Changpeng Zhao, the founder and former CEO of Binance, has been recommended for a prison term of up to three years by the US Department of Justice (DOJ).
After Zhao was found to have violated US money laundering regulations and the US Bank Secrecy Act while serving as the head of Binance at the time, the Department of Justice (DOJ) sent a sentencing memo to the US States District Court of Washington in Seattle. The memo explains that the federal agency is seeking a sentence of 36 months in prison.
Last November, the DOJ discovered that Binance had violated AML and KYC regulations. As a result, a record-breaking $4.3 billion settlement was reached, and Zhao resigned as Binance CEO to be succeeded by Richard Teng. Zhao received a $50 million fine as well.
“There was no accident or oversight in Zhao’s willful violation of US law.” In its sentencing memo, the DOJ stated, “He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets.”
“In spite of realizing Binance was expected to follow US regulation, Zhao decided not to enroll the organization with US controllers; He decided against following fundamental US law.
A significant part of the charges come from Binance not having reasonable or potentially right consistence, AML and KYC methods set up, with the DOJ recognizing that Zhao supervised a “resolute infringement of US regulation”, which they consider as “no mishap or oversight”.
By transaction volume, Binance is still the largest cryptocurrency exchange in the world. Despite not officially regulating the company in accordance with US financial laws, Zhao’s leadership contributed to the platform’s rise to prominence.
The DOJ proclamation proceeded: ” Zhao’s tactic paid off. One compliance employee claimed that Binance told criminals, “Come to Binance, we got cake for you,” as it operated on a Wild West model and quickly became the largest cryptocurrency exchange.
“Subsequently, Zhao is quite possibly of the most extravagant individual on the planet and a big name in the crypto business. Zhao placed a wager that he would not be caught and that even if he was, the repercussions would not be nearly as severe as the crime.
“Yet, Zhao was gotten, and presently the Court will conclude what value Zhao ought to pay for his wrongdoings. In this instance, the sentence will not only convey a message to Zhao but also to the entire world.
Because of Zhao turning himself in immediately following the Binance charge in November, he was taking a gander at a potential jail sentence initially of year and a half. Be that as it may, this has since changed to three years because of the DOJ refering to the “extension and implications” of Zhao’s wrongdoing as “enormous”.
A sentence date was booked for February yet has been pushed back because of Zhao’s safeguard demanding being permitted to head out back to his residency in the UAE. Notwithstanding two endeavors, the Washington Court decided for the DOJ considering Zhao a flight risk.
It is now anticipated that the new date for the sentence will be held on April 30 at the federal court in Washington.