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Former Binance chief sentenced to jail by US judge

David Burt, the Premier, left, and Zhao Changpeng, then the Binance chief executive, sign a memorandum of understanding in 2018 (Photograph by Akil Simmons)

The former boss of Binance, Zhao Changpeng, who six years ago promised millions of dollars in Bermuda investments, was sentenced on Tuesday to four months in prison after pleading guilty to violating US money-laundering laws at the world's largest cryptocurrency exchange.

The sentence was imposed by US District Judge Richard Jones in Seattle, who rejected a prosecutors’ request that the 47-year-old Zhao serve a three-year term, Reuters has reported.

Zhao came to Bermuda and joined David Burt, the Premier and Minister of Finance, in signing a memorandum of understanding in 2018, which Mr Burt called “a vote of confidence in Bermuda and the leadership of this government”.

But this week, the US judge faulted Zhao for putting growth and profits before complying with US laws.

Reuters reported: “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.”

Zhao apologised before sentencing. He added: “I believe the first step of taking responsibility is to fully recognise the mistakes. Here, I failed to implement an adequate anti-money laundering programme ... I realise now the seriousness of that mistake.”

Zhao’s lawyers had argued for probation, citing his acceptance of responsibility and paying a $50 million criminal fine.

They also said others who admitted to similar wrongdoing, including BitMex founder Arthur Hayes, had stayed out of prison.

Judge Jones said a three-year sentence was inappropriate because prosecutors did not show that Zhao knew in advance about illegal activity.

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