U.S. Prosecutors Seek 36-Month Prison Sentence for Former Binance CEO Changpeng Zhao for Money Laundering Activities
U.S. Prosecutors Push for 36-Month Prison Sentence for Former Binance CEO Changpeng Zhao
In a bold move highlighting the seriousness of financial crimes, U.S. prosecutors have recommended a 36-month prison sentence for Changpeng Zhao, the former CEO of cryptocurrency giant Binance, for his involvement in money laundering activities.
The prosecutors are pushing for the maximum penalty, citing Zhao’s deliberate non-compliance with regulations and Binance’s breaches of regulatory requirements. According to a report by CNBC, the memorandum filed with the court for the western district of Washington argues that Zhao should face a longer sentence than the advisory standards suggest to “reflect the gravity of his crimes.”
While advisory recommendations typically range from 12 to 18 months in prison, the prosecutors believe that a 36-month custodial sentence would be more appropriate in this case. They argue that such a sentence would demonstrate the seriousness of the offense, promote respect for the law, deter future criminal behavior, and achieve the goals of sentencing without being excessive.
Zhao is accused of willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act, allowing Binance to process transactions involving the proceeds of illegal activities, including transactions between Americans and individuals in sanctioned jurisdictions.
Binance, the cryptocurrency exchange founded by Zhao, is facing separate legal challenges in the United States. The Securities and Exchange Commission and the Commodity Futures Trading Commission are investigating allegations of mishandling customer assets and operating an unlawful, unregistered exchange in the country.
In addition to the charges against Binance, the United States has accused Zhao and the company of violating the U.S. Bank Secrecy Act and Iran sanctions. Binance has been ordered to pay $4.3 billion in fines and forfeiture, while Zhao has agreed to a $50 million fine.
Following these legal developments, Zhao resigned as CEO of Binance last November and was replaced by Richard Teng, the former chief of the Abu Dhabi markets regulator. Zhao and Binance have yet to respond to the latest developments and requests for comment from CNBC.
Prosecutors describe Zhao’s actions as a blatant defiance of U.S. laws, operating Binance in a “Wild West” manner under his leadership. They claim that Zhao knowingly disregarded the company’s legal responsibilities and bet that he would not face serious consequences for his actions.
Zhao’s official sentencing is scheduled for April 30, where the court will determine the price he must pay for his crimes. The case underscores the growing scrutiny and enforcement of regulations in the cryptocurrency industry, signaling a shift towards greater accountability and compliance with financial laws.
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