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Binance founder Changpeng Zhao faces 3 years in prison for money laundering

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The US Attorney’s Office is seeking a 3-year prison sentence for Binance founder Changpeng Zhao, according to a court filing on Tuesday.

Zhao is scheduled to be sentenced in Seattle on April 30 after pleading guilty in November to violating U.S. anti-money laundering laws. He has stepped down from his role as CEO of the crypto exchange but retains a majority stake. As part of the agreement, he agreed to pay a 50 million USD fine, while the company offered to pay 4.3 billion USD in fines and restitution.

“Given the magnitude of Zhao’s willful violation of U.S. law and its consequences, an above-guideline sentence of 36 months is warranted,” the U.S. Attorney’s Office said.

Prosecutors push for tougher penalties for crypto mogul’s crimes

Zhao was originally expected to serve up to 18 months in prison, a term he accepted without appeal. In November, he was released on 175 million USD bail while awaiting sentencing on banking law violations, but he still had to abide by travel restrictions within the United States .

Now prosecutors are seeking a harsher sentence for him than federal sentencing guidelines recommend.

“Zhao has received an enormous reward for his violation of U.S. law,” the complaint states. “And the price of that violation must be substantial to effectively punish Zhao for his criminal actions and deter others who are tempted to build fortunes and business empires by breaking U.S. law.

Prosecutors allege that Zhao failed to establish a robust anti-money laundering (AML) program at Binance, allowing illicit actors to exploit the exchange. In addition, actors used Binance for activities such as operating mixing services to conceal the origin of cryptocurrencies.

Binance is also said to have facilitated transactions between Iranian customers and US customers. This move undermined US sanctions against Iran and jeopardized the exchange’s liquidity.

Binance: Operational deficiencies and reporting failures

In February, a settlement identified significant operational deficiencies at Binance, most notably the platform’s failure to report more than 100,000 suspicious transactions linked to designated terrorist organizations such as Hamas, Al Qaeda and ISIS.

Despite the legal hurdles, Zhao’s wealth has grown significantly over the past year, increasing by nearly 10 billion USD, according to the Bloomberg Billionaires Index. His current fortune stands at more than 42 billion USD, making him the 29th richest person in the world, according to the index.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.