US prosecutors want Changpeng Zhao, the founder and former chief executive of Binance, the world’s largest cryptocurrency exchange, to be jailed for three years after pleading guilty to violating laws against money laundering.
Prosecutors made the request in a motion filed Tuesday night in Seattle federal court.
He said sentencing Zhao to double the maximum of 18 months recommended under federal guidelines would reflect the enormity of his deliberate violations, and would 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.
Once the most powerful man in the crypto industry, Zhao, 47, stepped down as head of Binance last November after he and the exchange admitted evading anti-money laundering requirements under the Bank Secrecy Act.
Binance agreed to a criminal fine of $4.32 billion.
Prosecutors said Binance, adopting a “Wild West” model that welcomes 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 supported the sale of child sexual abuse material and was the recipient of a large portion of the ransomware proceeds.
“They made a business decision that violating U.S. law was the best way to attract users, build their company, and line their pockets,” prosecutors said.
In asking for leniency, Zhao’s lawyers cited his “fearless” admission of responsibility as a first-time offender, his $50 million criminal fine and that no defendant in a remotely similar case has been imprisoned. Has gone.
He also said Zhao had made Binance a leader in the industry in terms of compliance, “despite the early failures that led to this lawsuit.” Zhao founded Binance in 2017.
He has been free on $175 million bond, and has agreed not to appeal any sentence under federal guidelines.
Binance’s penalty includes 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, US District Court, Western District of Washington, number 23-cr-00179.
© Thomson Reuters 2024
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