By Chris Prentice and Jonathan Stempel
NEW YORK (Reuters) – U.S. prosecutors want Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange, to serve three years in prison after pleading guilty to violating anti-money laundering laws.
Prosecutors filed the request Tuesday evening in Seattle federal court.
They said sentencing Zhao to twice the maximum 18 months recommended under federal guidelines would reflect the extent of his intentional violations and send a message that “the right choice, every time, is to comply with the law.”
Lawyers for Zhao asked for probation. U.S. District Judge Richard Jones is expected to sentence Zhao on April 30.
Once the most powerful figure in the crypto industry, Zhao, 47, stepped down as head of Binance last November when he and the exchange admitted to dodging anti-money laundering requirements under the Bank Secrecy Act.
Binance agreed to a criminal fine of $4.32 billion.
Prosecutors said Binance, using a “Wild West” model that welcomed criminals, reported no more than 100,000 suspicious transactions with designated terrorist groups, including Hamas, Al Qaeda and the Islamic State of Iraq and Syria, or ISIS.
They also said Zhao’s platform also supported the sale of child sexual abuse material and received a large portion of the ransomware revenue.
“He made a business decision that breaking U.S. law was the best way to attract users, build his business and line his pockets,” prosecutors said.
In their request for leniency, Zhao’s lawyers cited the first-time offender’s “undaunted” acceptance of responsibility, his $50 million criminal fine, and that no suspect in a remotely similar case has been jailed.
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They also said Zhao has made Binance an industry leader in compliance, “despite the initial failures that led to this prosecution.” Zhao founded Binance in 2017.
He was released on a $175 million bond and agreed not to appeal a sentence within federal guidelines.
The penalty for Binance included a $1.81 billion criminal fine and $2.51 billion in restitution. Zhao also paid $50 million to the U.S. Commodity Futures Trading Commission, his lawyers said.
The case is U.S. v. Zhao, U.S. District Court, Western District of Washington, No. 23-cr-00179.
