U.S. prosecutors have escalated their legal battle against Binance founder Changpeng Zhao (CZ), seeking a three-year prison sentence for alleged regulatory violations.
According to a court filing on April 23, U.S. prosecutors are saying that Binance founder Zhao be sentenced to 36 months in prison after he pleaded guilty to violating laws against money laundering.
CZ Pleads Guilty to Money Laundering Charges
Zhao pleaded guilty to breaching U.S. money laundering regulations and resigned as Binance CEO in November 2023. He was personally fined $50 million, and Binance faced even larger penalties.
“Given the magnitude of Zhao’s willful violation of U.S. law and its consequences, an above-guideline sentence of 36 months is warranted,” the prosecutors wrote in the filing to the U.S. district court for the Western District of Washington.
The filing added, “That sentence, together with the agreed $50 million fine, is sufficient but not greater than necessary to balance the relevant 18 U.S.C. § 3553(a) factors and achieve the goals of sentencing.”
Prosecutors argue that as the former face of Binance and its top executive, CZ should directly bear responsibility for the company’s regulatory failures.
Online reports state that federal guidelines set CZ’s prison term at 18 months. He agreed not to appeal any sentence up to this maximum. The former CEO remains accessible in the U.S. on a $175 million fine.
Binance Pays Fine To Continue Its Operations
Following Zhao’s admission of violating U.S. money laundering laws, he and Binance agreed to settle the criminal case by paying $4.3 billion as fine. Binance can continue its operations under U.S. law compliance as part of the agreement.
Despite facing prison time and stepping down as Binance CEO, CZ remains active in the crypto industry. He announced a new educational project focused on crypto and blockchain in March. Zhao emphasized that the initiative will not involve creating new tokens.
Giggle Academy, the project is specifically tailored for a younger audience or targeting two- to three-year-olds, according to an X post by CZ on April 18.
CZ unveiled the logo of his new educational project on April 24. He noted that the Giggle Academy logo aims to reflect youth, fun, positive energy, and growth while also paying respect to the heritage of Binance.