Changpeng Zhao, the founding father of Binance, the world’s largest cryptocurrency exchange, is because of be sentenced Tuesday in a Seattle courtroom, where U.S. prosecutors are asking a judge to present him a three-year prison sentence for enabling rampant money laundering on the platform.
Zhao pleaded guilty and resigned as CEO of Binance as an organization in November agreed to pay $4.3 billion to make clear related allegations. U.S. officials said Zhao intentionally looked the opposite way as illegal actors conducted transactions that supported child sexual abuse, illegal drug trafficking and terrorism.
“He made a business decision that violating U.S. law was the best way to attract users, build his business, and line his pockets,” the Justice Department wrote in a sentencing memorandum last week.
Zhao’s lawyers insist he should receive no prison sentence in any respect, citing his willingness to travel to the United States from the United Arab Emirates, where he and his family live, to plead guilty, regardless that the UAE doesn’t have an extradition treaty In the USA, one person had already been sentenced to prison for similar violations of the Bank Secrecy Act, it was said.
“I want to take responsibility and close this chapter in my life,” Zhao said as he entered his guilty plea for failure to stop money laundering. “I want to come back. Otherwise I wouldn’t be here today.”
But prosecutors say nobody has ever violated the Bank Secrecy Act to the extent that Zhao did. The three-year prison sentence sought is twice the rule of thumb limit for the crime. Binance allowed greater than 1.5 million virtual currency trades — totaling nearly $900 million — that violated U.S. sanctions, including those against Hamas’ Al-Qassam Brigades, al-Qaeda and Iran.
Zhao knew that Binance was required to implement anti-money laundering protocols, but as an alternative directed the corporate to obscure customers’ locations within the United States to avoid complying with U.S. laws, prosecutors said.
The cryptocurrency industry has been hit by scandals and market crashes. Nigeria did this most recently desired to try Binance and two of its executives on charges of cash laundering and tax evasion.
Zhao was perhaps best generally known as a predominant rival Sam Bankman Friedthe founding father of FTX, the second largest crypto exchange before it collapsed in 2022. Bankman-Fried was convicted last November Fraud for stealing a minimum of $10 billion from customers and investors and sentenced to 25 years in prison.
Zhao and Bankman-Fried were originally friendly competitors within the industry, with Binance investing in FTX when Bankman-Fried launched the exchange in 2019. However, the connection between the 2 soured, culminating in Zhao announcing that he would sell all of his cryptocurrency investments to FTX in early November 2022. Per week later, FTX filed for bankruptcy.
