Changpeng’s sentence was to 4 months in prison
Judge Richard Jones Ordered Zhao to a 36-months in prison for violating the Bank Secrecy Act: The Case against Zhao at Binance
Judge Richard Jones says that Zhao prioritized “Binance’s growth and profits over compliance with US laws and regulations.” While Jones doesn’t think Zhao is likely to reoffend, the scale of the crime is notable.
Binance allowed sanctions violations of more than $898 million, according to prosecutors, and “violated US law on an unprecedented scale.” The Bank Secrecy Act (BSA), along with other US laws, did not comply with the conduct of Zhao and other executives. As a result, Iranian customers were able to transact at least $1.1 million with US customers in violation of sanctions. Other sanctioned countries, such as Cuba and Syria, were able to transact as well.
In the filing, prosecutors requested that Zhao receive a 36-month prison sentence, pointing to the need to “deter others who are tempted to build fortunes and business empires by breaking US law.” The legal counsel for the client said that there had not been any defendants sentenced to imprisonment in a similar case.
By publicly broadcasting his trade, Zhao began the run on FTX that eventually revealed the fraud at the exchange. Bankman-Fried was sentenced to 25 years in prison in March after being found guilty in a jury trial of seven counts of conspiracy and fraud charges.
In coming to an appropriate sentence for Zhao, the judge was required to “look past the guidelines” and factor in context beyond the facts of the underlying crime, says Daniel Richman, a professor of law at Columbia University and former federal prosecutor. The character of the defendants and other factors are included.
In a letter to the judge in advance of the hearing, Zhao apologized for his conduct and accepted responsibility for the failure to establish an effective compliance program at Binance. “Words cannot explain how deeply I regret my choices that result in me being before the Court,” he wrote. I assure you that this will be my only encounter with the criminal justice system.
Daniel Silva is an attorney and a former US prosecutor. Z pleaded guilty to violating the law as required of a financial institution executive. SBF was different: He was improperly using customer funds, gained through fraudulent statements and material omissions of fact.”
The distinction was made thinly-veiled in their own presentence filing. “Mr. Zhao has been convicted only of an AML [anti-money-laundering] compliance failure,” they wrote. “He has not defrauded any investors, there has been no misappropriation of customer funds.” They appear to be saying that their client is not a SBF.
Last year, the DOJ finally secured a number of landmarkcryptocurrencies, and will celebrate the conviction. Silva says that people who criticize the sentence as too light send a healthy message. The goal is to frighten the next CEO of a financial institution from opposing anti-money-laundering regulations.
The sentencing hearing was held in the US District of Washington, and the judge handed down a lighter sentence than the prosecution wanted.
