Changpeng Zhao – the prosecutor's office requests 3 years in prison for the founder of Binance

Federal prosecutors asked the court for 3 years in prison for the founder Binance, Changpeng Zhao (CZ). They want a harsh penalty even though CZ pleaded guilty last year to violating federal money laundering laws and sanctions.

The Department of Justice's lawsuit, filed in federal court in Seattle, is full of strong language.

“The 36-month sentence will hold Zhao accountable for his willful criminal actions.” – we read in the lawsuit.

The prosecutor's office wants the verdict to be not only fair, but also educational for society and a warning to possible imitators.

“It will not only send a message to Zhao, but also to the world.” – write the prosecutors.

The punishment for Changpeng Zhao is higher than in the code?

Interestingly, under federal guidelines, a crypto billionaire can receive a maximum prison sentence for his crimes… 18 months. However, this did not prevent the prosecutor's office from requesting a twice as high sentence.

They believe that 18 months does not adequately reflect the seriousness of Zhao's crime, “nor does it provide an adequate specific or general deterrent.”

Prosecutors are convinced that Changpeng Zhao acted intentionally and his lack of interest in where the stock exchange clients' funds come from Binance was simply a business decision. In this way, the exchange wanted to attract as many users as possible and gain a financial advantage on the market, which ultimately succeeded.

Today, Binance is by far the largest in the world cryptocurrency exchange both in terms of number of users and turnover. The daily turnover on Binance exceeds USD 9 billion (the second cryptocurrency exchange in this ranking, Bybit, has a daily turnover of USD 3,2 billion). The Binance exchange website is accessed by over 101 billion users every month. The second largest exchange is Coinbase, whose website is visited by over 65 billion people every month.

Prison? NO. $50 million fine? Here you go

Changpeng Zhao is not willing to accept a prison sentence, especially at such a time. However, this does not mean that he does not cooperate with prosecutors. They have already agreed, for example, on the amount of the fine. CZ quickly agreed to a settlement under which it will pay a fine of USD 50 million.

It's not about gangsters but about politics?

According to commentators, the whole matter is not about the exchange laundering dirty money, e.g. from drug trafficking. The reason for Binance's legal problems is… politics.

They accuse Changpeng Zhao of not reporting approximately PLN 100. "suspicious" transactions, but their main allegation is that they allowed transactions totaling almost $900 million between US users and users in Iran. That's why a fine is not enough and prosecutors insist on a prison sentence.

– If Zhao's sentence is to have any significant deterrent effect on similarly situated executives of large financial institutions who operate in the United States while flouting U.S. law in the name of profits, Zhao must face a significant prison sentence – we read in the indictment.

The verdict in the case is scheduled for April 30 this year. Previously, in November last year, Binance admitted violating anti-money laundering and illegal money transfer regulations. That's when Zhao stepped down as Binance's CEO and the company paid $4 billion in a settlement. Zhao, who is officially a citizen of the United Arab Emirates and Canada, was released on $175 million bail but was ordered to remain in the US.