Key Takeaways
- Prosecutors argued that “an above-guidelines sentence of 36 months is warranted” due to the “magnitude” of Zhao’s actions.
- The latest filing also proposes a $50 million fine for Zhao
Changpeng Zhao, the founder of Binance, could be looking at a harsher sentence than initially expected.
In the latest court filing, US prosecutors have stated that CZ should serve 36 months in prison after pleading guilty to violating laws against money laundering back in November 2023.
Prosecutors argued that “an above-guidelines sentence of 36 months is warranted” due to the “magnitude” of Zhao’s actions. The filing also proposes a $50 million fine for Zhao, on top of his agreement to sever ties with Binance.
“That sentence, together with the agreed $50 million fine, is sufficient but not greater than necessary to balance the relevant 18 U.S.C. § 3553(a) factors and achieve the goals of sentencing,” the filing added.
The crux of the case revolves around Binance’s failure to report suspicious transactions. Authorities allege the exchange neglected to report over 100,000 such transactions, some involving groups designated as terrorist organizations by the US, including Hamas, al Qaeda, and ISIS. Additionally, Binance allegedly failed to report transactions linked to child sexual abuse material and was a major recipient of ransomware proceeds.
While Zhao agreed not to contest a maximum sentence of 18 months, prosecutors are aiming for a harsher punishment. He is currently free on a $175 million bond awaiting sentencing scheduled for April 30th, 2024, in Seattle.
In November 2023, Binance chief Changpeng Zhao pleaded guilty to criminal charges and stepped down as the company’s CEO as part of a $4.3 billion settlement with the United States Department of Justice.
CZ and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program. The DOJ has alleged that CZ and others willfully violated U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law”
The latest development comes a week after Binance secured a full crypto license in Dubai, following an agreement by CZ to relinquish voting control in the local entity.
