Crypto Magnate Changpeng Zhao Faces 36-Month Sentence for Money Laundering Conviction
Binance founder and former CEO Changpeng Zhao is facing sentencing on April 30th following his guilty plea for money laundering in November 2023.
As U.S. authorities prepare to sentence Changpeng “CZ” Zhao, prosecutors have recommended a prison term for the former CEO. They have proposed a 36-month sentence after Zhao admitted to breaching anti-money laundering laws, as stated in a court filing on April 23rd addressed to the U.S. district court for the Western District of Washington.
“The severity of Zhao’s deliberate violation of U.S. law and its repercussions justify an above-guideline sentence of 36 months,” the prosecutors stated in the filing.
Zhao, who resigned as Binance CEO in November 2023, pleaded guilty to money laundering charges in the U.S. He was also hit with a $50 million fine, along with significant penalties imposed on Binance.
Federal sentencing guidelines allow for a maximum prison term of 18 months for Zhao, who agreed not to appeal any sentence up to that duration. He has remained free in the U.S. on a $175 million bond.
Following his admission of violating U.S. money laundering laws, Zhao and Binance reached a settlement with the U.S. government, agreeing to pay fines totaling $4.3 billion to resolve the criminal case. In exchange, Binance could continue its operations under U.S. law compliance.
Despite stepping down from Binance, Zhao maintains his involvement in the cryptocurrency industry. In March, he announced a new educational venture focused on crypto and blockchain, emphasizing that it would not introduce new tokens.
Dubbed Giggle Academy, the project is aimed at a younger audience, specifically two- to three-year-olds, according to Zhao’s post on X on April 18th.
On April 24th, Zhao unveiled the logo for his educational project. “We designed the Giggle Academy logo to embody youthfulness, fun, positivity, and growth. We also aimed to pay homage to our ‘Binance heritage,'” Zhao wrote.
Binance Co-Founder Changpeng Zhao’s Trial Commencing on April 30
As reported by Reuters, Federal prosecutors are advocating for a 36-month prison term for Zhao, citing the severity of his violations under the Bank Secrecy Act. Additionally, the sentencing memorandum filed on Tuesday proposes a significant fine of $50 million.
Prosecutors in the case have emphasized the far-reaching consequences of Zhao’s actions on the integrity of the financial system, urging a stringent sentence. Their aim is to hold Zhao accountable and discourage similar misconduct by others within the industry.
This stance marks a notable departure from the previous plea agreement, which had suggested a maximum sentence of 18 months.
Legal proceedings involving Zhao have faced delays, with his sentencing now scheduled for April 30. Since his initial court appearance in Seattle last year, Zhao has been unable to return to Dubai, where he resides with his partner and children.
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