Topline
Federal prosecutors said Binance founder Changpeng Zhao should be sentenced to three years in prison, according to a court filing Tuesday, after he pleaded guilty last year to violating federal money laundering laws.
FILE PHOTO: Former Binance CEO Changpeng Zhao will be sentenced on April 30.
Key Facts
In a filing with the U.S. federal court in Seattle, the Department of Justice said a 36-month sentence would “hold Zhao accountable for his intentional criminal conduct” and would “not just send a message to Zhao but also to the world.”
Under federal guidelines, the crypto billionaire should receive a maximum prison sentence of up to 18 months, however, prosecutors argued this “would not adequately reflect the seriousness of Zhao’s offense…or offer adequate specific or general deterrence.”
Citing Zhao’s internal comments about Binance not being “as big” if it complied with U.S. laws, the prosecutors argue he acted willfully and made a “business decision” that breaking the law was “the best way to attract users, build his company, and line his pockets.”
Along with their requested three-year sentence, DOJ lawyers said Zhao should also be expected to pay the $50 million fine he agreed to as part of a plea deal.
Big Number
Over 100,000. That’s the number of “suspicious transactions” processed by Binance that the company failed to report, according to the DOJ. The crypto exchange also allowed “nearly $900 million in transactions between its U.S. users and users in Iran,” the filing added.
Crucial Quote
“If Zhao’s sentence is to have any meaningful deterrent effect on similarly situated executives of large financial institutions that operate in the United States while flouting U.S. law in the name of profits, Zhao must face meaningful prison time,” the filing added.
Key Background
Last November, Binance pled guilty to violating anti-money laundering, unlicensed money transmitting, and sanctions violations laws. As part of a plea deal, Zhao agreed to step down as Binance’s CEO and the company, which is the world’s largest crypto exchange, and to pay a $4 billion settlement. Zhao, who is a citizen of the UAE and Canada, was released on a $175 million bond but has been ordered to stay in the U.S.
What To Watch For
Zhao will be sentenced on April 30.
Further Reading
Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With US (Forbes)
Ex-Binance Chief CZ Must Stay In U.S. After Guilty Plea—For Now (Forbes)
Judge Approves Binance’s $4.3 Billion Settlement For Anti-Money Laundering, Sanctions Violations (Forbes)
