Key Points
- Although the DOJ wants Changpeng Zhao to serve 3 years in jail, his defense pushes back.
- Attorneys state that CZ was never “explicitly informed” about the specific suspicious Binance transactions.
Earlier today, it’s been reported that the US prosecutors want Binance’s founder, Changpeng Zhao, to serve 3 years in jail after pleading guilty to violating laws against money laundering.
According to the same reports, CZ is reportedly expecting his sentence on April 30 in Seattle.
Now, new reports reveal that CZ’s defense is pushing back, stating in a new filing that he was never “explicitly informed” of specific transactions on Binance that were suspicious and allegedly related to criminal funds.
Binance was not prohibited to have users from US-sanctioned countries
According to the filing, although Probation references a conversation in which Binance’s chief compliance officer warned CZ that there were users from sanctioned countries on the exchange, the reality is that Binance, as a non-US company, was not prohibited from having users from US-sanctioned countries on the platform.
The reports also note that the sanctions charge to which the company had pleaded guilty is a new and narrow one that is applied for the first time against Binance. It states that an algorithmic matching engine violates the US sanctions law by “randomly pairing users in sanctioned countries with users in the United States.”
The defense says that Zhao does not pose any risk of recidivism and he should be sentenced to probation instead of prison.
The DOJ’s filing noted that because Zhao failed to implement an effective AML program at the exchange, illicit actors have used it in various ways.
CZ was originally set to be sentenced in late February, but the hearing was postponed by mutual agreement to April 30. He was not able to return to Dubai, where his partner and some of his children live, since he first appeared in federal court in Seattle, Washington, in 2023.
Also, he recently had to give up voting control in the Dubai local entity, so that Binance could receive a full crypto license there.