• DOJ Says Binance Founder Changpeng Zhao Should Spend Three Years in Prison
• The DOJ wants Zhao to serve 36 months after his guilty plea last year
• Zhao’s sentencing is scheduled for January 2024
The DOJ wants Zhao to serve 36 months after his guilty plea last year. The DOJ made this recommendation in a court filing on Monday.
Zhao’s Charges
In October, Zhao pleaded guilty to violating the Bank Secrecy Act. He admitted that Binance intentionally failed to establish an effective anti-money laundering program.
Binance exchanged over $700 million with hackers and drug dealers, among others. The exchange also concealed the identities of customers involved in suspicious transactions.
Zhao took responsibility for the company’s lack of anti-money laundering measures from 2017-2021. During this period, he acted as Binance’s controlling shareholder and CEO.
The DOJ’s Sentencing Recommendation
Federal prosecutors stated that Zhao deserves 36 months in prison. This reflects the seriousness of his offenses.
They claim that Zhao’s actions harmed the cryptocurrency industry. The industry lacks regulatory guardrails against money laundering already. His actions at Binance exacerbated the situation.
Prosecutors also recommended a $500,000 fine and 3 years of supervised release for Zhao.
Zhao’s Defense
Zhao has not yet been sentenced. His attorneys will submit their own sentencing recommendation to the court ahead of a sentencing hearing.
They will likely argue for more lenient punishment. Zhao has taken steps to improve Binance’s compliance program since the charges. The company also banned U.S. customers in 2021.
His attorneys may note that Zhao cooperated extensively with blockchain analytics firm Chainalysis. This helped law enforcement with over 120 investigations not related to Binance.
The Outcome
Ultimately the judge will decide on the appropriate sentence after considering both recommendations.
Zhao was arrested in Germany and extradited to the U.S. last year. He has remained in custody since then.
Conclusion
The case against Changpeng Zhao marked the first time a cryptocurrency exchange CEO faced criminal charges. His sentencing will set an important precedent for anti-money laundering enforcement in crypto.
