Changpeng Zhao, the founder of the Binance cryptocurrency exchange, walking into the federal courthouse in Seattle on Tuesday to face sentencing Photo: Grant Hindsley for The New York Times
Changpeng Zhao, the former chief executive of Binance, was sentenced on Tuesday to four months in prison after pleading guilty to violating U.S. laws against money laundering at the world's largest cryptocurrency exchange.
Once considered the most powerful crypto industry figure, Zhao, known as "CZ," is the second major crypto boss to be sentenced to prison.
The sentence imposed by U.S. District Judge Richard Jones in Seattle was significantly shorter than the three years sought by prosecutors, and below the maximum 1-1/2 years recommended under federal guidelines.
It was also much lighter than the 25 years behind bars that Sam Bankman-Fried received in March for stealing $8 billion from customers of his now-bankrupt FTX exchange. Bankman-Fried is appealing his conviction and sentence.
Still, prosecutors cheered the outcome of what had been a years-long investigation into Binance and Zhao, a billionaire who had been living beyond U.S. reach in the United Arab Emirates.
"This was an epic day,” U.S. Attorney Tessa Gorman told reporters outside the courthouse. “Incarceration was critical in this case and we’re pleased with the result.”
Before handing down the sentence, Jones faulted Zhao for making Binance's growth and profitability a higher priority than complying with U.S. laws.
"You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity," he said.
Zhao, 47, did not visibly react upon hearing his sentence.
He wore a navy blue suit and tie in the courtroom, with his mother and several other family members in attendance. Defence lawyers had requested probation.
"'Crime pays' is the message sent today," Dennis Kelleher, head of the financial reform advocacy group Better Markets, wrote in an email, noting Zhao will still get to keep his vast wealth.
Prosecutors said Binance employed a "Wild West" model that welcomed criminals and did not report more than 100,000 suspicious transactions with designated terrorist groups including Hamas, al-Qaeda and Islamic State.
They also said Zhao's exchange supported the sale of child sexual abuse materials and received a large portion of ransomware proceeds.
Binance agreed to a $4.32 billion penalty, and Zhao paid a $50 million criminal fine plus $50 million to the U.S. Commodity Futures Trading Commission.
"I'm sorry," Zhao told the judge before being sentenced.
"I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program ... I realize now the seriousness of that mistake."
Much of Binance's misconduct, including its weak money laundering controls, was first reported by Reuters.
Zhao will surrender voluntarily to serve his sentence, most likely at a detention centre near Seattle-Tacoma International Airport.
“Not prioritizing compliance is a few shades below criminal intent. It’s bad, but it’s below the usual requirement of specific intent" that would justify a years-long sentence, said Robert Frenchman, a lawyer specializing in white-collar crime.
But given the scale of Binance’s violations and the massive fines imposed, he should not have expected probation or home detention, Frenchman added.
Prosecutors had told the judge a tough sentence would send a clear signal to other would-be criminals.
"We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster," prosecutor Kevin Mosley said.
But Zhao's conduct, he said, "wasn't a mistake. This wasn't a regulatory 'oops.'"
Zhao stepped down as Binance's chief in November when he and the exchange he founded in 2017 admitted to evading money-laundering requirements under the Bank Secrecy Act.
In seeking probation, defence lawyers said others who admitted to similar wrongdoing, including BitMEX founder Arthur Hayes, were not locked up.
Zhao "wanted to make a difference in the world," but made mistakes, defence lawyer Mark Bartlett said.
Jones said the three-year sentence requested by prosecutors was inappropriate because they did not show that Zhao knew in advance about illegal activity.
"It's always the case the government asks for more than they think they'll get," said Frenchman. "Going that much above guidelines for a pleader is unusually aggressive."
Several other crypto moguls are also in the crosshairs of U.S. authorities after the collapse of crypto prices in 2022 exposed fraud and misconduct across the industry.
Source: Reuters
幣安加密貨幣創始人趙被判入獄四個月
幣安前執行長趙長鵬在承認違反美國反洗錢法律後，於週二被判處四個月監禁。
趙，被稱為“CZ”，曾經被認為是加密貨幣行業最有權勢的人物，是第二位被判入獄的主要加密貨幣老闆。
美國西雅圖地區法官理查德瓊斯 (Richard Jones) 判處的刑期明顯短於檢察官要求的三年徒刑，也低於聯邦指導方針建議的最長 1-1/2 年徒刑。
這也比 Sam Bankman-Fried 在 3 月因從現已破產的 FTX 交易所的客戶那裡竊取 80 億美元而被判處 25 年監禁要輕得多。 班克曼-弗里德正在對他的定罪和判刑提出上訴。
儘管如此，檢察官對對幣安和趙某進行了長達數年的調查的結果感到高興。
“這是史詩般的一天，”美國檢察官泰莎·戈爾曼在法院外對記者說。
在宣判之前，瓊斯指責趙將幣安的成長和獲利能力看得比遵守美國法律更重要。
他說：“你擁有必要的資金、財務能力和人力來確保每一項法規都必須遵守，所以你沒有抓住這個機會。”
47歲的趙在聽到判決後沒有明顯反應。
他在法庭上穿著海軍藍色西裝和領帶，他
的母親和其他幾名家庭成員出席了法庭。 辯護律師請求緩刑。
金融改革倡導組織「更好市場」的負責人丹尼斯·凱萊赫在一封電子郵件中寫道：
「『犯罪付出代價』是今天發出的信息。」
他指出，趙仍將保留自己的巨額財富。
檢察官表示，幣安採用了歡迎犯罪分子的「狂野西部」模式，並且沒有報告與哈馬斯、基地組織和伊斯蘭國等指定恐怖組織的超過 10 萬筆可疑交易。
他們還表示，趙的交易所支持銷售兒童性虐待材料，並收到了勒索軟體收益很大一部分。
幣安同意支付 43.2 億美元的罰款，趙支付了 5,000 萬美元的刑事罰款，另向美國商品期貨交易委員會支付了 5,000 萬美元。
「我很抱歉，」趙在被判刑前對法官說。
“我相信承擔責任的第一步是充分認識到錯誤。在這裡，我未能實施適當的反洗錢計劃……我現在意識到這個錯誤的嚴重性。”
幣安的大部分不當行為，包括其薄弱的洗錢控制措施，都是路透社首先報道的。
趙將自願自首服刑，很可能在西雅圖塔科馬國際機場附近的拘留中心服刑。
「不優先考慮合規性比犯罪意圖低了一些。 專門從事白領犯罪的律師羅伯特·弗蘭奇曼 (Robert Frenchman) 表示，這很糟糕，但它低於通常的「特定意圖」要求，因此可以判處長達數年的徒刑。
但弗蘭奇曼補充說，考慮到幣安違規行為的規模和巨額罰款，他不應該預期會被緩刑或家庭拘留。
檢察官告訴法官，嚴厲的判決將向其他潛在犯罪者發出明確的信號。
檢察官凱文·莫斯利 (Kevin Mosley) 表示：“我們並不是說趙先生就是山姆·班克曼·弗里德 (Sam Bankman-Fried)，也不是說他是一個怪物。”
但他說，趙的行為“不是錯誤。這不是監管部門的‘哎呀’。”
趙於 11 月辭去幣安首席執行官一職，當時他和他於 2017 年創立的交易所承認規避了《銀行保密法》下的洗錢要求。
在尋求緩刑時，辯護律師表示，其他承認有類似不當行為的人，包括 BitMEX 創始人阿瑟·海斯 (Arthur Hayes)，並未被關押。
辯護律師馬克·巴特利特表示，趙“想改變世界”，但犯了錯誤。
瓊斯表示，檢察官要求的三年徒刑是不恰當的，因為他們沒有表明趙事先了解非法活動。
「政府的要求總是比他們想像的要多，」弗蘭奇曼說。 “對辯護人來說，遠遠超出指導方針是異常激進的。”
在 2022 年加密貨幣價格暴跌暴露出整個行業的欺詐和不當行為之後，其他幾位加密貨幣大亨也成為了美國當局的瞄準目標。
Comments