- Changpeng Zhao, the founder of Binance also known as CZ, faces potential three-year prison term for violating money laundering laws.
- US prosecutors accuse Binance of operating with a “Wild West” mentality, facilitating criminal activities.
US prosecutors want Changpeng Zhao, the founder and former chief executive of Binance, to serve three years in prison.
US prosecutors charge Zhao with serious crimes
Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange, could face three years in prison after pleading guilty to violating money laundering laws. US prosecutors are pushing for this sentence, arguing that it would reflect the seriousness of Zhao’s offences.
In a filing to a Seattle federal court on Tuesday night, prosecutors stated that sentencing Zhao to twice the maximum 18 months recommended under federal guidelines would underscore the gravity of his deliberate violations. They accused Binance of operating with a “Wild West” mentality, welcoming criminals and failing to report over 100,000 suspicious transactions involving designated terrorist groups like Hamas, al Qaeda, and ISIS. Additionally, prosecutors alleged that Zhao’s platform facilitated the sale of child sexual abuse materials and received a significant portion of ransomware proceeds.
He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” prosecutors said.
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Zhao faces huge fines
Zhao, who stepped down as Binance’s chief last November, has already agreed to a $4.32 billion criminal penalty. His lawyers are seeking probation, citing his acceptance of responsibility, a $50 million criminal fine, and his efforts to improve Binance’s compliance standards.
Despite the challenges faced by Binance, the cryptocurrency industry continues to grow rapidly. However, cases like Zhao’s highlight the need for robust compliance measures within the sector. As regulators tighten their grip on cryptocurrency exchanges, industry players will need to adapt to ensure their long-term viability and credibility. US District Judge Richard Jones is expected to sentence Zhao on April 30.
