Former Binance chief, Changpeng Zhao is set to be sentenced in a US court Tuesday over money laundering charges, with federal prosecutors seeking a three-year prison term and a $50 million fine.
Zhao, a Canadian national resigned from his position at the world’s largest cryptocurrency exchange platform late last year as part of a deal with US authorities as Binance agreed to pay a record $4.3 billion to settle charges in February.
Prosecutors alleged that Binance failed to prevent transactions by terrorist groups, including the Islamic State, al-Qaeda, and Hamas, due to Zhao’s “business decision” thus violating the US anti-money laundering laws.
Defense attorneys argue that probation is sufficient, citing Zhao’s acceptance of responsibility and philanthropic record. In a social media post, Zhao acknowledged his mistakes and took responsibility.
The case marks a significant crackdown on the cryptocurrency industry, which has faced intense scrutiny following a series of scandals and market collapses.
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Meanwhile, Binance’s new CEO, Richard Teng, claims the company is working closely with regulators and has spent hundreds of millions on compliance.
The sentencing will set a precedent for the industry, with the Justice Department seeking a strong message to be sent to Zhao and others.
However, the outcome will be closely watched by the crypto community and regulators worldwide.
