Founder of the world’s largest cryptocurrency exchange faces up to 10 years in prison

Changpeng Zhao the former CEO of cryptocurrency exchange Binance, may be imprisoned for 10 years. This became known after the US Department of Justice filed the relevant documents with the court.

The Binance founder pleaded guilty to one count of violating the Bank Secrecy Act. This is due to Binance 's involvement in a global criminal campaign.

The company agreed to a historic fine of $ 4.3 billion, which is a new record in the history of the US Treasury Department and FinCEN. As part of the plea agreement, Binance has also committed to comply with a number of strict compliance, monitoring and cooperation requirements.

«In this regard, I am proud to note that in our resolutions with the US agencies, they do not allege that Binance misappropriated user funds, nor do they allege that Binance engaged in any market manipulation. The funds are SAFU ,» Zhao said.

Nevertheless, legal experts expect Zhao to be sentenced to 12−18 months in a minimum-security prison. Moreover, a recent submission by the Ministry of Justice emphasized the potential risk of Zhao’s escape, given his UAE citizenship and considerable wealth. That is why the Ministry of Justice is in favor of strict pre-sentence restrictions.

«If Mr. Zhao chooses not to return to the United States to serve an indefinite sentence, there is no reason to believe that the UAE will extradite him. The government respectfully requests that the court order Mr. Zhao to remain in the continental United States between his guilty plea and sentencing ,» the DOJ lawyers said.

Zhao’s trial is scheduled for February 23, 2024. The decision of Judge Richard A. Jones on Zhao’s ability to travel until sentencing will be crucial. While CZ’s legal team may push for a lighter sentence, the DOJ will likely seek a punishment that will serve as a deterrent to money laundering in the cryptocurrency world in the future.

As a reminder, on November 21, Binance agreed to pay $ 4.3 billion in favor of FinCEN and OFAC, Changpeng Zhao resigned as CEO and posted a $ 175 million bail to remain free. Crypto industry experts suggest that the fine could have been as high as $ 10 billion, and the crypto exchange could have faced charges of misappropriation of investor funds or market manipulation.