2024-04-25
In a filing on Tuesday night in Seattle federal court, U.S. prosecutors have requested a three-year prison sentence for Changpeng Zhao, the founder and former chief executive of Binance, the world's largest cryptocurrency exchange.
This comes after Zhao pleaded guilty to violating money laundering laws.
The prosecutors argue that sentencing Zhao to twice the recommended maximum of 18 months under federal guidelines would reflect the seriousness of his willful violations and send a message about the importance of compliance with the law.
Zhao's lawyers, on the other hand, have requested probation for their client.
The final decision will be made by U.S. District Judge Richard Jones, who is expected to sentence Zhao on April 30.
Once a prominent figure in the crypto industry, Zhao, 47, resigned as Binance's chief in November last year, following admissions of evading anti-money laundering requirements. Binance agreed to pay a $4.32 billion criminal penalty as a result.
Prosecutors have accused Binance of operating a "Wild West" model that welcomed criminals and failed to report over 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and ISIS.
They also stated that Zhao's platform supported the sale of child sexual abuse materials and received a significant portion of ransomware proceeds.
According to the prosecutors, Zhao knowingly violated U.S. law for personal gain, making it the best strategy to attract users, grow his company, and enrich himself.
In their plea for leniency, Zhao's lawyers emphasized his acceptance of responsibility as a first-time offender, the substantial $50 million criminal fine he paid, and the fact that no defendant in a similar case has been imprisoned before.
They also pointed out that despite the initial failures that led to this prosecution, Zhao made Binance an industry leader in compliance. Zhao founded Binance in 2017.
Zhao has been out on a $175 million bond and has agreed not to appeal any sentence that falls within federal guidelines.
Binance's penalty includes a $1.81 billion criminal fine and $2.51 billion in restitution. Additionally, Zhao paid $50 million to the U.S. Commodity Futures Trading Commission.
