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Binance founder sentenced to four months in prison

He is likely to become the richest inmate in a US prison: The founder of the cryptocurrency exchange Binance, Zhao, is expected to be in prison for four months. He admitted violating money laundering laws.

The founder of the cryptocurrency exchange Binance, Changpeng Zhao, has been sentenced to four months in prison in the USA. A judge in Seattle set the 47-year-old Canadian's sentence, court records show. Zhao and Binance admitted violations of money laundering laws in November. He gave up all positions at the crypto exchange.

Questionable money flows – also to Iran

After years of investigation, the US justice system accused Binance and Zhao of circumventing money laundering and sanctions laws. Despite millions of customers in the USA, the operators of the crypto exchange did not introduce the required controls. This made questionable flows of money possible, including around $900 million between the USA and Iran, which is affected by sanctions. According to the prosecution's allegations, Zhao instructed Binance employees, among other things, to communicate with US customers by telephone so as not to leave any traces.

According to the investigators' findings, Binance, among other things, did not take action against transactions that movements such as the international terrorist network al-Qaeda or the Palestinian terrorist organization Hamas made via the platform.

Judge: More crimes unlikely

The prosecution had demanded three years in prison for Zhao – known in the crypto scene as “CZ” – while the defense argued for a suspended sentence. It is unclear when Zhao will begin his prison sentence. The judge recommended incarceration in the Seattle area. He acknowledged that, despite the threat of punishment, Zhao came to the United States voluntarily and cooperated with the investigative authorities. He believes it is unlikely that the Binance founder will commit crimes in the future – but at the same time the verdict should also have a deterrent effect.

Binance's admission of guilt resulted in penalties of around $4.3 billion. Zhao personally pays $50 million.

Zhao wants onlineEducational platform build up

Zhao is likely to become the richest inmate in a US prison: On Wednesday, he was ranked 42nd in the Bloomberg financial service's list of billionaires with an estimated fortune of a good $36 billion. It mainly consists of his stake in Binance. Zhao said he wants to build an online education platform in the future. Binance is a trading platform for digital currencies such as Bitcoin. In terms of trading volume, it is the largest marketplace of its kind.

Binance: No customer funds embezzled

However, the Binance case attracted much less attention than the collapse of competitor FTX, whose founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud in March. Binance always emphasized that US authorities did not accuse the company of embezzling customer funds or manipulating markets.

US Attorney General Merrick Garland pointed out in November that Binance had become the world's largest trading center for cryptocurrencies due to violations of the law.

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