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US demands 3 years in jail for Binance founder CZ

US demands 3 years in jail for Binance founder CZ

As the cryptocurrency industry in the United States continues to struggle under the intensified legal and regulatory pressure that has seen several of its largest participants facing lawsuits, the US Department of Justice (DOJ) has asked for a three-year sentence for Changpeng Zhao (‘CZ’), the founder of Binance.

Specifically, CZ, who stepped down as the CEO of Binance, one of the largest crypto exchanges in the world, and pleaded guilty to breaking the US anti-money laundering laws in November last year as part of a $4.3 billion settlement, could spend 36 months in jail, according to a sentencing memo from April 24.

Indeed, US prosecutors suggested this sentence to the court for the western district of Washington despite the fact that the federal sentencing advisory guidelines set a maximum sentence of 18 months for CZ, who agreed not to appeal against any stretch below this period.

Why the lengthened sentence?

According to the prosecutors, CZ’s alleged crimes, which they said include failure to report over 100,000 suspicious transactions with terrorist groups including Hamas, Al Qaeda, and ISIS, as well as the sale of child sexual abuse materials and ransomware deals, justify such a sentence:

“A custodial sentence of 36 months (…) would reflect the seriousness of the offense, promote respect for law, afford adequate deterrence, and be sufficient but not greater than necessary to achieve the goals of sentencing. (…) Given the magnitude of Zhao’s willful violation of US law and its consequences, an above-guidelines sentence of 36 months is warranted.”

Binance seeks probation instead

Not long after the DOJ filed the document, CZ’s own legal time submitted its own sentencing memo, arguing that such a prison sentence would be a precedent in a Bank Secrecy Act (BSA) case of a similar nature and that probation is preferable instead. As they explained:

“No defendant in a remotely similar BSA case has ever been sentenced to incarceration. Mr. Zhao should not be the first. Given the need to avoid unwarranted sentencing disparities, Mr. Zhao’s extraordinary acceptance of responsibility, his long history of philanthropy and community service, the five and a half months he has already spent away from his family since pleading guilty, and the collateral consequences of his conviction, Mr. Zhao respectfully requests that the Court sentence him to probation.”

Earlier this year, the US states of Florida and Alaska caved in under the regulatory pressure imposed on Binance.US, Binance’s subsidiary in the US, suspending its local license and preventing it from offering services to residents in these states any longer, as Finbold reported on January 26.

Meanwhile, the recent developments haven’t drastically impacted the price of the Binance ecosystem’s native crypto asset, Binance Coin (BNB), which is currently trading at $614.44, gaining 0.67% on the day, advancing 12.40% across the week and accumulating an increase of 4.42% over the past month.

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