Binance's former CEO sentenced to four months in prison

SEATTLE (Reuters) -- Changpeng Zhao, the former chief executive of Binance, was sentenced on Tuesday to four months in prison after pleading guilty to violating U.S. money-laundering laws at the world's largest cryptocurrency exchange.

The sentence was imposed by U.S. District Judge Richard Jones in Seattle, who rejected prosecutors' request that the 47-year-old Zhao serve a three-year term, twice the maximum recommended under federal guidelines.

Once considered the most powerful person in the crypto industry, Zhao, known as "CZ," is be the second major crypto boss to be sentenced to prison. In March, Sam Bankman-Fried received 25 years behind bars for stealing $8 billion from customers of his now-bankrupt FTX exchange.

Bankman-Fried is appealing his conviction and sentence.

Before handing down the sentence, Jones faulted Zhao for putting growth and profits before complying with U.S. laws.

"You had the wherewithal, the finance capabilities and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity," he said.

Wearing a navy-blue suit and tie, Zhao did not react to sentencing.

Prosecutors said Binance employed a "Wild West" model that welcomed criminals and did not report more than 100,000 suspicious transactions with designated terrorist groups including Hamas, al-Qaeda and Islamic State.

They also said Zhao's exchange supported the sale of child sexual abuse materials and received a large portion of ransomware proceeds. Binance agreed to a $4.32 billion penalty.

"I'm sorry," Zhao told the judge before the sentencing.

"I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money-laundering