U.S. prosecutors stated that Binance founder Changpeng Zhao intentionally violated the law to attract users and expand his company.
In a court filing on Tuesday, April 23, US prosecutors stated that Binance founder Changpeng Zhao should face 36 months in prison for allegedly violating anti-money laundering regulations (AML).
Zhao, who resigned as CEO of Binance in November, will reportedly appear in court on April 30 to receive his sentence.
Changpeng Zhao To Stake Out His Case
Per federal sentencing guidelines, CZ is subject to a maximum penitentiary term of 18 months.
According to reports, Zhao and his legal team have agreed not to contest any hearings that have reached that point.
The Binance founder is currently in the United States on a $175 million bond.
However, during the hearing at the U.S. district court for the western district of Washington, U.S. prosecutor said: “Given the magnitude of Zhao’s willful violation of U.S. law and its consequences, an above-guidelines sentence of 36 months is warranted.”
U.S. prosecutors additionally accused CZ of intentionally circumventing U.S. legislation.
Zhao and Binance, according to U.S. prosecutors, targeted U.S. users on purpose as part of Binance’s expansion strategy.
Despite knowing that this strategy rendered Binance liable to U.S. laws, the organization continued to operate in contempt of these regulations for a significant duration.
Zhao acknowledged that it was vital for Binance’s growth and profitability to disregard U.S. regulations.
Prosecutors noted in the filing that he boasted that compliance with U.S. law would have constrained Binance’s scale and revenue, including gains from the network effect, over the previous two years.
U.S. prosecutors assert that Zhao’s intentional violation of U.S. law was not the result of an oversight or error.
Conversely, it was a strategic business decision to entice clients, grow his enterprise, and personally benefit.
Binance Enabled Suspicious Transactions
As per U.S. authorities, prosecutors have charged Binance with failing to notify more than one hundred thousand suspicious transactions involving designated terrorist organizations, including Hamas, al-Qaeda, and ISIS.
Furthermore, there are allegations that Binance’s platform enabled the distribution of child sexual abuse materials for sale and had a substantial share of the ransomware earnings.
Zhao also referred to as CZ consented to the settlement by making a monetary payment of $50 million and severing his affiliation with Binance, the platform he founded in 2017.
A criminal fine of $1.81 billion and restitution obligations of $2.51 billion were among the sanctions imposed on Binance.
