US federal prosecutors are calling for ex-Binance chief Changpeng Zhao to be sent to prison when he appears Tuesday for sentencing on money laundering charges. Zhao, a Canadian, resigned from his post at the world’s largest cryptocurrency exchange platform late last year as part of a deal with US authorities.
According to investigations by two Treasury agencies, Binance failed to prevent transactions by movements such as the Islamic State group, al-Qaeda or the armed wing of Hamas. Zhao pleaded guilty to violating US anti-money laundering laws and Binance agreed in February to pay $4.3 billion to settle charges. Prosecutors want a judge to make Zhao pay a $50 million fine and spend three years behind bars for a crime that typically results in probation, according to a court filing.
“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” Justice Department lawyers said of Zhao in a sentencing memorandum. “The sentence in this case will not just send a message to Zhao but also to the world.”
Attorneys for Zhao countered in a filing that being punished with probation is just, appropriate, and in line with legal precedent. They cited Zhao’s acceptance of responsibility along with what they called his philanthropic track record. “I made mistakes, and I must take responsibility,” Zhao, who lives in the United Arab Emirates, said in a post on X, formerly Twitter, in November.
