The U.S. Department of Justice (DOJ) has formally recommended a sentence of three years in prison for Changpeng Zhao, commonly known as CZ, the former CEO of cryptocurrency exchange Binance. The DOJ's recommendation was outlined in a memorandum submitted to the court, where prosecutors also requested a substantial fine of $50 million against Zhao.
According to the memorandum, the severity of Zhao's misconduct, which involved deliberate breaches of U.S. law, justifies the proposed penalties. "Given the scale of the intentional violations and their repercussions, a 36-month [three-year] prison term is warranted," the memorandum states.
The document further explains that such a sentence would serve as a deterrent not only to Zhao but also globally, emphasizing that the hefty fine reflects the significant profit Zhao reaped from his crimes. The intention is not merely to punish CZ but also to dissuade others tempted to build business empires by flouting American regulations.
Initially, CZ faced a potential 18-month prison term, which was later confirmed by the DOJ in their plea, noting that the recommended sentence for such charges typically ranges from 12 to 18 months. However, given the gravity of Zhao's actions, the prosecution believes a longer sentence is necessary.
Changpeng Zhao had previously pleaded guilty to aiding and abetting money laundering through Binance and stepped down from his role as CEO in the fall of 2023. He was released on a $175 million bail, although he is restricted from leaving the United States. His final sentencing is tentatively scheduled for April 30, 2024.
Yi He, a co-founder of Binance and reported to be in a relationship with Zhao, has stated that he remains positive ahead of the trial.
