In a recent sentencing memorandum filed with the court for the western district of Washington, U.S. prosecutors are pushing for a harsher sentence of 36 months for the former CEO of cryptocurrency exchange Binance. This sentence is well above the suggested advisory guidelines, which recommend a range of 12 to 18 months in prison. The prosecutors argue that such a lengthy term is necessary to reflect the severity of the crimes committed by Zhao, to promote respect for the law, and to act as a deterrent to others who may consider engaging in similar illegal activities.
The charges against Zhao include accusations of deliberately failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act. Additionally, he is accused of enabling Binance to process transactions involving proceeds of unlawful activity, including transactions between Americans and individuals in sanctions jurisdictions. The prosecutors claim that Zhao’s actions violated U.S. law on an “unprecedented scale,” and that he showed a “deliberate disregard” for Binance’s legal responsibilities.
According to the prosecutors, under Zhao’s leadership, Binance operated under a “Wild West” model, with little consideration for legal requirements or consequences. They assert that Zhao took a gamble by engaging in these illegal activities, believing that he would not be caught or that the penalties would not be severe. However, with the filing of criminal charges and the impending sentencing, it is clear that Zhao’s actions did not go unnoticed or unpunished.
In addition to the charges against Zhao, Binance as a company has faced legal challenges from U.S. regulators. The Securities and Exchange Commission and the Commodity Futures Trading Commission have both sued Binance over alleged mishandling of customer assets and operating an unregistered exchange in the U.S. Furthermore, the U.S. has accused Binance and Zhao of violating the U.S. Bank Secrecy Act and sanctions on Iran, resulting in Binance being ordered to pay $4.3 billion in fines and forfeiture. Zhao himself has agreed to pay a $50 million fine as part of the settlement reached with prosecutors.
As the official sentencing for Zhao approaches, it is clear that the repercussions of his actions are severe and far-reaching. The case serves as a cautionary tale for others in the cryptocurrency industry and beyond, highlighting the importance of compliance with legal regulations and the consequences of failing to do so. Ultimately, Zhao’s fate will be decided by the court on April 30, and the outcome will have significant implications for both him and the future of Binance as a company.
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