Changpeng Zhao, founder and CEO of Binance, attends the Viva Technology conference on innovation and startups at the Porte de Versailles exhibition center in Paris on June 16, 2022.
Benoit Tessier | Reuters
U.S. prosecutors are seeking a 36-month prison sentence for the former CEO of cryptocurrency exchange Binance on charges of facilitating money laundering, according to a sentencing memorandum released late Tuesday.
The memorandum filed in Western District Court in Washington said Zhao should serve a more severe sentence under the guidelines to “reflect the severity of his crimes.”
According to the advisory guidelines, Zhao’s sentence will be 12 to 18 months in prison.
“A sentence of 36 months’ imprisonment – twice the upper limit of the range set out in the Guidelines – will reflect the seriousness of the offence, promote respect for the law, provide adequate deterrence and be sufficient, but not more than necessary, to achieve the objectives sentencing.” US prosecutors announced this.
Zhao is accused of willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act, and for effectively allowing Binance to process transactions related to the proceeds of illegal activities, including transactions between Americans and sanctioned individuals. jurisdictions.
The US Securities and Exchange Commission and the Commodity Futures Trading Commission filed a separate lawsuit against Binance over alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the US.
The US, which separately accuses Binance and Zhao of violating the US Bank Secrecy Act and Iran sanctions, ordered Binance to pay $4.3 billion in fines and forfeiture. Zhao agreed to pay a fine of $50 million.
Zhao stepped down as Binance CEO in November last year after achieving this requirement and was replaced by former Abu Dhabi markets regulator head Richard Teng.
Zhao was not immediately available for comment when contacted through social media platform X. Binance had not yet responded to a request for comment when contacted by CNBC.
‘Unprecedented scale’ of financial crime
Prosecutors allege that Zhao violated US law on an “unprecedented scale” and that he “willfully ignored” Binance’s legal obligations.
In a memo Tuesday, prosecutors said that under Zhao’s control, Binance operated under a “Wild West” model.
“Zhao bet that he would not be caught, and if he was caught, the consequences would not be as serious as the crime,” the memo states.
“But Zhao was caught, and now the court will decide what price Zhao must pay for his crimes.”
Zhao is expected to be formally sentenced on April 30.
