Ex-Binance CEO Set to Face 3-Year-Long Jail Term, Expected to Appear in Court 

After Binance, the biggest crypto exchange went bust late last year, founder Changpeng Zhao has come under fire after pleading guilty to money laundering charges. On Tuesday, he’s expected to find out how much time he’ll be spending in prison.

In November 2023, the ex-CEO pled guilty to violating the Bank Secretary Act, the penalty for which is usually up to 10 years in prison.

DOJ Requested Federal Judges To Give Zhao 3 Years

However, considering his cooperation and guilty plea, the sentence will fall short. That means he’s expected to spend a year and a half. Meanwhile, a presentence report prepared by the court’s Probation Office stated that his sentence be reduced to five months.

Currently, Zhao’s defense team and the DOJ have varying recommendations regarding his sentence. The Department of Justice requested a federal judge to sentence the Binance founder to three years – double what was mentioned in his plea agreement. Meanwhile, his defense requested that he be given no prison time. Instead, they suggested that he be sentenced to probation and house arrest.

Zhao Agrees to Pay $50 Million In Fines

In the defense filing, his team also added a proposal from a security company as to how they’d secure his home. As part of his plea deal, Zhao agreed to pay a $50 million fine, a mere fraction of his total net worth. On Monday, sources reported that he holds approximately $43 billion in assets under his name. In the event that he’s sentenced to more than a year and a half in prison, he can appeal the penalty.

On the day he pleaded guilty to the charges, Binance, which is known as the largest crypto exchange in the world, agreed to pay $4.3 billion in fines. As part of the agreement, he also stepped down from his position as CEO of the exchange he started back in 2017.

Binance Under Fire for Allowing Suspicious Trades

This comes after another crypto giant, Sam Bankman-Fried, got a 25-year sentence for money laundering and fraud last month. According to the memorandum by the DOJ, the exchange operated like the Wild West under Zhao. This is concerning when you consider how Binance was the go-to exchange for investors looking to enter the crypto trading market using the Alpha AI trading bot.

Reports indicate that it failed to report over 100,000 suspicious transactions because of poor security measures. These suspicious transactions include trades with terrorist groups like ISIS and Al-Qaida.

Prosecutors argue that this willful violation of US laws wasn’t a mere oversight or accident. Rather, he preferred to make a business decision, due to which violating these laws seemed like the best way to establish the company and make a profit. And despite the fine he’s agreed to pay, his fortune will remain intact – considering how he’s the 29th richest man in the world.

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