The trial of Binance co-founder Changpeng Zhao is set to begin on April 30. According to Reuters, federal prosecutors are pushing for a 36-month prison sentence for Zhao, emphasizing the gravity of his offenses under the Bank Secrecy Act. Additionally, the sentence proposed on Tuesday includes a hefty fine of $50 million.
Related: Top Crypto Court Cases to Watch Post-SBF Sentencing
This event follows Zhao’s admission of guilt to charges of aiding the company in violating anti-money laundering laws and sanctions.
Zhao’s legal proceedings have been dragging on. His sentencing was postponed to April 30. Since his initial court appearance in Seattle last year, Zhao has been unable to return to Dubai, where he resides. The new stance represents a significant shift from the previous plea deal, which had suggested a maximum term of 18 months.
Given the scale of Zhao’s deliberate violations of U.S. laws and their consequences, a 36-month imprisonment is fully justified.
U.S. Prosecutors
Prosecutors also highlighted the wide-ranging impact of Zhao’s actions on the integrity of the financial system, calling for a stricter sentence. They aim to punish Zhao and deter similar conduct by others in the industry in the future.
Binance’s Leader Crypto Journey
CZ embarked on his path as a programmer at the tender age of 12 or 13 when his dad bought a computer for seven thousand dollars. Senior Zhao, well-versed in several coding languages, passed on his knowledge to his son. In high school, CZ broadened his tech horizons, then snagged a spot at McGill University in Montreal.
Life took a turn for this former programmer… with poker. In 2013, while playing with crypto investor Ron Cao and BTC China exchange boss Bobby Li, friends suggested CZ invest 10% of his capital in Bitcoins.
Since then, CZ’s became interested in blockchain technology, especially its potential to dodge hefty conversion fees during his frequent travels. Soon enough, his professional path in the crypto industry began.
His first gig? The crypto wallet service Blockchain.info. A year later, the crypto enthusiast moved to OKCoin, where he helmed the tech squad. The cooperation didn’t last long: CZ categorically didn’t like the falsifications and other fraudulent tricks that were practiced on the exchange. Talk about irony, huh? Amid the controversy, Zhao left the company.
Come 2017, he finally took the plunge to launch his own crypto exchange. The programmer-crypto enthusiast aimed to craft a product untethered from traditional finance and state institutions, providing solid customer support. Just 11 days after the initial placement of BNB tokens, the Binance exchange was founded, and within six months led the top crypto exchanges.
Legal fate of Changpeng Zhao
When Sam Bankman-Fried`s crypto empire collapsed in 2022, Zhao soon faced the wrath of regulators. Years earlier, Changpeng Zhao allegedly claimed that his company’s headquarters was wherever he happened to be. But all that changed in March 2023 when U.S. regulators accused the former CEO of Binance and his firm of violating U.S. securities laws.
Zhao’s admission of defeat in many ways marks the climax of international regulators’ ongoing efforts to rein in Binance and, consequently, the entire crypto industry. His capitulation signifies the second time in less than a year that the crypto world lost its biggest star, Changpeng Zhao, whose personal wealth in 2022 totaled $100 billion.
CZ built the Binance, which at one point controlled nearly two-thirds of spot trades on centralized exchanges, and played a significant role in spreading cryptocurrency. His exit comes as the industry desperately tries to stamp out fraud, scandals, and illicit activities.
He faces a prison sentence of 18 to 36 months based on a guilty plea that could have spared him from harsher punishment. In addition to CZ, Binance itself also pleaded guilty to related charges.
More Info:
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- The U.S. Justice Department Charged Three Individuals For $400M FTX Hack
- FTX and Alameda Research Transfer $10.8M to Binance, Coinbase, and Wintermute
U.S. authorities stated that Binance failed to report over 100,000 suspicious transactions involving certain terrorist groups, including Hamas, Al-Qaeda, and the Islamic State of Iraq and Syria or ISIS.
Prosecutors alleged that the Binance platform also facilitated the sale of child sexual abuse materials and received a significant portion of its revenue from ransomware programs. The company agreed to pay fines totaling $4.3 billion and be overseen by a court-appointed monitor.
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