Key Takeaways
- US prosecutors recommend a 36-month prison sentence for Binance founder Changpeng Zhao, exceeding federal guidelines, which suggest a maximum of 18 months;
- As part of his plea agreement, Zhao stepped down as CEO and agreed to a $4.3 billion fine with Binance to settle charges and continue US operations;
- Zhao has received support from 161 letters advocating leniency.
US prosecutors have proposed a 36-month prison sentence for Changpeng "CZ" Zhao, the founder of Binance, the world's largest crypto exchange.
This recommendation, detailed in an April 23 court filing to the US District Court for the Western District of Washington, exceeds the federal sentencing guidelines, which suggested a maximum of 18 months.
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Prosecutors have also suggested a $50 million fine, citing the severity of Zhao's actions.
Given the magnitude of Zhao’s willful violation of US law and its consequences, an above-Guidelines sentence of 36 months is warranted.
As part of a settlement with the Department of Justice, Zhao pleaded guilty to violating anti-money laundering laws and stepped down as CEO of Binance in November 2023.
He and Binance also agreed to pay $4.3 billion in fines to end the criminal case, allowing the crypto exchange to continue operating in the US while adhering to regulations.
Currently out on a $175 million bond, CZ has acknowledged his wrongdoing and, in a letter to Judge Richard A. Jones, expressed remorse for his actions:
There is no excuse for my failure to establish the necessary compliance controls at Binance. I assure you this encounter with the criminal justice system will be my last.
Zhao has also received a lot of support, with 161 letters from family, colleagues, and influential figures submitted to the court, all advocating for leniency in his sentencing. These letters portray CZ as a dedicated professional and a caring father, emphasizing his contributions to the crypto industry and various philanthropic efforts.
Support also came from Tigran Gambaryan, Binance's Head of Financial Crime Compliance, who, despite currently being detained in Nigeria, wrote:
While acknowledging CZ’s prior missteps, I can attest to his integrity, business insight, and philanthropic actions have had a ripple effect, influencing not only Binance’s corporate philosophy but also positively impacting lives globally.
Despite the legal proceedings, Zhao remains active in the crypto community. He recently announced Giggle Academy, an educational initiative introducing young learners to technology.
The sentencing of Changpeng Zhao is scheduled for April 30.
As the date approaches, the crypto community awaits the final decision, given its potential implications for the industry.
