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U.S. Department of Justice Recommends Three-Year Jail Sentence for Former Binance CEO for Money Laundering Charges
The U.S. Department of Justice (DoJ) recently filed a sentencing memo recommending that former Binance CEO Changpeng ‘CZ’ Zhao serve a three-year prison sentence for money laundering charges, with his sentencing scheduled for April 30. The memo argues that the court should “impose an above-guidelines sentence of 36 months of imprisonment,” citing Zhao’s deliberate violation of U.S. law.
The prosecution asserts that Zhao took a calculated risk by assuming he would not be apprehended and that the repercussions, if caught, would be minimal. Furthermore, Binance’s lax compliance with U.S. anti-money laundering regulations, described as a “Wild West” approach, significantly contributed to Zhao’s accumulation of wealth and status as a prominent figure in the crypto industry.
This recommendation exceeds conventional federal sentencing guidelines, under which Zhao could have faced an 18-month jail term. By advocating for a harsher penalty, the DoJ aims not only to address Zhao’s wrongdoing but to send a clear deterrent signal to the global community.
Background and Legal Ramifications
During Zhao’s tenure, Binance surged to become the world’s largest cryptocurrency exchange by trading volume. In November 2023, he resigned as CEO of the platform after admitting to money laundering and sanctions violations in the U.S. as part of a settlement with the DoJ. The agreement mandated Binance pay $4.3 billion in fines and cease operations in the United States entirely.
As part of the settlement, Zhao received a $50 million fine, coupled with a restriction from engaging with Binance for at least three years. In anticipation of his sentencing, which includes a $175 million bond, Zhao must adhere to travel restraints imposed by U.S. District Judge Richard Jones to prevent flight risks.
Despite these legal challenges, Binance confronts an active lawsuit filed by the U.S. Securities and Exchange Commission (SEC). Subsequently, the exchange sought dismissal of the lawsuit through a sequence of filings in December.
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