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Former Binance CEO CZ Begins 4-Month Prison Sentence in California
Lompoc II, the California prison where CZ will serve his sentence, is a low-security facility.
Updated Jun 4, 2024, 8:28 p.m. Published Jun 3, 2024, 5:33 p.m.
Binance founder Changpeng “CZ” Zhao has reported to a federal prison in California where he will spend the next four months for failing to implement an adequate know-your-customer (KYC) program at the world's largest cryptocurrency exchange.
Zhao, a Canadian national, pleaded guilty to violating the Bank Secrecy Act (BSA) in November. In April, a federal judge sentenced CZ to four months in prison – a much shorter sentence than the three years federal prosecutors requested, but more than other crypto executives like former BitMex CEO Arthur Hayes received for the same crime.
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At a net worth of $36.5 billion, according to the Bloomberg Billionaires Index, Zhao is believed to be the richest person to ever go to prison in the U.S.
In addition to his sentence, Zhao was also fined $50 million and agreed to step down as Binance’s CEO. Binance, which pleaded guilty to money laundering and sanctions violations at the same time as Zhao, settled the charges earlier this year with $4.3 billion in fines to various federal regulators and the appointment of an independent compliance monitor.
Lompac II, where Zhao will serve his short sentence as inmate 88087-510, is a low-security prison in Santa Barbara County, on California’s central coast. According to the Bureau of Prisons’ records, there are currently 2,160 inmates at the facility.
The conditions at the prison – where some inmates work on an adjacent farm, growing produce and working with cows and horses – are in stark contrast to the notoriously dangerous facility where former FTX CEO Sam Bankman-Fried, who got a 25-year prison sentence earlier this year, is currently being held in New York.
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The ruling transfers cash, gold bars, watches, and jewelry seized from a CIBC safety deposit box and bank account into government hands after Patryn did not defend the case.
What to know:
- The Supreme Court of British Columbia has forfeited $1 million in cash and gold tied to QuadrigaCX's co-founder, Michael Patryn, to the government.
- Patryn did not contest the forfeiture, which involved 45 gold bars, luxury watches, and over $250,000 in cash seized under an Unexplained Wealth Order.
- The forfeiture may lead to a process determining if any assets can be directed to QuadrigaCX's creditors, who received 13 cents on the dollar in the bankruptcy settlement.
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