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US Prosecutors Want Binance Founder Changpeng Zhao to Serve 3 Years Behind Bars

Federal prosecutors are pushing for a tougher 3-year prison term for Binance founder and former CEO Changpeng “CZ” Zhao in connection with his role in the global cryptocurrency exchange’s violation of sanctions and money laundering laws.

CZ Faces 3-Year Jail Time

Per a sentencing memo filed on April 23 to the U.S. district court for the Western District of Washington., attorneys for the Department of Justice recommend that the court “impose an above-Guidelines sentence of 36 months of imprisonment,” citing Zhao’s willful violation of U.S. law.” Along with the 36-month sentencing recommendation, the DOJ said CZ should also be expected to cough up the $50 million fine he agreed as part of a plea deal.

The filing reads, “That sentence, together with the agreed $50 million fine, is sufficient but not greater than necessary to balance the relevant 18 U.S.C. § 3553(a) factors and achieve the goals of sentencing.”

CZ bet on not getting caught, and that if he did, “the consequences would not be as serious as the crime,” the DoJ’s lawyers contended, and that Binance’s “Wild West” model of failing to comply with U.S. anti-money-laundering requirements had made the Binance founder “one of richest people in the world and a celebrity in the crypto industry.”

Prosecutors described how Zhao’s failure to implement an effective AML program resulted in Binance processing over $898 million in transactions, breaking US sanctions against Iran and other nations.

A “Message” To Zhao And The World

The 36-month sentencing recommendation exceeds federal sentencing guidelines that would have seen the former Binance CEO jailed for 18 months. The DOJ asserted that the recommended sentence would be a powerful deterrent to others considering violating U.S. law for financial gain.

“The sentence in this case will not just send a message to Zhao but also to the world. Zhao reaped vast rewards for his violation of U.S. law, and the price of that violation must be significant to effectively punish Zhao for his criminal acts and to deter others who are tempted to build fortunes and business empires by breaking U.S. law,” the filing said.

Zhao’s defense team attacked prosecutors’ 36-month prison term request, pointing out that “no defendant in a remotely similar BSA case has ever been sentenced to incarceration.” They instead suggested he be sentenced to probation, which could include house detention at his home in Abu Dhabi.

Despite stepping down from Binance as part of the plea agreement with U.S. regulators, CZ remains involved with the crypto space. The ex-Binance CEO unveiled a new educational initiative last month devoted to crypto and blockchain, emphasizing that the project does not entail new tokens.

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