Former Binance CEO Changpeng "CZ" Zhao has begun his four-month sentence at a federal facility in California, where he will serve time for financial misconduct that resulted in Binance agreeing to pay a massive $4.3 billion fine.

Last November, Zhao admitted to breaking anti-money laundering laws. With an estimated wealth of $37 billion, he has become the wealthiest person ever to serve time in a U.S. prison.

CZ's Imprisonment Starts in California

Changpeng Zhao has officially started his sentence at the Federal Correctional Institution in Lompoc, California. This low-security prison is located northwest of Los Angeles.

At 47 years old, Zhao pleaded guilty to federal money laundering charges, highlighting a culture at Binance that prosecutors claimed ignored fraud prevention to prioritize company growth. As a result, he had to step down from his role at the world’s largest cryptocurrency exchange and pay a $50 million personal fine.

The U.S. Department of Justice recommended a three-year prison sentence for Zhao's serious violations of the Bank Secrecy Act. However, he received a notably lighter sentence of just four months.

Since Zhao flew to Seattle to enter his guilty plea, he has been restricted from leaving the U.S. by Judge Richard Jones, who deemed him a flight risk due to his $37.2 billion net worth.

Though it’s uncertain how much time Zhao will actually spend at the California prison camp, he might receive credit for time already served, potentially reducing his time behind bars to as little as 10 months, followed by supervised release.

Looking Ahead

Zhao’s prison term is likely to be a minor interruption rather than a significant end to his career. After serving his sentence, CZ plans to focus on global online education for children, likely through the Giggle Academy, which he announced in March while awaiting sentencing.

He also intends to keep his existing cryptocurrency investments and remain a passive investor, showing his ongoing faith in the crypto industry. Last month, he noted that while Binance had faced intense scrutiny, customer funds remained secure, emphasizing the importance of regulatory compliance.

Following Zhao’s departure, Binance remains optimistic about its future, stating, "We believe Binance will emerge stronger as we build the foundation for the next 50 years."