Mr. Changpeng Zhao began serving his 4-month prison sentence

According to CNBC, Binance's billionaire founder Changpeng Zhao was escorted to a low-security federal prison in Lompoc, California (USA).

Changpeng Zhao (CZ)'s Latham & Watkins defense team confirmed to CNBC the prison where the former Binance CEO is being held.

CZ was sentenced to 4 months in prison in April 2024 after pleading guilty to negligence in management, allowing money laundering activities to occur at the cryptocurrency exchange he founded.

The sentence for the former Binance executive was significantly less than the three years previously requested by federal prosecutors. This number is also lower than the 18 months in the agreement with the US Department of Justice. CZ's defense attorney requested 5 months of probation.

Mr. Changpeng Zhao declared in court when he was sentenced: "I'm sorry."

“I believe that the first step to accepting responsibility is to be fully aware of your mistakes. Here I failed to implement an adequate anti-money laundering program. … Now I realize the severity of that mistake,” the former Binance CEO said in court.

As reported on November 22, 2023, Binance has reached an agreement to end a "long" investigation by the US Department of Justice and the US Futures Trading Commission (CFTC) targeting this platform. Accordingly, the exchange accepted to pay a huge fine of 4.3 billion USD. Mr. Zhao paid a fine of 50 million USD to US officials and agreed not to hold a management position at Binance for 3 years.

Although he no longer runs the company, he is said to own about 90% of the shares in Binance. According to Forbes, CZ is still the richest billionaire in the cryptocurrency industry in 2024, ranked 50th globally with a net worth of 33 billion USD. He is also cherishing a new project called Giggle Academy.

Meanwhile, Sam Bankman-Fried, founder and former CEO of FTX, is also serving a sentence in federal prison in the United States. In March 2024, he was sentenced to 25 years in prison on seven counts of conspiracy to commit securities fraud, leading to the collapse of FTX and sister company Alameda Research.

On April 30, the sentencing trial of former Binance CEO Changpeng Zhao took place with the result that CZ received a 4-month prison sentence for negligence in preventing money laundering.

CZ's sentence was somewhat harsher than what his lawyers had suggested (they expected house arrest), but lighter than both the official recommendation (about one year) and the request of prosecutors of the United States Department of Justice (36 months).

CoinDesk has compiled the factors that helped CZ receive leniency from Judge Richard Jones, despite strict requests from the Department of Justice prosecutor.

The first notable point that caused CZ to be "lightly tried" is that he did not fight extradition, but proactively went to the United States for trial.

In addition, during the two-hour trial, Changpeng “CZ” Zhao continuously expressed remorse for his role in violations of the law at Binance. When the court announced the sentence, CZ always leaned forward and nodded slightly every time the judge pointed out his mistakes, showing his concentration and willingness to accept responsibility, instead of leaning back in his chair and expressing his came out dissatisfied.

Zhao's testimony during the trial emphasized his regret for his actions and his willingness to take responsibility for the mistakes he made while running Binance.

Besides, both defense attorneys and prosecutors recognized that he was not a common-sense criminal defendant. On the contrary, he is known as a philanthropist, always doing good things and this is the first time he has broken the law.

In a letter sent to judge Richard Jones, Zhao admitted: “There is no reason that can justify my failure to establish the necessary compliance controls at Binance.”

In addition to the letter from the former Binance CEO, there are 161 other letters from family, friends and others supporting CZ asking for leniency from the law

Judge Richard Jones told CZ before sentencing:

“I have never seen such a large number of letters of support, all consistent in portraying a defendant who, although guilty, was full of passion and enthusiasm.

Honestly, everything I know about your past and personality can be considered extenuating circumstances.”

CZ also expressed his gratitude to everyone who has cared about and supported him recently on the X platform (Twitter), and affirmed that he accepted to be fined. Mr. Zhao said he will continue to be a cryptocurrency investor, while promoting compliance with the law. He also did not forget to emphasize that no Binance users were affected by the above legal scandals and their assets are still safe.

The court's ruling shows two completely opposite extremes between Mr. Changpeng Zhao and Sam Bankman-Fried, who was sentenced to 25 years in prison in March 2024 for responsibility in the collapse of FTX but never once apologized in court for what had been done.

In addition to serving a prison sentence, Zhao also had to pay a fine of $50 million. It is worth mentioning that not only did CZ comply with the US government's request, but Binance accepted to pay a huge fine of up to 4.3 billion USD.

Although he no longer holds a position at Binance, CZ is still the richest person in cryptocurrency in 2024, and ranks 50th on Forbes' global rankings. He is currently developing a new project called Giggle Academy.