US prosecutors have recommended a 36-month prison term for Changpeng Zhao, Binance’s former CEO, doubling the advisory guidelines, citing the gravity of the charges against him.
The proposal, detailed in a filing with the Western District Court of Washington, underscores the severity of accusations against Zhao, who resigned last November as part of a plea deal with the US Department of Justice.
The prosecutors assert that a three-year custodial sentence is essential to emphasize the seriousness of the charges, including allegations of neglecting anti-money laundering protocols mandated by the Bank Secrecy Act.
They highlight Zhao’s alleged involvement in permitting Binance to facilitate transactions associated with illegal activities, including those from sanctioned nations.
This development unfolds against a backdrop of mounting legal woes for Binance, as the exchange contends with lawsuits from the US Securities and Exchange Commission and the Commodity Futures Trading Commission.
Accusations range from mishandling client funds to operating an unlawful, unregistered exchange in the US. Authorities have imposed substantial fines on Binance, with Zhao agreeing to a $50 million penalty as part of his plea agreement.
However, he has remained silent on recent developments. Zhao’s formal sentencing is slated for April 30.
In January, a federal judge denied Zhao’s request to travel to the United Arab Emirates for a family emergency, deeming him a significant flight risk due to his considerable wealth and ties to the UAE.
Despite offering his $4.5 billion equity in Binance as security for his return, the judge rejected the plea.
Last November, Zhao pleaded guilty in a Seattle federal court to failing to uphold an effective anti-money laundering program at Binance, with the exchange agreeing to pay $4.3 billion in penalties.
In a letter to Judge Richard Jones dated December 22, Zhao’s legal team sought permission for him to travel to Abu Dhabi on January 4 for one to four weeks due to a family emergency.
However, federal prosecutors did not approve Zhao’s request, leading to a hearing on December 29, during which Judge Jones denied the travel request.