Binance Founder Changpeng Zhao Faces 3 Years in Prison

Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, faces three years in prison after pleading guilty to breaking anti-money laundering rules, US authorities announced on Tuesday.

Zhao, who is scheduled to be sentenced in Seattle on April 30, stepped down as Binance’s CEO in November, when he and the exchange acknowledged to the offenses and agreed to a $4.32 billion penalty.

“Given the magnitude of Zhao’s willful violation of US law and its consequences, an above-guidelines sentence of 36 months is warranted,” US prosecutors told the US District Court for the Western District of Washington.

Zhao’s maximum punishment under federal sentencing guidelines is 18 months in jail, and he has agreed not to appeal any sentence up to that period. He’s been free in the United States on a $175 million bond.

US authorities claim Binance failed to report over 100,000 suspicious transactions with recognized terrorist groups such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria, or ISIS.

Zhao and Binance Fined

Prosecutors claimed Binance’s platform also enabled the selling of child sexual abuse materials and received a major amount of ransomware proceeds. Zhao, a Chinese-born Canadian businessman, has agreed to pay $50 million and leave Binance, which he started in 2017.

The penalty for Binance includes a $1.81 billion criminal penalties and $2.51 billion in restitution.

Binance, the world’s largest cryptocurrency exchange, recently suspended certain trading services for US consumers. The action comes amid increased regulatory scrutiny of the cryptocurrency industry.

Binance discontinued futures, derivatives, and staking products for American users. It’s a huge adjustment that restricts trading options.

U.S. officials have increased enforcement proceedings against cryptocurrency platforms. The SEC and CFTC are cracking down on exchanges that operate without proper registration.

Banned in Thailand

Binance faced investigations into its activities and decided that restricting certain offers was the best way ahead.

For US users, the exchange still permits spot cryptocurrency trading. However, the derivatives ban is a severe blow. Binance established a big futures trading company that American traders may no longer access.

Critics believe that Binance should have sought regulatory authority before swiftly extending its services abroad. Some interpret the action as Binance taking measures toward compliance. Others believe it is due to pressure on the exchange to forsake critical revenue streams.

In any case, it is a significant step that changes the landscape for crypto dealers in the United States.

In April 2023, Thailand banned Binance cryptocurrency exchange. The Securities and Exchange Commission (SEC) has filed a criminal complaint against the corporation for operating a digital asset business without a license.

Binance has paused services for Thai consumers and restricted access to its platform within Thailand. The move highlighted the continued regulatory problems that crypto businesses face around the world as authorities work to establish supervision and protect investors.