Binance Founder Changpeng Zhao (CZ) Begins Prison Sentence, Crypto Community Supports CZ

Changpeng Zhao (CZ), the former CEO of crypto asset exchange Binance, has started a four-month prison term in low-security federal prisons in Lompoc, California. The sentence comes after his guilty confession of financial crimes requiring Binance to pay a large fine of US$4.3 billion (approximately IDR 69.7 trillion).

CZ legal issues have been going on for years, with investigations led by the US Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) over violations of anti-money laundering (AML) regulations. The case hit a critical point in November 2023 when CZ admitted to failing to implement an effective AML program in Binance, which violates the Bank Secretariat Act (BSA).

After his guilty confession, CZ was released on bail until the end of May. Although a federal prosecutor initially wanted a three-year sentence, he finally received a four-month sentence, which was lighter than a sentencing guide that recommended 12 to 18 months.

As CoinSpeaker information suggests, in addition to imprisonment, CZ is also subject to a personal fine of 50 million US Dollars (approximately IDR 810 billion). On the other hand, Binance faces a larger fine, paying 4.3 billion US Dollars (approximately IDR 69.7 trillion). Binance also admitted that they failed to register as a money forwarding business and violated the International Emergency Economic Power Act (IEEPA).

CZ also stepped down as CEO of Binance in November. However, it was reported that he still owns 90% of his stake in Binance, making him the richest inmate in US history with an estimated wealth of 37 billion US Dollars (around Rp599 trillion).

The crypto community has broadly shown support for CZ, assessing its decision to serve prison terms as a protection measure for its crypto exchanges. Many see the acceptance of its responsibility as a step towards greater accountability and transparency in the crypto sector.

CZ prison sentences are unlikely to mark the end of his influence in the crypto world. He has revealed plans to focus on global online education for children through the Giggle Academy, a project he mentioned in March while awaiting punishment.