U.S. Prosecutors Push for 3-Year Sentence for Ex-Binance CEO Changpeng Zhao

• Binance founder Changpeng Zhao faces a potential sentencing of 36 months in prison, as U.S. prosecutors seek a heavier penalty over allegations of facilitating money laundering.
• Zhao’s defense challenges prosecutors’ claims, proposing probation instead of imprisonment, his sentencing, scheduled for April 30, awaits the court’s decision.

As Binance founder Changpeng Zhao awaits his sentencing by the end of April, U.S. prosecutors are seeking 36 months of prison over charges of allowing money laundering through his crypto platform.

The memorandum, submitted to the court for the western district of Washington, further argues that Zhao deserves a more severe sentence than what is recommended under advisory guidelines to “underscore the seriousness of his offenses.” According to these guidelines, Zhao’s sentence could fall within the range of 12 to 18 months in prison.

The U.S. prosecutors said:

A custodial sentence of 36 months—twice the high end of the Guidelines range—would reflect the seriousness of the offense, promote respect for law, afford adequate deterrence, and be sufficient but not greater than necessary to achieve the goals of sentencing.

The U.S. prosecutors have accused Zhao of willingly not implementing effective anti-money laundering measures as per the Bank Secrecy Act. Furthermore, they accused Zhao of deliberately processing transactions on Binance associated with unlawful activity, as well as facilitating transactions between Americans and those in sanctioned jurisdictions.

Binance is already facing two separate lawsuits from two of the topmost regulators – the U.S. SEC and the U.S. CFTC – over allegations of mishandling customers’ assets along with operating an illegal and unregistered exchange in the United States. Against the charges of these violations, Binance has agreed to the 4.3 billion settlement in its fights against the U.S. SEC, as reported by Crypto News Flash.

Zhao’s Defense Challenges U.S. Prosecutors

In the memorandum filed on Tuesday, prosecutors assert that Zhao orchestrated violations of U.S. law on an “unprecedented scale” and displayed a “deliberate disregard” for Binance’s legal obligations. They further argue that under Zhao’s leadership, Binance functioned under a “Wild West” framework. The memorandum stated:

“Zhao bet that he would not get caught, and that if he did, the consequences would not be as serious as the crime. But Zhao was caught, and now the Court will decide what price Zhao should pay for his crimes.”

Hours later, Zhao’s defense team also submitted its sentencing memorandum, contending that no defendant in a comparable Bank Secrecy Act (BSA) case has received a prison sentence. They also proposed probation as an alternative, potentially involving home confinement at his residence in Abu Dhabi. Zhao’s sentencing will take place next week on April 30.

In November of last year, Zhao resigned from his position as CEO of Binance following this plea deal. He was succeeded by Richard Teng, the former chief of the Abu Dhabi markets regulator.