Changpeng Zhao, the founder of the world’s largest cryptocurrency exchange, Binance, is facing the possibility of a three-year jail term after pleading guilty to money laundering charges. U.S. prosecutors are seeking this sentence for the tech tycoon.
The prosecutors argue that Binance operated on a “wild west” model under Zhao’s leadership, failing to report more than 100,000 suspicious transactions due to poor internal controls. These suspect trades included transactions with designated terrorist groups such as Hamas, al-Qaida, and Isis. Zhao’s willful violation of U.S. law was not accidental; he made a business decision to violate the law in order to attract users, build his company, and line his pockets.
Zhao stepped down as the chief executive of Binance in November after admitting to breaking U.S. anti-money laundering laws. The company agreed to pay a financial penalty of $4.3 billion while Zhao himself was fined $50 million. Despite the fine, Zhao’s fortune as the owner of a cornerstone of the $2.5 trillion cryptocurrency market remains intact. According to the Bloomberg billionaires index, Zhao is worth $41.6 billion and is currently the 29th richest person in the world.
In a letter to the judge overseeing the case, Zhao apologized for his actions, acknowledging that there was “no excuse” for his failure to implement effective compliance controls at Binance. He expressed his intention to spend a “significant portion” of his time in the future helping young people in as many places as possible.
