Binance Founder; Changpeng Zhao Faces Sentencing For Money Laundering

The founder of Binance, the biggest cryptocurrency exchange in the world; Changpeng Zhao, is scheduled to be sentenced today in a Seattle courtroom.

US prosecutors are requesting that the judge sentence him to three years in jail for permitting widespread money laundering on the network.

Back in November, Zhao entered a guilty plea and resigned as CEO of Binance, after the company agreed to pay $4.3 billion (€5.1 billion) to resolve related charges. Read here

According to US investigators, Zhao purposefully turned a blind eye to unlawful actors carrying out transactions that financed terrorists, illegal drug trade, and child s*x abuse.

“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” the Justice Department stated in a sentencing document that was filed last week.

Zhao’s lawyers argue that he shouldn’t face any jail time at all, pointing out that he is willing to go from the United Arab Emirates, where he and his family reside, to the United States to enter a guilty plea, even though the UAE and the US do not have an extradition agreement.

They claimed that no one had ever been imprisoned for comparable Bank Secrecy Act offenses.

Zhao stated the following when he pled guilty to one count of failing to prevent money laundering: “I want to take responsibility and close this chapter in my life. I want to come back. Otherwise, I wouldn’t be here today.”

They are asking for a three-year prison sentence, which is double the recommended sentence for the offense.

More than 1.5 million virtual currency trades worth about $900 million that broke US sanctions were approved by Binance, including ones involving Iran, al-Qaeda, and the Hamas-affiliated al-Qassam Brigades.

Although Zhao was aware that Binance needed to implement anti-money-laundering procedures, prosecutors claim he gave the order to conceal customers’ locations within the US to evade US law. Market crashes and scandals have plagued the bitcoin sector.

Binance and two of its executives are currently standing trial in Nigeria for alleged tax evasion and money laundering.

Perhaps the most well-known aspect of Zhao’s profile was his primary rivalry with Sam Bankman-Fried, the creator of FTX, the second-biggest cryptocurrency exchange before its collapse in 2022.

In November, Bankman-Fried was found guilty of fraud and given a 25-year prison sentence for taking at least $10 billion from investors and customers.

Binance invested in FTX when Bankman-Fried started the exchange in 2019, and Zhao and Bankman-Fried were once amicable rivals in the industry.

But their relationship soured, to the point where Zhao said in early November 2022 that he was selling all of his bitcoin holdings in FTX.

A week later, FTX filed for bankruptcy.

Gentle Reminder: Be careful how you use your authority and influence, be wise, and treat others with respect.

Chychy Jonas