Binance founder should be sentenced to 3 years in prison, prosecutors say

Lawyers for Changpeng Zhao, the founder of crypto exchange Binance, have countered that he should not receive prison time.

Changpeng Zhao, the founder of cryptocurrency exchange giant Binance, is expected to go to prison for three years after breaking the law “on an unprecedented scale” and pleading guilty of money laundering violations, federal prosecutors wrote in court. filing Wednesday.

Defense lawyers countered in their own memo that Mr. Zhao, 47, should not receive prison time and face a probation sentence, arguing that he had accepted responsibility for his crime and showed a philanthropic commitment.

A federal judge in Seattle, Richard A. Jones, is on the point to evaluate those recommendations at a sentencing hearing for Mr. Zhao on Tuesday. His conviction will be the latest milestone in a series of criminal prosecutions targeting some of the most powerful figures in the global cryptocurrency industry.

Just 18 months ago , Mr. Zhao, who holds a prominent position as Binance's chief executive, helped set off the chain of events that led to the collapse of FTX, Binance's biggest rival, and the imprisonment of the founder of FTX, Sam Bankman-Fried, who was sentenced to 25 years in prison for fraud. Now, Mr. Zhao faces his own prison sentence after reaching a deal with prosecutors in November, admitting that he failed to set up an adequate system at Binance to prevent money laundering.

Under federal guidelines, this crime carries a sentence of 12 to 18 months, prosecutors wrote in their memo. They noted that the U.S. Probation Department had recommended five months in prison for Mr. Zhao. But the government is seeking a three-year prison sentence, the memo said, because of the "scale and consequences" of Mr. Zhao's behavior.

En As the founder of Binance, Mr. Zhao was once arguably the most powerful executive in the cryptocurrency industry. At times, Binance processed up to two-thirds of all crypto transactions. Mr. Zhao has a fortune worth $33 billion, according to Forbes.

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