TL;DR
- The U.S. Department of Justice (DOJ) seeks a three-year prison sentence for Changpeng Zhao, former CEO of Binance.
- The request is based on Zhao’s deliberate violation of U.S. law.
- Zhao’s defense argues for probation, claiming he was unaware of suspicious transactions on Binance.
The U.S. Department of Justice has requested a three-year prison sentence for Changpeng Zhao, the former CEO of Binance, following accusations of money laundering. The DOJ’s request exceeds federal sentencing guidelines, which originally suggested an 18-month sentence for Zhao.
The proposed sentence by the Department of Justice is based on Zhao’s deliberate violation of U.S. law, taking advantage of Binance’s “Wild West” strategy by failing to comply with U.S. anti-money laundering requirements. According to DOJ lawyers, this strategy allowed CZ to become one of the richest people in the world and a celebrity in the crypto industry.
Zhao had resigned as CEO of Binance in November 2023 after pleading guilty to money laundering violations. The decision was part of an agreement with the DOJ. Under the terms of the agreement, Binance was fined $4.3 billion and ordered to completely exit the U.S. market. Zhao himself was fined $50 million and prohibited from any involvement with the exchange for at least three years.
CZ Prepares Defense Against the DOJ
Zhao’s defense has countered the Department of Justice’s request, arguing for probation instead of prison. They maintain that Zhao has already accepted responsibility for his actions and has paid a substantial fine. They also argue that he was unaware of the details of suspicious transactions on Binance and that these transactions represented an insignificant part of the platform’s total business.
The hearing where Zhao’s sentence will be determined is scheduled for April 30th. There, it will be decided whether he will receive a prison or probation sentence. In the meantime, CZ is subject to travel restrictions and cannot leave the United States. The legal dispute between the magnate and the U.S. justice system remains a topic of great interest for the crypto industry. Its outcome could have significant implications for the future of Binance and the industry as a whole.
