The former CEO of Binance Changpeng Zhao, the world’s largest cryptocurrency exchange, is awaiting sentencing after pleading guilty to violating U.S. money laundering laws. Changpeng Zhao, also known as “CZ,” may potentially face several years in prison.
U.S. prosecutors are urging District Judge Richard Jones in Seattle to impose a sentence twice the maximum 18 months suggested by federal guidelines.
They argue that a harsh penalty for Changpeng Zhao, once regarded as a prominent figure in the crypto industry, would emphasize the importance of complying with the law.
Robert Fisher, a partner at Nixon Peabody in Boston and a former federal prosecutor, expressed surprise at the prosecution’s request for a severe sentence despite Zhao’s guilty plea.
Fisher speculated that the aim might be to set a precedent due to Zhao’s high profile. “It’s uncommon to seek such an extended sentence above the sentencing guidelines,” Fisher remarked. “They intend for this to deter others.”
Changpeng Zhao’s legal team has requested probation, highlighting his prompt acceptance of responsibility and his payment of a $50 million criminal fine. They also noted Zhao’s clean record and emphasized that no similar defendant had been incarcerated in comparable cases.
If sentenced, Changpeng Zhao would become the second major figure in the crypto world to be imprisoned. Sam Bankman-Fried, the CEO of the now-defunct cryptocurrency exchange FTX, was recently sentenced to 25 years for embezzling $8 billion from FTX customers.
Bankman-Fried pleaded not guilty, claiming he had made errors but had not defrauded customers. He has appealed the conviction and sentence.
Following the collapse of cryptocurrency prices in 2022, several other crypto leaders are under scrutiny by U.S. authorities for fraudulent activities and misconduct.
Zhao resigned as CEO of Binance in November, along with the exchange’s admission of evading money laundering regulations under the Bank Secrecy Act.
