It’s unusual for chief executive officers to be held criminally responsible for financial misconduct at their firms.

Equally eye-opening is the significant discrepancy in sentences handed down recently against the leaders at a pair of cryptocurrency exchanges.

The founder of Binance, Changpeng Zhao, was sentenced to four months in prison last month after pleading guilty to one count of conspiring to violate the Bank Secrecy Act. Compare that to the outcome for the founder of FTX, Sam Bankman-Fried, who was sentenced to 25 years in prison in March for misappropriating billions of dollars and defrauding investors.

Why the wild disparity in their sentences? Of course, it has a lot to do with the differing nature of their cases—Bankman-Fried was found guilty by a jury on seven criminal counts, while Zhao pleaded guilty to only one.

Both cases also held significant monetary ramifications: Binance agreed to pay $4.3 billion across resolutions with several agencies, including the DOJ, while Zhao personally paid $150 million. Bankman-Fried agreed to forfeit $11 billion as part of his punishment.

I argue the performance of the compliance teams at the two firms was as big a contrast as the penalties earned by their respective founders. Competent compliance is the biggest reason why Binance continues to operate, while FTX was forced to enter bankruptcy proceedings in November 2022 and will never reopen.

Don’t believe me?

Binance, for all its shortcomings related to its anti-money laundering (AML) program, was consistently able to show customers, regulators, and investors where its assets were stored. The exchange was never publicly accused of misplacing or misappropriating funds. Its biggest issue was that its purposefully ineffective AML program allowed criminals and terrorist groups to access its platform.

FTX, by contrast, had a difficult time telling anyone where its assets were stored once Bankman-Fried was removed by the bankruptcy court. The company’s internal control system was so lacking that investigators believed billions of dollars had gone missing. Much of the money would eventually be found, but the seeds of distrust had already been sown.

The fates of Zhao and Bankman-Fried also reflect the markedly different ways in which each company interacted with regulators and law enforcement, providing potential lessons for compliance teams whose companies come under similar scrutiny.

DOJ officials have said repeatedly they will consider reducing penalties against companies that self-report violations, cooperate with investigators, and remediate deficiencies.

In the cases of Binance and FTX, neither firm self-disclosed their violations.

Binance’s AML deficiencies were revealed during an investigation by the DOJ that was prompted, in part, by the company’s refusal to register as a money services business with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) or as a digital assets derivative exchange with the Commodity Futures Trading Commission (CFTC). Binance’s refusal to acknowledge the demands of U.S. regulators led to it being investigated, a probe that would ensnare Zhao as well.

FTX became the subject of a DOJ investigation following its bankruptcy brought on by the cryptocurrency version of a bank run, in which the owners of FTX’s digital currency, FTT, all demanded to be paid out at once following damning media reports about the company’s finances. When Bankman-Fried was removed from his position, the veil was pulled back on the extent of the company’s risk management failings.

Second, cooperation with investigators was initially lacking from both organizations. Binance would eventually cooperate. FTX seemingly couldn’t.

Binance told regulators it had no U.S. operations, when it did. The company actively helped its users evade its AML procedures, altered documents, and changed coding to obscure that it continued to service U.S.-based customers. The CFTC would fine Binance Chief Compliance Officer Samuel Lim $1.5 million for his alleged role in these schemes.

At FTX, the problems were more widespread in part because its internal controls were almost non-existent. Some of the platform’s customers—namely Alameda Research, which Bankman-Fried controlled—were allowed to make risky bets using other FTX customers’ money. When the bankruptcy court-appointed CEO, John Ray, attempted to follow the paper trail, he found it completely unreliable.

In the end, FTX’s lack of cooperation was the result of widespread compliance, internal control, and recordkeeping failures.

Lastly, remediation.

Binance received partial credit on its penalty with the DOJ for its cooperation, although it should be noted FinCEN criticized the company for not promptly turning over key evidence. The DOJ praised Binance for providing investigators with the results of its own internal investigation, as well as other useful and timely evidence.

As part of its settlement, Binance entered into a three-year compliance monitorship with the DOJ and a five-year monitorship with FinCEN. It hired experienced compliance personnel and revamped its AML program, the DOJ said.

Bankman-Fried and other FTX executives used the exchange’s lax internal controls to attempt to cover their tracks and obscure the movement of funds between Alameda and FTX, the DOJ said. Ray told a Congressional committee he didn’t trust “a single piece of paper” at the company.

Bloomberg recently reported all FTX customers will receive a full refund for the cryptocurrency held by the exchange. Bankman-Fried consistently claimed the cryptocurrency had not been lost. But the records he left behind were so poor that it took nearly two years for the bankruptcy court to reach that same conclusion.

There’s an old compliance saying along the lines of, “Your job is to save the CEO from going to prison.” Binance did not get off to a good start but finished strong. FTX never left the gate.

It’s as good an explanation as any for why their former leaders were treated so differently.