Binance Founder Sentenced to Four Months in Prison

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Changpeng Zhao, the founder and former chief executive of the Binance cryptocurrency exchange, had pleaded guilty to a money-laundering violation.

April 30, 2024, 3:01 p.m. ET

Changpeng Zhao, the billionaire founder of the giant cryptocurrency exchange Binance, was sentenced to four months in prison on Tuesday, a much shorter term than prosecutors had demanded after he pleaded guilty to money laundering violations last year.

Prosecutors had asked for three years in prison while Mr. Zhao’s defense lawyers had requested probation without any prison time.

Mr. Zhao’s sentencing was the second high-profile penalty this year in the Justice Department’s campaign to root out criminal behavior in the crypto industry. In March, Sam Bankman-Fried, the founder of the collapsed FTX exchange and Mr. Zhao’s onetime business rival, was sentenced to 25 years in prison for fraud.

Not long ago, Mr. Zhao and Mr. Bankman-Fried stood atop the multitrillion-dollar crypto industry. Binance was the largest crypto company in the world, processing as much as two-thirds of all transactions. But it also faced investigations by several U.S. agencies into whether Mr. Zhao had broken the law to build his empire.

Facing intense legal scrutiny, Mr. Zhao, 47, who goes by the initials CZ, was often dismissive. He described the concerns about Binance as “FUD,” or fear, uncertainty and doubt — shorthand in the crypto world for false rumors intended to hurt a business.

In November 2022, Mr. Zhao’s industry power increased after he helped bring down Mr. Bankman-Fried with a series of social media posts that prompted a run on FTX’s accounts. When FTX didn’t have the money to repay its customers, Mr. Zhao briefly agreed to buy the exchange, before pulling out of the deal. Soon Mr. Bankman-Fried was arrested on fraud charges.

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