U.S. prosecutors seek three-year prison term for Binance founder Zhao for money laundering

The founder and former chief executive of Binance, the world’s largest cryptocurrency exchange, Changpeng Zhao, is facing a potential three-year prison sentence after pleading guilty to violating laws against money laundering. U.S. prosecutors are pushing for this harsh sentence, arguing that it would reflect the seriousness of his willful violations and send a strong message about the importance of compliance with the law.

In a filing in Seattle federal court on Tuesday night, prosecutors highlighted the magnitude of Zhao’s offenses, including the evasion of anti-money laundering requirements under the Bank Secrecy Act. Binance, under Zhao’s leadership, failed to report over 100,000 suspicious transactions involving designated terrorist groups and supported the sale of illegal materials, such as child sexual abuse materials and ransomware proceeds.

Despite stepping down as Binance’s chief last November and admitting to these violations, Zhao’s legal team is requesting probation for their client. They emphasized Zhao’s acceptance of responsibility, his substantial criminal fine of $50 million, and his efforts to improve compliance at Binance following the initial failures that led to the prosecution.

Zhao, once a powerful figure in the crypto industry, founded Binance in 2017 and has been free on a $175 million bond. He has agreed not to appeal any sentence within federal guidelines. Binance itself agreed to a massive $4.32 billion criminal penalty, including a $1.81 billion fine and $2.51 billion in restitution, as well as an additional $50 million payment to the U.S. Commodity Futures Trading Commission.

The sentencing hearing for Zhao is scheduled for April 30 before U.S. District Judge Richard Jones. The outcome of this high-profile case will have significant implications for the cryptocurrency industry and the enforcement of anti-money laundering laws.