U.S. Prosecutors Seek Three-Year Sentence For CZ 

Department of Justice demands extended sentence for Binance's former CEO, Changpeng Zhao.

By: Mehab Qureshi Loading...

U.S. Prosecutors Seek Three-Year Sentence For CZ 

Former Binance CEO, Changpeng Zhao (CZ), is facing a potential three-year prison sentence should the U.S. Department of Justice (DOJ).

The recommendation followed Zhao's pleading guilty in November to a litany of charges including violating anti-money laundering laws and enabling transactions between U.S. individuals and persons in sanctioned jurisdictions.

On April 23, prosecutors filed a sentencing memo recommending that Zhao pay a $50 million fine and serve three years in prison as a result of his November plea.

"A custodial sentence of 36 months — twice the high end of the Guidelines range — would reflect the seriousness of the offense, promote respect for law, afford adequate deterrence, and be sufficient but not greater than necessary to achieve the goals of sentencing," prosecutors said.

"The sentence in this case will not just send a message to Zhao but also to the world," the filing added.

Zhao’s official sentencing will take place on April 30 after being postponed from February. Since his first U.S. court appearance in November, Zhao has been unable to return to Dubai — where his family resides.

Case background

Zhao, who initially was asked to serve a maximum of 18 months as per his plea agreement, now confronts a tougher stance from the prosecutors. The DOJ argued that the far-reaching consequences of Zhao's actions justify a longer sentence.

The department pointed to Binance's shortcomings in anti-money laundering (AML) controls, which reportedly allowed illegal funds from ransomware and darknet markets to pass through the exchange.

"The scope and ramifications of Zhao's misconduct were massive," the DOJ stated, advocating for a stricter punishment.

In November, Binance also entered a guilty plea alongside Zhao. The platform accepted a fine of $4.3 billion and committed to oversight from a court-appointed monitor, who has yet to be named.