The Department of Justice (DoJ) argues that the scale and consequences of Zhao’s misconduct warrant a longer sentence. The memorandum submitted to the court in the Western District of Washington argues that Zhao should incur a more severe penalty to reflect the gravity of his offenses.
The DOJ’s filing echoes its previous arguments against Binance and Zhao, citing the exchange’s operations within the U.S. and CZ’s knowledge of Binance’s violations of the law.
Prosecutors claim that Zhao’s violations of U.S. law occurred on an “unprecedented scale” and highlighted his “deliberate disregard” for Binance’s legal obligations, operating under a “Wild West” model.
“A custodial sentence of 36 months—twice the high end of the Guidelines range—would reflect the seriousness of the offense, promote respect for law, afford adequate deterrence, and be sufficient but not greater than necessary to achieve the goals of sentencing,” the filing further reads.
While the sentencing guidelines recommend 12 to 18 months, the DOJ says that Zhao’s actions, particularly his failure to implement an anti-money laundering program, warrant a harsher punishment. The memorandum criticizes the Sentencing Guidelines for inadequately addressing misconduct of this scale and its impact on U.S. national security.
Although Zhao has already agreed to pay a $50 million fine and waived the right to appeal any sentence up to 18 months, the DOJ is pushing for the longer prison term. Meanwhile, Zhao’s defense team argues that no defendant in a similar Bank Secrecy Act (BSA) case has received a prison sentence and proposes probation as an alternative, possibly including home confinement.
According to Zhao’s defense filing, he was never explicitly informed of specific transactions on Binance involving criminal funds, and he did not have knowledge of them.
Zhao stepped down as CEO of Binance in November 2023 following his guilty plea, and Richard Teng took over as CEO. The sentencing for Zhao’s case remains pending.
Source: Cryptocurrency - investing.com
