Photographer: David Ryder/Bloomberg
Zhao pleaded guilty in November, and on April 30 received a 4-month prison sentence.
«You had the financial ability and authority to ensure compliance with each individual regulation, but you failed to take advantage of that opportunity,» said U.S. District Judge Richard Jones Zhao, according to according to Reuters.
Federal prosecutors demanded 3 years in prison for Zhao, while the defense insisted on 5 months of probation.
«I am very sorry,» Zhao said. «I believe that the first step to accepting responsibility is to fully admit mistakes. I failed to implement an adequate anti-money laundering program… I now realize the seriousness of this mistake».
In November, Zhao, better known as CZ, entered into an agreement with the US government to complete of a multi-year investigation by Binance — the world’s largest cryptocurrency exchange. As part of the deal, Changpeng also resigned as CEO (for according to CNBC he still owns approximately 90% of Binance shares).
Zhao is accused of «willful» failure to implement an effective anti-money laundering program as required by the Bank Secrecy Act, as well as allowing Binance to process transactions involving the proceeds of illegal activities (including between Americans and sanctioned individuals). The US ordered Binance to pay $4.3 billion in fines and forfeitures.
The US Securities and Exchange Commission and the Commodity Futures Trading Commission separately sued Binance due to allegations of mishandling client assets and operating an illegal unregistered exchange in the United States.
A Binance spokesperson said in a statement to CNBC that the crypto exchange has made «significant compliance improvements», including anti-money laundering detection and «hiring key compliance personnel».
To recap, earlier up to 25 years in prison convicted the founder of the FTX crypto exchange, Sam Bankman-Fried, who was accused of fraud and misuse of customer funds