Washington:
The founder of cryptocurrency company Binance was sentenced to four months in prison in the US on Tuesday after pleading guilty to money laundering, in the most high-profile crypto case since Sam Bankman-Fried was jailed.
Changpeng Zhao, a Canadian, resigned late last year as part of a deal with US authorities.
According to investigations by two Treasury departments, Binance has failed to prevent transactions from movements such as the Islamic State group, Al-Qaeda or the armed wing of Hamas.
Zhao pleaded guilty to violating U.S. anti-money laundering laws and Binance agreed in February to pay $4.3 billion to settle the charges.
Prosecutors had asked the judge to impose a three-year prison sentence for a crime that typically results in probation, according to a court filing.
“He made a business decision that violating U.S. law was the best way to attract users, build his business and line his pockets,” Justice Department lawyers said of Zhao in a sentencing memorandum.
“The punishment in this case will send a message not only to Zhao, but also to the world.”
Lawyers for Zhao countered in a filing that being punished with probation is just, appropriate and consistent with legal precedent.
They cited Zhao's acceptance of responsibility along with what they called his philanthropic record.
“I made mistakes and I must take responsibility,” Zhao, who lives in the United Arab Emirates, said in a post on X, formerly Twitter, in November.
He has been living in the United States ever since.
Binance was founded in 2017 and captured a large share of the crypto trading market, turning founder and CEO Zhao into a billionaire.
While Binance was founded in China, Zhao moved its operations to other international locations following Beijing's crackdown on the crypto sector.
Binance operates crypto exchanges and provides other services around the world, but suffered a major blow when crypto markets collapsed and regulators began investigating the legality of their activities.
The volatile sector boomed in 2021, with a range of complex products and celebrity endorsements propelling the sector to a valuation of more than $3 trillion in 2022.
But a series of scandals, including the collapse of Binance's main rival exchange, FTX, in November 2022, and criminal charges against several industry executives, caused public confidence to evaporate and investors to pull their money out of crypto.
FTX founder Bankman-Fried was sentenced to 25 years in prison in March.
The crypto industry has rebounded in recent months, thanks in large part to U.S. regulators greenlighting bitcoin exchange traded funds (ETFs), which allow investors to trade assets without actually opening a crypto account.
Binance's new CEO, Richard Teng, told AFP this month that the company had spent hundreds of millions of dollars on compliance and was working very closely with regulators.
(Except for the headline, this story has not been edited by Our staff and is published from a syndicated feed.)