Binance is a company that offers crypto exchanges and other allied services around the world. However, it suffered badly when crypto markets collapsed and some regulators started questioning the very legality of the business entity. This was when Changpeng Zhao was heading the company.
In 2021, the Binance industry was experiencing a surge because of a range of complex products and celebrity endorsements. The surge lasted for a short span and ended in November 2022. The main competitor of Binance was FTX at that time and it collapsed. This led to gross erosion of public confidence and investors started extracting their money out of crypto.
On Tuesday 1st May 2024, the founder of cryptocurrency firm Binance Changpeng Zhao got four months imprisonment. He was found guilty of money laundering charges in the most notorious crypto case since Sam Bankman Fried was imprisoned. He intentionally overlooked transactions that supported child sex abuse, terrorism financing, and illegal drug trade.
Binance grossly violated US federal laws by allowing more than 1.5 million virtual currency trades. Some violations include offering tacit financial help to al-Qaeda, Iran, and Hamas’s Qassam Brigades. Prosecutors further argued that other than Zhao, no one had violated the act to the extent he did willfully. Their allegation against Zhao was that Binance knowingly ignored the anti-money laundering protocols However, the company chose to obfuscate customer’s true identities and locations in the US to avoid compliance with the law.
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The Justice Department lawyers while listening to the sentencing memorandum stated that Changpeng Zhao made business decisions to attract users that violated US federal laws. The prosecutors of the case had asked the judge to impose stricter punishments of up to three years behind bars for this crime. This, in their opinion, will deter other potential misusers of crypto platforms. The court did not entertain the plea, thereby, giving relief to 47-year-old Zhao. Subsequently, he was sentenced to only four months in prison.
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