The U.S. Department of Justice recommends that Changpeng Zhao's sentence for violating the Bank Secrecy Act be increased to 36 months in prison and a $50 million fine.
In a document on the case against the Binance founder, the US Department of Justice has recommended a prison sentence of 36 months, double the amount recommended by the judicial system.
Zhao, founder of the cryptocurrency exchange, pleaded guilty to violating the Bank Secrecy Act (BSA) by failing to implement an effective anti-money laundering program on his crypto exchange.
Despite his guilty plea, however, the DOJ is calling for Zhao to receive a harsher sentence because he chose to violate U.S. regulations by deliberately targeting U.S. citizens even though he was not licensed to do so.
“It is better to ask for forgiveness than permission.” That is what defendant Changpeng Zhao, founder, owner and CEO of Binance, the world’s largest (cryptocurrency) exchange, told his team members about Binance’s compliance with US law., the DOJ stressed in a document.
In addition to seeking a 36-month prison sentence, the DOJ is agreeing to a $50 million fine, which the agency says reflects the severity of Zhao’s violations. By doing so, the department is seeking to send a clear message about the consequences of violating financial regulations in the country and to underscore the importance of complying with money laundering laws in the emerging cryptocurrency industry.
The case against Binance and Changpeng Zhao
Zhao pleaded guilty to violating the Bank Secrecy Act in November last year, acknowledging that he had prioritized his company's growth and profits over compliance with U.S. laws. This led the company to agree to pay $4,3 billion in fines and commit to improving compliance.
The charges against Zhao and Binance also include operating unregistered exchanges, broker-dealers, and clearing agencies, misrepresenting trading controls and oversight on the Binance US platform, and unregistered securities offering. These charges reflect the growing regulatory pressure the United States is putting on cryptocurrency operations and the importance of complying with established financial regulations.
Prison conditions could get tougher for Zhao
While the defense is asking for probation for Zhao, the recommendation to increase Zhao's prison sentence from 18 months to 3 years is a reflection of the seriousness with which the Justice Department is treating the case.
The final decision on The sentence is expected for the hearing scheduled for April 30..
However, the situation of Binance and its founder illustrates how the cryptocurrency industry is undergoing a fairly significant regulatory transformation, marked by increased scrutiny from entities such as the Department of Justice.
Recently, this department demanded the founders of Samourai Wallet, after being arrested and charged with money laundering and unlicensed money transmission offenses.
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