Former crypto tycoon Chao Changpeng could soon be in the same cell as FTX fraudster Sam Bankman Freed, and if federal authorities have their way, it could be the same for three years.
US prosecutors recommend a sentence of 36 months in prison for the disgraced Binance chief after the founder of the world’s largest cryptocurrency exchange pleads guilty to money laundering charges. .
In a sentencing memo filed late Tuesday in the Western District of Washington court, prosecutors asked for a longer sentence to “reflect the seriousness of his crimes.” CNBC report.
Mr. Zhao, who called Bankman Freed a “liar” and claimed he intentionally misappropriated customers’ funds, still received a much shorter sentence than the 25-year prison sentence given to his rival for the FTX fraud. Dew.
U.S. authorities said Binance and Chao, who is also a Canadian citizen, failed to report more than 100,000 suspicious transactions with designated terrorist organizations, including Hamas, al-Qaeda, and the Islamic State of Iraq and Syria (ISIS).
According to a CNBC report, they called the company’s operations under Zhao’s rule “the Wild West,” saying that Binance had violated U.S. law on an “unprecedented scale” and that the company’s legal liability had been “intentionally compromised.” “I ignored it,” he added.
Prosecutors said the Binance platform also facilitated the sale of child sexual abuse material and received the bulk of the ransomware proceeds.
As a result, “a 36-month custodial sentence, which is twice the upper limit of the guideline range, reflects the seriousness of the crime, promotes respect for the law, provides sufficient deterrence, and is sufficient to achieve the goal.” “There is a potential sentence that will be sufficient, but no more than necessary,” U.S. prosecutors said.
“Mr. Zhao bet that he would not be caught, and that even if he was caught, the consequences would not be as serious as the crime. However, Mr. Zhao was arrested, and the court decided what price Mr. Zhao would pay for his crime. You will have to decide what to do.”
Chao, 47, was released on $175 million bail and was barred by a federal judge late last year from leaving the United States without returning to the United Arab Emirates, where he is a citizen.
He is scheduled to be sentenced on April 30 in Seattle.
Zhao had agreed not to appeal any extension of his sentence up to the 18-month maximum under the federal sentencing guidelines.
He resigned as head of Binance last November, and he and the exchange acknowledged the violations and the company agreed to pay a $4.32 billion fine.
Chao also agreed to pay $50 million at the time to end his involvement with Binance, which he founded in 2017.
Meanwhile, the fines against virtual currency companies include $1.81 billion in criminal fines and $2.51 billion in restitution.
Zhao, commonly known as “CZ” in the crypto world, was the architect of FTX’s dramatic collapse.
Binance was reportedly in talks to acquire FTX prior to its surprising blowout in November 2022, but has since upped its stake in FTT, the digital asset created by FTX, and sold it to customers. were desperately seeking to withdraw their deposits, causing a $6 billion run on cryptocurrency exchanges.
Bankman Freed quickly found itself in trouble after it was discovered that FTX was using its sister investment firm, Alameda Research, to place customer deposits in risky bets.
Reuters
“It was immediately clear that there had been misappropriation of user funds. User funds were gone,” Chao told CNBC shortly after Bankman Freed’s fraud was discovered in late 2022.
“He’s probably been doing this for quite a while, but no one knew about it until recently,” Zhao said.
Mr. Bankman Fried, 32, is being held at the Metropolitan Detention Center in Brooklyn until he is transferred to a federal prison, likely near his parents’ home in California.
with post wire
