tl;dr
Binance's founder and former CEO, Changpeng "CZ" Zhao, faces a DOJ recommendation of three years in prison and a $50 million fine for violating federal sanctions and money laundering laws. His defense argues for no jail time, proposing probation instead. The DOJ asserts that Zhao's misconduct had ma...
Binance's founder and former CEO, Changpeng "CZ" Zhao, faces a DOJ recommendation of three years in prison and a $50 million fine for violating federal sanctions and money laundering laws. His defense argues for no jail time, proposing probation instead. The DOJ asserts that Zhao's misconduct had massive scope and ramifications, calling for a significant sentence. The defense claims Zhao was not explicitly informed of specific criminal transactions on Binance and asserts that he should be sentenced to probation. The sentencing hearing, originally set for February, was postponed to April 30. Binance, in a separate case, agreed to a $4.3 billion fine and court-appointed monitoring.
Binance's founder and former chief executive, Changpeng "CZ" Zhao, should spend three years in prison for his role in enabling the crypto exchange to violate federal sanctions and money laundering laws, the U.S. Department of Justice said Tuesday night. The former CEO's attorneys argued he should serve no jail time, citing the fine he paid and his "extraordinary acceptance of responsibility." Attorneys with the DOJ filed a sentencing memo arguing he should spend 36 months in prison and pay a $50 million fine after he pleaded guilty to violating the Bank Secrecy Act last November. Hours later, Zhao's defense team filed its own sentencing memo, saying "no defendant in a remotely similar BSA case has ever been sentenced to incarceration." Instead, they suggested he be sentenced to probation, which could include home confinement at his home in Abu Dhabi.
Zhao originally faced up to 18 months in prison under the terms of his plea agreement. The DOJ argued in Tuesday's filing that "the scope and ramifications of Zhao's misconduct were massive," and so "an upward variance is appropriate here." "In part because Zhao failed to implement an effective AML program at Binance, illicit actors used Binance’s exchange in various ways, including operating mixing services that hid the source and ownership of cryptocurrency; transacting in illicit proceeds from ransomware attacks; and moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams," the filing said, pointing to fund movements from darknet markets and crypto mixers.
UPDATE (April 24, 2024, 06:05 UTC): Adds additional detail. UPDATE (April 24, 2024, 07:30 UTC): Adds defense filing information.
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