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US Prosecutors Demand 36-Month Sentence for Binance's CZ

Apr 24, 2024 1 min read

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Former Binance CEO Changpeng Zhao is facing a 36-month prison sentence as recommended by U.S. prosecutors for his role in enabling money laundering through the cryptocurrency exchange. The Department of Justice argues that the severity of Zhao's actions warrants a sentence above the federal guidelines, aiming to set a precedent for compliance with U.S. anti-money laundering regulations. Zhao, who resigned in November following a guilty plea, failed to implement the necessary anti-money laundering controls as mandated by the Bank Secrecy Act, allowing the processing of illicit transactions.

In addition to Zhao's criminal charges, Binance is facing multiple legal challenges, including lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission. The suits allege mishandling of customer assets and the operation of an unregistered exchange. Binance has agreed to pay $4.3 billion in penalties and is expected to cease its operations in the United States.

The case has also brought to light Zhao's involvement in the failure to report suspicious transactions linked to terrorist organizations and other illegal activities. Zhao's sentencing is scheduled for April 30 in Seattle, with the DOJ pushing for a substantial sentence to reflect the seriousness of the violations and to deter similar conduct in the financial industry. Despite the gravity of the charges, Zhao has requested probation rather than imprisonment.

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