Binance`s former chief faces sentencing in US court amid money laundering charges

US federal prosecutors are pushing for ex-Binance chief Changpeng Zhao to face imprisonment as he heads to court for sentencing on money laundering charges.

According to investigations conducted by two Treasury agencies, Binance, under Zhao's leadership, allegedly failed to prevent transactions linked to entities such as the Islamic State group, al-Qaeda, and the armed wing of Hamas.

This revelation prompted Zhao's resignation from his post late last year as part of a deal with US authorities, while Binance agreed to a hefty $4.3 billion settlement in February.

Prosecutors are urging the judge to impose a $50 million fine on Zhao and sentence him to three years in prison, a move that deviates from the typical probation outcome for such offences.

In a court filing, Justice Department lawyers accused Zhao of prioritizing business gains over compliance with US laws.

“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” he said.

In response, Zhao's attorneys argued for probation.

Zhao expressed remorse in a social media post in November, saying, “I made mistakes, and I must take responsibility."

Although he resides in the United Arab Emirates, Zhao's legal battles in the US continue to draw global attention.

Binance, founded in 2017 by Zhao, quickly ascended to dominance in the cryptocurrency trading sphere, transforming him into a billionaire.

However, during regulatory crackdowns and market volatility, Binance faced challenges, including relocating its operations from China and weathering the fallout from the collapse of rival exchange FTX in November 2022.

While the cryptocurrency industry experienced a surge in valuation in 2021, recent months have seen a revival fuelled by regulatory approvals for bitcoin exchange-traded funds (ETFs) in the US.

Binance's new CEO, Richard Teng, said that the company was committed to compliance, disclosing investments in regulatory adherence.

(With inputs from AFP)