In a major development, Changpeng "CZ" Zhao, the founder and former CEO of Binance, has been sentenced to four months in federal prison for money laundering violations, according to reports by the Associated Press. The sentencing comes as part of Binance's agreement with the United States Department of Justice, which allows the company to settle its legal troubles and continue operating under new leadership.

The prosecution's court filing quoted an alleged statement by Zhao to Binance employees, saying, "Better to ask for forgiveness than permission." This, along with the deliberate disregard for the company's legal responsibilities, led to Binance processing millions of dollars of unlawful proceeds, prosecutors argued.

While CZ's situation may seem less gloomy compared to other crypto executives, such as FTX founder Sam Bankman Fried who received a 25-year sentence, Binance and Zhao are still expected to grow their fortunes during the prison term. Reports suggest that Binance's assets have seen significant growth during the recent crypto boom.

Although Zhao is no longer the CEO, he still holds a 90% stake in the company, making his estimated net worth $33 billion, according to Forbes. In his absence, the co-founder of Binance, Yi He, has reportedly taken charge of running the crypto exchange.

This legal development comes after a years-long investigation into Binance, culminating in the company's agreement with the United States Department of Justice in November 2023. The agreement acknowledged Binance's historical criminal compliance violations, resulting in the payment of $4.3 billion by the company and a $50 million penalty and resignation as CEO from Zhao.

Binance, founded by Zhao in 2017, swiftly became the world's largest cryptocurrency exchange. However, prosecutors alleged that the lack of safeguards on the platform enabled criminals to transfer millions of dollars.

The clash between U.S. regulators and Binance intensified in recent years. While Zhao maintained that Binance was a global company not subject to U.S. laws, prosecutors argued that Binance specifically targeted the lucrative American customer base while ignoring American laws.

Despite his upcoming prison sentence, Zhao already has plans for future ventures. The New York Times reports that he has been in contact with OpenAI CEO Sam Altman about the startup world. Additionally, Zhao recently tweeted about his next project called Giggle Academy, a K-12 digital education program aimed at providing free education to underprivileged children in developing countries.

Dubbed as the richest person to serve time in a U.S. federal prison, CZ's punishment appears relatively minimal compared to FTX and Sam Bankman Fried. He will pay a financial penalty that is considered a mere slap on the wrist for a multi-billionaire. Once his four-month sentence is completed, Zhao is expected to continue his endeavors in the tech billionaire realm.

Overall, these developments highlight an important chapter in the ongoing battle between regulators and the cryptocurrency industry, underscoring the need for stricter compliance measures to prevent money laundering and unlawful activities within the sector.