US Government Pursues 3 Year Sentence for Ex Binance CEO Zhao

The U.S. Department of Justice (DOJ) prosecutors have recommended that Changpeng Zhao, founder and former CEO of Binance, the world's largest cryptocurrency exchange, serve a 3-year prison term following his plea guilty to violating laws against money laundering.

DOJ attorneys argued for a 36-month prison term alongside a $50 million fine to hold Zhao accountable for his international crime conduct and to serve as an example to others.

Furthermore, the prosecution argues that the ex-Binance CEO reaped vast rewards for his violation of the Bank Secrecy Act, and the sentence should reflect the gravity of his misconduct.

The DOJ added that Zhao failed to implement an effective anti-money laundering (AML) program at Binance, allowing illicit transactions from ransomware attacks, exchange hacks, and various internet-related scams.

A total of over 100,000 suspicious transactions processed by Binance were not reported, and the exchange allowed nearly $900 million in transactions between users in the United States and in Iran.

According to the DOJ, Zhao was aware Binance violated the law and encouraged it, which was the reason for the sentence from the recommended 12 to 18 months under the guidelines to 36 months.

Binance also pleaded guilty to charges of its own and agreed to a $4.3 billion fine.

The sentencing memo filed with the U.S. federal court in Seattle on Tuesday night has caused an uproar in the market. In addition, the case has drawn attention to the need for stringent regulatory compliance in the crypto industry, highlighting the potential consequences of legal oversight failures.

The sentencing date earlier scheduled for February will now be April 30.

In November 2023, Zhao and Binance pleaded guilty to violating U.S. laws, and as part of the plea deal, the founder agreed to step down as Binance’s CEO, and the company would have to pay a $4 billion settlement.

Zhao was released on a $175 million bond but has been ordered to stay in the U.S. following legal proceedings.

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