In yet another chapter of legal proceedings in the cryptocurrency industry in the United States, recently, the Department of Justice (DOJ) demanded that a three-year sentence be given to the founder of the largest cryptocurrency exchange in the world, Binance, Changpeng Zhao (CZ).
A sentencing memorandum, dated April 24, highlighted that CZ could face a sentence of three years, thus spending 36 months in prison. In November 2023, as part of a $4,3 billion settlement, he stepped down as CEO of Binance and pleaded guilty to violating the country's anti-money laundering laws.
The prosecutors in the case explained that the long sentence is justified when analyzing the alleged crimes of CZ, which according to them include: failing to report more than 100.000 suspicious transactions with terrorist groups including Hamas, Al Qaeda and ISIS, as well as the sale of child sexual abuse materials and ransomware deals.
“A prison sentence of 36 months (…) would reflect the seriousness of the offense, promote respect for the law, provide adequate deterrence and be sufficient, but not more than necessary, to achieve the objectives of the sentence. (…) Given the magnitude of Zhao's intentional violation of U.S. law and its consequences, a sentence of 36 months, in accordance with the above guidelines, is justified,” reads part of the document.
Shortly after the DOJ presented the document, CZ's defense presented its own sentencing memorandum, in which it highlighted:
“No defendant in a remotely similar BSA case has been sentenced to prison. Mr. Zhao shouldn't be the first. Given the need to avoid unjustified sentencing disparities, Mr. Zhao's extraordinary acceptance of responsibility, his long history of philanthropy and community service, the five and a half months he has spent away from his family since pleading guilty, and the collateral consequences of his conviction, Mr. Zhao respectfully requests that the Court sentence him to probation,” stated.
It is worth remembering that, in February, the Binance resolved the legal dispute by paying the fine. Binance, a giant in the cryptocurrency sector, finalized a legal settlement by shelling out an impressive sum of US$4,3 billion. This value stands out as a milestone in financial enforcement actions, following approval by federal judge Richard Jones.
The settlement comprised a $1,8 million criminal fine and an additional $2,5 million in forfeitures for failures to conduct due diligence. According to information from Reuters, Binance was criticized for the lack of a robust anti-money laundering (AML) system, facilitating the use of its services in illicit activities, including money laundering, ransomware, darknet transactions, among others.
