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SEC defendant Zhao facing three-year sentence

2024-04-24 19:57 ET - Street Wire

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by Mike Caswell

Seattle prosecutors have requested a three-year prison term for Changpeng Zhao, a Canadian billionaire who pleaded guilty to charges arising from a cryptocurrency exchange called Binance. They say that Mr. Zhao and Binance knowingly violated rules meant to prevent money laundering, with the transactions at issue including $898-million sent to Iran. (All figures are in U.S. dollars.) Binance operated on a "Wild West model" that made Mr. Zhao one of the richest people in the world, prosecutors claim.

The request from prosecutors comes as part of a case in which they cited Mr. Zhao for violations of the Bank Secrecy Act. They said that Mr. Zhao ran Binance, the world's largest cryptocurrency exchange, as it facilitated the transfer of trillions of dollars worldwide. In doing so, his business deliberately violated U.S. laws, which was "critical to the company's success and profitability."

Mr. Zhao pleaded guilty on Nov. 21, 2023, leaving his sentencing as the largest remaining matter in the case. To that end, prosecutors filed a memorandum on Tuesday, April 23, in which they requested the three-year term. They say that Mr. Zhao violated U.S. law "on an unprecedented scale." He allowed Binance, the operation that he founded in 2017, to grow into a massive business without taking appropriate steps to monitor customers who could be violating U.S. laws.

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