Ex-Binance CEO faces prison time in US over money laundering charges
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Justice Department lawyers argue that Changpeng Zhao made a business decision that violating US law was the "best way to attract users, build his company, and line his pockets."
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Former Binance CEO Changpeng "CZ" Zhao (middle) exits a federal court in Seattle, United States in November 2023 (AFP)
US federal prosecutors are urging former Binance CEO Changpeng Zhao to receive a prison sentence for charges related to money laundering.
Zhao stepped down from his position at the world's largest cryptocurrency exchange platform towards the end of last year as part of an agreement with US authorities.
He is scheduled to attend his sentence hearing on Tuesday.
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Binance failed to block transactions involving parties sanctioned by the United States like the Islamic State group and al-Qaeda, according to probes conducted by two Treasury agencies.
Currently residing in the UAE, Zhao admitted guilty to breaching US anti-money laundering regulations, while the crypto firm consented in February to a $4.3 billion settlement to resolve the accusations.
Prosecutors are pushing for a $50 million fine and a three-year prison sentence for the former chief, despite such offenses typically resulting in probation, as stated in a court document.
"He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets," Justice Department lawyers said of Zhao in a sentencing memorandum. "The sentence in this case will not just send a message to Zhao but also to the world."
Zhao's lawyers argued that receiving probation is fair, fitting, and aligns with legal precedents. They highlighted his acknowledgment of wrongdoing and his philanthropic endeavors. He stated on X in November, "I made mistakes, and I must take responsibility."
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Binance runs crypto exchanges and provides other services worldwide, but it took a severe hit since crypto markets collapsed and regulators began probing the legality of its business.
The volatile industry surged in 2021 with a range of complex products and celebrity endorsements propelling it to a valuation of over $3 trillion in 2022. But a series of scandals including the collapse of the FTX exchange and criminal charges for its executives saw public confidence evaporate and investors pull their money out.
