- Money laundering charges
U.S. prosecutors have proposed a three-year prison term for Changpeng Zhao, the founder and former CEO of Binance, the largest cryptocurrency exchange globally, after his guilty plea to money laundering violations. The recommendation was filed in a Seattle federal court on Tuesday night, suggesting a sentence that doubles the maximum 18 months typically advised under federal guidelines. This severe recommendation aims to underscore the seriousness of Zhao’s deliberate offenses and to reinforce the importance of lawful compliance.
Zhao’s legal team has countered with a request for probation. His sentencing, scheduled for April 30 by U.S. District Judge Richard Jones, follows his resignation last November from Binance amidst admissions of circumventing anti-money laundering measures required by the Bank Secrecy Act.
The prosecutors accused Binance of operating a “Wild West” model, attracting criminal activities, and failing to report over 100,000 suspicious transactions linked to designated terrorist organizations such as Hamas, al Qaeda, and ISIS. Further allegations include facilitating the sale of child sexual abuse materials and receiving significant ransomware payments.
In their push for a lenient sentence, Zhao’s attorneys highlighted his “unflinching” acceptance of responsibility, his status as a first-time offender, and his significant financial penalties totaling $50 million in criminal fines. They also emphasized Zhao’s efforts to lead Binance towards better compliance standards post-prosecution.
Zhao, who has been out on a $175 million bond, has agreed not to contest any sentence within the federal guidelines. The overall settlement with Binance includes a $1.81 billion criminal fine and $2.51 billion in restitution, plus an additional $50 million paid to the U.S. Commodity Futures Trading Commission by Zhao.
The case, formally known as U.S. v. Zhao, continues in the U.S. District Court for the Western District of Washington under case number 23-cr-00179.
