Trends
Binance founder Changpeng Zhao should spend 3 years in prison
The Department of Justice (DOJ) requests that Binance founder and former CEO Changpeng Zhao be locked up for 3 years and pay a $50 million fine for violating the Bank Secrecy Act, which he pleaded guilty to in November. The sentence, per the DOJ sentencing memo Monday, “will not just send a message …
Headline
The Department of Justice (DOJ) requests that Binance founder and former CEO Changpeng Zhao be locked up for 3 years and pay a $50 million fine for violating the Bank Secrecy Act, which he pleaded guilty to in November. The sentence, per the DOJ sentencing memo Monday, “will not…
Context
The Department of Justice (DOJ) requests that Binance founder and former CEO Changpeng Zhao be locked up for 3 years and pay a $50 million fine for violating the Bank Secrecy Act, which he pleaded guilty to in November. The sentence, per the DOJ sentencing memo Monday, “will not just send a message to Zhao but also the world that the right choice, every time, is to comply with the law.” Zhao’s plea deal initially called for a sentence of 12 to 18 months in prison. However, the DOJ claims that more time is necessary because of the “massive” extent of Zhao’s misbehaviour.
Evidence
Pending intelligence enrichment.
Analysis
“Binance engaged in transactions orders of magnitude larger than the BSA originally contemplated for ‘money services businesses’ and well beyond what the Guidelines address,” the DOJ wrote. Zhao had previously consented to pay a fine of $50 million. When he left the company in November, his former employer was forced to pay $4.3 billion in fines. He was succeeded as CEO by Richard Teng. Prosecutors claimed that Binance failed to disclose more than 100,000 suspicious transactions with designated terrorist organizations, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria, or ISIS because it operated under a “Wild West” model that welcomed criminal activity. They added that Zhao’s platform received a sizable share of the money made from ransomware and encouraged the sale of materials that glorified child sex abuse.
Key Points
- U.S. prosecutors want Changpeng Zhao, the founder and former chief executive of Binance, the world’s largest cryptocurrency exchange, to serve 3 years in prison and to pay a $50 million fine for violating the Bank Secrecy Act.
- Prosecutors requested in a Tuesday night filing in Seattle federal court.
- The lawyer of Zhao applied for probation.
Actions
Pending intelligence enrichment.
