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Binance CEO Changpeng Zhao sentenced for money laundering

Changpeng Zhao, the former CEO of Binance, the world’s leading cryptocurrency exchange, faces a substantial prison sentence following his admission of guilt to breaching US money laundering laws.

Zhao also known as “CZ,” could potentially serve a term twice as long as the maximum 18 months suggested by federal guidelines, as requested by US prosecutors before District Judge Richard Jones in Seattle.

Despite Zhao’s plea, prosecutors advocate for a tough sentence to set a precedent, emphasizing compliance with the law, particularly due to Zhao’s influential position in the crypto industry.

Legal experts express surprise at the severity of the prosecution’s request, suggesting it aims to deter future violations given Zhao’s prominence. Meanwhile, Zhao’s defense seeks probation, highlighting his acknowledgment of responsibility and substantial fine payment.

Industry impact and allegations

If sentenced, Changpeng Zhao would become the second significant cryptocurrency figure to face imprisonment after Sam Bankman-Fried received a 25-year sentence last month.

He allegedly embezzled $8 billion from FTX, his now-defunct cryptocurrency exchange. Bankman-Fried, who pleaded not guilty, is appealing his conviction and sentence.

Zhao resigned as Binance’s CEO in November, admitting to evading anti-money laundering laws, resulting in a $4.32 billion penalty. Prosecutors claim Binance fostered a “Wild West” environment, facilitating criminal activities and not reporting suspicious transactions, including with designated terrorist groups.

Prosecutors characterize Zhao’s actions as a deliberate decision to flout US laws to boost user engagement, expand his company, and enhance personal profits.

Changpeng Zhao has been released on a $175 million bond. He agreed not to contest any sentence within federal guidelines and has paid an additional $50 million to the Commodity Futures Trading Commission.

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