Changpeng Zhao, Freed From US Prison After Money Laundering Case

Changpeng Zhao, founder and former CEO of Binance, the world's largest cryptocurrency exchange, was released from prison facilities in California (photo: x @DasAbhyudoy)

Changpeng Zhao, founder and former CEO of Binance, the world's largest cryptocurrency exchange, was released from a prison facility in California on Friday 27 September, according to a Bloomberg News report citing a spokesman from the US Prison Bureau. Zhao was previously sentenced to four months in prison after pleading guilty of violating US laws related to preventing money laundering.

This case stems from allegations that Binance, under Zhao's leadership, failed to implement adequate programs to prevent money laundering on its platform. Prosecutors claim that Binance adopted a business model that facilitates criminal activities, including failing to report more than 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al-Qaeda, and Islamic State.

In addition to accusations of supporting terrorist groups, US authorities also revealed that Binance allegedly played a role in supporting the trafficking of child sexual abuse material and received most of the proceeds from ransomware attacks. These allegations put great pressure on Zhao and his company, which for years have been operating with minimal regulations.

As part of the settlement of the sentence, Binance agreed to pay a large fine of US$4.32 billion (Rp65.3 trillion) to US authorities. Zhao, personally, also paid a criminal fine of US$50 million (Rp756.2 billion) and an additional US$50 million to the US Commodity Futures Trading Commission (CFTC). This settlement is one of the largest in the history of the cryptocurrency industry.

After Zhao's release, the world of finance's attention is now focused on how Binance will continue its operations in the midst of international highlights. While Zhao resigned as CEO after the court's decision, Binance is trying to change its business model to comply with strict regulations implemented in various countries.

Some observers have stated that this legal case could be a turning point in global cryptocurrency regulations, where authorities around the world are increasingly tightening surveillance of digital exchange activity to ensure there are no legal loopholes that could be exploited for illegal activities.

Stronger Law Enforcement

The case of Zhao and Binance is a warning to other financial technology companies, especially in the cryptocurrency sector, about the importance of compliance with international regulations, especially in terms of anti-money laundering and preventing terrorism financing. This legal decision shows that US authorities will not hesitate to take firm action against regulatory violations, despite involving global companies that have a major influence.

After Zhao is now free from prison, it remains unclear whether he will return to active roles in the cryptocurrency world or choose a calmer path after completing his sentence. Meanwhile, Binance's future and its impact on the global crypto industry will continue to be closely monitored by regulators and investors around the world.