The U.S. Department of Justice (DoJ) has argued that fomer Binance CEO Changpeng 'CZ' Zhao should spend three years in jail over money laundering charges, ahead of his sentencing on April 30.
According to a sentencing memo filed Tuesday, lawyers for the Department of Justice recommend that the court "impose an above-Guidelines sentence of 36 months of imprisonment," citing Zhao's "willful violation of U.S. law."
The former Binance CEO had gambled "that he would not get caught, and that if he did, the consequences would not be as serious as the crime," the DoJ's lawyers argued, and that Binance's "Wild West" strategy of failing to comply with U.S. anti-money-laundering requirements had made Zhao "one of richest people in the world and a celebrity in the crypto industry."
The 36-month sentencing recommendation goes over and above federal sentencing guidelines that would have seen the former Binance CEO jailed for 18 months. In recommending a harsher-than-expected sentence, the DoJ said that Zhao's sentencing would "not just send a message to Zhao but also to the world," acting as a deterrent to others.
Under Zhao's leadership, Binance rose to become the biggest cryptocurrency exchange in the world by volume. In November 2023, he stepped down as CEO of Binance after pleading guilty to U.S. money laundering and sanctions violations as part of a settlement with the DoJ. Under the terms of the settlement, Binance was ordered to pay $4.3 billion in penalties and to ‘completely exit’ the United States.
Zhao himself was also ordered to pay $50 million in fines under the terms of his plea agreement, and prohibited from any involvement with Binance for at least three years.
Ahead of his sentencing at the end of the month, Zhao was placed on a $175 million bond. U.S. District Judge Richard Jones imposed travel restrictions on the former Binance CEO, preventing him from leaving the United States after prosecutors deemed him a flight risk.
The exchange still faces an ongoing lawsuit from the U.S. Securities and Exchange Commission (SEC), which it pushed to have dismissed in a series of filings in December.