The founder and former chief executive of Binance, Changpeng Zhao, is facing a three-year prison sentence as sought by US prosecutors after admitting to violating money laundering laws. The prosecutors pushed for a 36-month jail term for Zhao in a filing made on Tuesday night in Seattle federal court. The sentencing is expected to take place on April 30 before US District Judge Richard Jones.
Zhao, also known as CZ, stepped down from his role at Binance last November after he and the exchange confessed to not adhering to anti-money laundering regulations under the Bank Secrecy Act. As part of the settlement, Binance agreed to a hefty criminal penalty of $4.32 billion.
The prosecutors accused Binance of employing a “Wild West” approach that facilitated illicit activities, pointing out that the exchange failed to report more than 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and ISIS. The platform was also said to have supported the distribution of child sexual abuse content and received a large portion of ransomware proceeds.
Zhao’s lawyers have requested probation, emphasizing his acknowledgment of responsibility and the $50 million criminal fine paid by Zhao. They mentioned that Zhao ensured Binance became a leader in industry compliance despite initial lapses that led to the legal proceedings.
The $4.32 billion penalty imposed on Binance includes a $1.81 billion criminal fine and $2.51 billion allocated for restitution. Additionally, Zhao paid $50 million to the U.S. Commodity Futures Trading Commission, as per his legal team.
This case, filed as U.S. v. Zhao in the U.S. District Court, Western District of Washington, No. 23-cr-00179, highlights the severe consequences for regulatory non-compliance in the cryptocurrency industry.
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