Binance’s CEO Zhao faces sentencing over money laundering violations

NEW YORK: The former chief executive of Binance, the world’s largest cryptocurrency exchange, could face years in prison when he is sentenced on Tuesday after his guilty plea to violating US money-laundering laws.

US prosecutors have told District Judge Richard Jones in Seattle that they want Changpeng Zhao, who goes by “CZ,” to serve twice the maximum 18 months recommended under federal guidelines.

Prosecutors said a tough sentence for the man once considered the most powerful person in the crypto industry would send a message that “the right choice, every time, is to comply with the law.”

The sentencing hearing began at about 9:40 a.m. PDT (1640 GMT).

Robert Fisher, a partner at Nixon Peabody in Boston and a former federal prosecutor, said he was surprised prosecutors wanted a stiff sentence despite Zhao’s plea, but suggested they might be trying to set an example given Zhao’s high profile.

“It’s unusual to ask for this much time above sentencing guidelines,” Fisher said. “They want this to serve as a deterrent.”

Lawyers for Zhao requested probation, citing his “unflinching” acceptance of responsibility, and his having already paid a $50 million criminal fine. They also said Zhao had not committed a crime before, and no defendant in a remotely similar case has been imprisoned.

“It’s always the case the government asks for more than they think they’ll get ... but going that much above guidelines for a pleader is unusually aggressive,” said Robert Frenchman, an attorney who focuses on white-collar crime and has defended clients against government prosecutions.

Zhao would be the second major crypto boss to go to prison, after Sam Bankman-Fried was sentenced last month to 25 years for stealing $8 billion from customers of FTX, his now-bankrupt cryptocurrency exchange.