The CZ binance founder is accused by the SEC of mishandling money from Binance customers. However, Binance says that’s not true.
Lawyer Aaron Lane claims that CZ, the creator of Binance, received a sentence of four months in prison for money laundering. The judge took this action to criticize the cryptocurrency sector. Its purpose is to force everyone to abide by the rules.
“General deterrence appears to be the main rationale behind the term of imprisonment,” senior legal educator Aaron Lane of Melbourne’s RMIT Blockchain Innovation Hub spoke with Cointelegraph.
“The judge has sent a message, not to CZ individually but to the entire industry, that anti-money laundering compliance must be taken seriously.”
Lane stated that it was appropriate for the US to prosecute Zhao. On April 30, Zhao confessed that he did not have a good anti-money laundering program.
Despite the seriousness of Zhao’s charges, Lane clarified that they had less to do with fraud and more to do with upholding the law. He further emphasized that Sam Bankman-Fried received a sentence to a far longer prison term for fraud, whereas the allegations he faced were different.
Zhao received a sentence of four months, which was less than what was expected for his offense. Prosecutors demanded three years, but the guidelines recommended eighteen months. Lane stated that the judge believed three years to be harsh.
Even in the case of a plea agreement, Lane noted that courts have the authority to sentence someone to more than 18 months in prison. Zhao agreed to this. They are quite powerful in determining what is right.
“CZ pleaded guilty, accepted responsibility, and had already paid a high price in resigning as CEO and accepting a $50 million fine.”
According to David Chung of Creo Legal, Zhao’s imprisonment sends a strong message. It lets everyone in the cryptocurrency world know that they can no longer do as they want.
But Chung pointed out that Zhao only pleaded guilty to charges of noncompliance with anti-money laundering regulations, not laundering money or any other crime.”
“A prison sentence may be going too far, and a substantial fine and CZ’s resignation may be more appropriate, which is what Binance has already agreed to.”
CZ Binance Founder: Embracing Accountability
Following his punishment hearing, Zhao thanked his fans on X. He emphasized the importance of abiding by the law and declared. He declared that he would spend his sentence in prison.
He penned:
“I will do my time, conclude this phase, and focus on the next chapter of my life (education),”
Zhao said in March that he would launch a blockchain and cryptocurrency education program.
“Our industry has entered a new phase,” Zhao continued. “Compliance is super important.”
The former CEO of Binance highlighted positive factors in the scenario. He claimed that, despite intense surveillance of the exchange, user funds on Binance were secure.
The Securities and Exchange Commission (SEC) of the United States is suing Zhao and Binance. The SEC claims Zhao mishandled consumer funds from Binance. Binance says that this accusation is not true.
