Apr 24, 2024 - Economy

DOJ requests 36 months for Binance founder Changpeng Zhao

A photo of CZ waiting to speak at a conference, wearing his Binance shirt.

Binance founder Changpeng "CZ" Zhao at WebSummit in 2022. Photo: Horacio Villalobos/Getty

Changpeng Zhao (CZ), the founder of Binance, the world's largest crypto exchange, will be sentenced next week in federal court in Seattle, and the government is looking for more prison time than originally thought.

Why it matters: CZ is the biggest fish in the relatively young industry of cryptocurrency, until recently running the largest and most far-reaching venue for trading, launching and making bets on digital assets.

The latest: The government Tuesday asked the court to give Zhao three years in prison at the April 30 sentencing.

  • Previous reports, citing federal sentencing guidelines, had indicated he was facing a max of 18 months — though DOJ officials from the beginning signaled they could ask for more.

Zhao pled guilty late last year to one count of violating the Bank Secrecy Act, for failing to implement an effective anti-money laundering (AML) program at Binance.

  • The guilty plea was part of a $4.3 billion settlement agreement involving U.S. criminal and civil charges against him and his company. He also agreed to step down as CEO.

What they're saying: "Zhao's willful violation of U.S. law was no accident or oversight. He made a business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets," U.S. attorney Tessa Gorman, and others, wrote in their letter filed to the court Tuesday ahead of his sentencing.

  • They noted up top that Binance had a culture of asking for forgiveness rather than asking for permission.

The other side: In his own letter to the court, Zhao apologized, and seemed to ask for more forgiveness. "There is no excuse for my failure to establish the necessary compliance controls at Binance," he wrote.

  • But he also noted his voluntary surrender in the case. "I want to make things right, close the chapter, turn the page, and focus on the next chapter of my life."
  • His letter was accompanied by 161 letters of support from various people, including family and friends.

What's next: Sentencing in Seattle.

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