Binance founder Changpeng Zhao faces sentencing; US seeks 3-year term for allowing money laundering

Changpeng Zhao, the laminitis of Binance, the world’s largest cryptocurrency exchange, faces sentencing successful a Seattle courtroom

SEATTLE -- Changpeng Zhao, the laminitis of Binance, the world's largest cryptocurrency exchange, faces sentencing Tuesday successful a Seattle courtroom, wherever U.S. prosecutors are asking a justice to springiness him a three-year situation word for allowing rampant wealth laundering connected the platform.

Zhao pleaded blameworthy and stepped down arsenic Binance CEO successful November arsenic the institution agreed to wage $4.3 cardinal to settee related allegations. U.S. officials said Zhao deliberately looked the different mode arsenic illicit actors conducted transactions that supported kid enactment abuse, the amerciable cause commercialized and terrorism.

“He made a concern determination that violating U.S. instrumentality was the champion mode to pull users, physique his company, and enactment his pockets,” the Justice Department wrote successful a sentencing memorandum filed past week.

Zhao's attorneys, importune helium should person nary situation word astatine all, citing his willingness to travel from the United Arab Emirates, wherever helium and his household live, to the U.S. to plead guilty, contempt the UAE's deficiency of an extradition pact with the U.S. No 1 has ever been sentenced to situation clip for akin violations of the Bank Secrecy Act, they said.

“I privation to instrumentality work and adjacent this section successful my life,” Zhao said erstwhile helium entered his blameworthy plea to 1 number of failing to forestall wealth laundering. “I privation to travel back. Otherwise I wouldn’t beryllium present today.”

But prosecutors accidental nary 1 has ever violated the Bank Secrecy Act to the grade Zhao did. The three-year situation word they're seeking is doubly the line scope for the crime. Binance allowed much than 1.5 cardinal virtual currency trades — totaling astir $900 cardinal — that violated U.S. sanctions, including ones involving Hamas’ al-Qassam Brigades, al-Qaeda and Iran.

Zhao knew that Binance was required to institute anti-money-laundering protocols, but alternatively directed the institution to disguise customers' locations successful the U.S. successful an effort to debar complying with U.S. law, prosecutors said.

The cryptocurrency manufacture has been marred by scandals and marketplace meltdowns. Most precocious Nigeria has sought to effort Binance and 2 of its executives connected wealth laundering and taxation evasion charges.

Zhao was possibly champion known arsenic the main rival to Sam Bankman-Fried, the laminitis of the FTX, which was the second-largest crypto speech earlier it collapsed successful 2022. Bankman-Fried was convicted past November of fraud for stealing astatine slightest $10 cardinal from customers and investors and sentenced to 25 years successful prison.

Zhao and Bankman-Fried were primitively affable competitors successful the industry, with Binance investing successful FTX erstwhile Bankman-Fried launched the speech successful 2019. However, the narration betwixt the 2 deteriorated, culminating successful Zhao announcing helium was selling each of his cryptocurrency investments successful FTX successful aboriginal November 2022. FTX filed for bankruptcy a week later.