Changpeng Zhao, the billionaire founder of Binance, has started serving his four-month sentence at a low-security federal prison in Lompoc, California.
This follows his April guilty plea to charges related to enabling money laundering through his cryptocurrency exchange.
Federal prosecutors had initially sought a three-year sentence for Zhao, but he received a significantly reduced term.
The defence had advocated for five months of probation, while sentencing guidelines suggested a 12 to 18-month imprisonment.
Before his sentencing, Zhao expressed remorse to U.S. District Judge Richard Jones, acknowledging his failure to implement a robust anti-money laundering program at Binance.
“I’m sorry,” he said, “I recognize the mistakes and the seriousness of my failure.”
The case concluded a lengthy investigation into Binance, resulting in a settlement with the U.S. government in November.
As part of this deal, Zhao stepped down as CEO and agreed to pay a $50 million fine. Binance itself was ordered to pay $4.3 billion in fines and forfeitures.
Despite stepping down, Zhao retains a significant stake in Binance, estimated at 90%.
The allegations against him included the willful failure to implement required anti-money laundering measures and allowing transactions involving illegal proceeds, including those involving sanctioned individuals.
In contrast, FTX’s former CEO, Sam Bankman-Fried, was sentenced to 25 years in prison for his role in a securities fraud conspiracy.
Unlike Zhao, Bankman-Fried did not negotiate a deal with prosecutors, who were aided by the testimony of his former associates.
