endeavors. Zhao himself expressed remorse for his actions, stating, “I made mistakes, and I must take responsibility” in a social media post last November.

Binance, founded in 2017 and once a dominant force in the crypto-trading market, has faced significant challenges in recent years. Regulatory scrutiny, market volatility, and internal scandals, including the collapse of its main competitor, FTX, have eroded public trust and investor confidence in the industry.

Despite these setbacks, the cryptocurrency sector has rebounded, buoyed by regulatory approvals for bitcoin exchange-traded funds (ETFs) in the United States. Binance’s newly appointed CEO, Richard Teng, emphasized the company’s commitment to compliance and regulatory cooperation in the wake of Zhao’s sentencing.

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