US calls for 3 years in prison for Binance founder Changpeng Zhao

US prosecutors want it Changpeng Zhaofounder and former CEO of Binancethe largest in the world cryptocurrency exchangeto serve three years in prison after pleading guilty to violating anti-money laundering laws.

Prosecutors filed the request Tuesday evening in federal court in Seattle.

They said sentencing Zhao to double the maximum 18 months recommended by federal guidelines would reflect the extent of his willful violations and send a message that “the right choice, every time, is to follow the law.”

Zhao’s lawyers requested probation. U.S. District Judge Richard Jones is expected to sentence Zhao on April 30.

Zhao, 47, once the most powerful figure in the cryptocurrency industry, resigned as head of Binance last November when he and the exchange admitted they had evaded anti-money laundering requirements under the Bank Secrecy Act.

Binance accepted a criminal fine of $4.32 billion.

Prosecutors said Binance, using a “Wild West” model that harbored criminals, failed to report more than 100,000 suspicious transactions with designated terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, or ISIS.

They also said that Zhao’s platform also supports the sale of child pornography and receives a large portion of the ransomware proceeds.

“He made the business decision that violating U.S. law was the best way to attract users, build his company and line his pockets,” prosecutors said.

In asking for leniency, Zhao’s lawyers cited the first offender’s “steadfast” acceptance of responsibility, his $50 million criminal fine and the fact that no defendant in a remotely similar case has been jailed.

They also said that Zhao has made Binance an industry leader in compliance, “despite the initial failures that led to this prosecution.” Zhao founded Binance in 2017.

He has been free on $175 million bail and agreed not to appeal any sentences under federal guidelines.

Binance’s fine included a criminal fine of $1.81 billion and restitution of $2.51 billion. Zhao also paid $50 million to the U.S. Commodity Futures Trading Commission, his lawyers said.

The case is US v. Zhao, United States District Court, Western District of Washington, No. 23-cr-00179.

© Thomson Reuters 2024

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