US prosecutors want Changpeng Zhao, the founder and former CEO of Binance, the world's largest cryptocurrency exchange, to serve three years in prison after he pleaded guilty to violating anti-money laundering laws.
Prosecutors made the request in a filing Tuesday night in federal court in Seattle.
They said sentencing Zhao to twice the maximum 18 months recommended under federal guidelines would reflect the magnitude of his willful violations and send a message that “the right choice, every time, is to comply with the law.”
Zhao's lawyers asked for probation. U.S. District Judge Richard Jones is expected to sentence Zhao on April 30.
Once the most powerful figure in the crypto industry, Zhao, 47, stepped down as head of Binance last November when he and the exchange admitted to evading anti-money laundering requirements under the Bank Secrecy Act.
Binance agreed to a $4.32 billion criminal penalty.
Prosecutors said Binance, which used a “wild west” model that harbored criminals, failed to report more than 100,000 suspicious transactions with designated terrorist groups such as Hamas, al Qaeda and the Islamic State of Iraq and Syria, or ISIS
They also said that Zhao's platform also supported the sale of child sexual abuse materials and received a large share of the proceeds of the ransomware.
“He made a business decision that violating American law was the best way to attract users, build his company and line his own pockets,” prosecutors said.
In seeking leniency, Zhao's lawyers cited his “unflinching” acceptance of responsibility as a first-time offender, his $50 million criminal fine and that no defendant in a remotely similar case has been jailed.
They also said Zhao made Binance an industry leader in compliance, “despite the initial failures that led to this prosecution.” Zhao founded Binance in 2017.
He has been free on $175 million bail and agreed not to appeal any sentence within federal guidelines.
Binance's penalty included a $1.81 billion criminal fine and $2.51 billion in restitution. Zhao also paid $50 million to the US Commodity Futures Trading Commission, his lawyers said.
The case is US v. Zhao, US District Court, Western District of Washington, No. 23-cr-00179.
© Thomson Reuters 2024
