Founder of Binance Faces Three Years in Prison for Money Laundering Charges
Embattled Binance Founder Faces 3 Years in Prison Over Money Laundering Charges
The founder of the world’s largest cryptocurrency exchange, Binance, Mr Changpeng Zhao, popularly known as CZ, is facing a possible three-year prison sentence for money laundering charges. The tech tycoon is set to be sentenced on Tuesday after pleading guilty to the charges last year, with US prosecutors pushing for the maximum sentence.
Mr Zhao stepped down as the chief executive of Binance in November following his admission of violating US anti-money laundering laws. The prosecutors are seeking a 36-month sentence, double the maximum recommended under federal guidelines, to reflect the seriousness of his offenses and send a strong message.
According to court filings, Binance, under Mr Zhao’s leadership, operated on a “wild west” model, failing to report over 100,000 suspicious transactions due to poor internal controls. Some of these transactions were linked to designated terrorist groups like Hamas, al-Qaida, and ISIS.
The prosecutors stated, “Zhao’s willful violation of US law was no accident or oversight. He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets.” As part of the settlement, Binance agreed to pay a hefty financial penalty of $4.3 billion, while Mr Zhao was fined $50 million.
In Nigeria, Binance is also under scrutiny, with the Economic and Financial Crimes Commission (EFCC) accusing Binance executives of laundering $35.4 million. Mr Tigran Gambaryan, in charge of financial crime compliance, and Mr Nadeem Anjarwalla, Binance’s Africa Regional Manager, were detained in February after arriving in Nigeria for meetings.
Following the accusations, Binance was ordered to pay a fine of $10 billion by the Nigerian government for alleged currency speculation and fixing exchange rates, which contributed to the depreciation of the Naira.
The case has drawn significant attention globally, highlighting the challenges faced by cryptocurrency exchanges in complying with regulations and combating financial crimes. Stay tuned for updates on this developing story.
