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US prosecutors are pursuing a three-year prison sentence for Binance founder Changpeng Zhao, according to a court filing made on Tuesday.
Zhao is set to be sentenced on April 30 in Seattle, having entered a guilty plea in November for violating US anti-money laundering regulations. He resigned from his position as CEO of the cryptocurrency exchange but still holds majority ownership. As part of the plea agreement, he consented to a $50 million fine, while the company proposed to pay $4.3 billion in fines and restitution.
“Considering the severity of Zhao’s deliberate breach of US law and its repercussions, a sentence exceeding the Guidelines of 36 months is justified,” stated US prosecutors.
Binance did not respond to Cryptonews’ request for comment by the time of publication.
Prosecutors Advocate for Stricter Penalty for Crypto Executive’s Offenses
Zhao was originally expected to face a maximum of 18 months in prison, a condition he accepted without contest. In November, he was released on a $175 million bail while awaiting sentencing for violations of banking laws. However, he was mandated to comply with travel restrictions within the United States.
Now, prosecutors are seeking a harsher punishment than what is suggested by federal sentencing guidelines.
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“Zhao gained substantial benefits from his infringement of US law,” the filing stated. “And the consequences of that infringement must be considerable to effectively penalize Zhao for his criminal actions and to deter others who might be tempted to amass wealth and business empires through violations of US law.”
Prosecutors assert that Zhao failed to implement a comprehensive anti-money laundering (AML) program at Binance. This purportedly allowed illicit actors to take advantage of the exchange. Furthermore, these actors utilized Binance for activities such as operating mixing services to obscure the origins of cryptocurrency.
Additionally, Binance is alleged to have enabled transactions between Iranian customers and US clients. This action undermined US sanctions against Iran and threatened the liquidity of the exchange.
Operational Deficiencies and Reporting Issues
In February, a settlement addressed significant operational shortcomings identified within Binance. Notably, this included the platform’s failure to report over 100,000 suspicious transactions associated with designated terrorist groups, including Hamas, al Qaeda, and ISIS.
Moreover, Binance faced accusations of facilitating transactions linked to child sexual abuse materials and proceeds from ransomware activities.
Despite encountering legal challenges, Zhao’s wealth has seen considerable growth over the past year, increasing by nearly $10 billion, according to the Bloomberg Billionaires Index. Currently, his net worth surpasses $42 billion, ranking him as the 29th richest person globally, as per the index.
The post Binance Founder Changpeng Zhao Faces 3-Year Prison Sentence for Money Laundering appeared first on Cryptonews.
