In a significant development in the legal saga surrounding Binance, the world’s largest cryptocurrency exchange, U.S. prosecutors have recommended a 36-month prison term for its founder, Changpeng Zhao.
The recommendation follows Zhao’s guilty plea to violating laws against money laundering, a pivotal moment in the ongoing legal battle between Binance and U.S. authorities.
Zhao, commonly known as CZ, stepped down as Binance’s chief last November, simultaneously admitting to the violations alongside the exchange.
The firm agreed to a hefty penalty of $4.32 billion as part of the settlement with prosecutors.
According to court filings submitted to the U.S. district court for the western district of Washington, prosecutors argued that the magnitude of Zhao’s willful violation of U.S. law warranted an above-guidelines sentence.
While federal sentencing guidelines set a maximum term of 18 months in prison for Zhao, prosecutors emphasized the severity of the violations and their consequences in advocating for the extended sentence.
The legal scrutiny surrounding Binance stems from allegations that the exchange failed to report over 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and ISIS.
Furthermore, prosecutors alleged that Binance’s platform facilitated the sale of child sexual abuse materials and served as a recipient of a significant portion of ransomware proceeds.
As part of the settlement, Zhao agreed to pay a $50 million fine and disengage from any involvement with Binance, the platform he founded in 2017.
The penalties imposed on Binance included a staggering $1.81 billion criminal fine and restitution of $2.51 billion.
The recommendation for a 36-month prison term underscores the seriousness with which U.S. authorities are addressing violations within the cryptocurrency industry.
The outcome of Zhao’s sentencing, scheduled for April 30 in Seattle, will likely have far-reaching implications for both Binance and the broader cryptocurrency ecosystem.
As regulatory scrutiny intensifies, stakeholders across the industry are closely monitoring developments to gauge their impact on the future of cryptocurrency exchanges and their founders.