According to recent court documents by the US Department of Justice (DOJ), Ex-Binance Chief Changpeng Zhao could spend up to ten years in prison. Zhao entered a guilty plea to breaking the Bank Secrecy Act.

According to the DOJ, Binance was a part of a large-scale international criminal organization. Binance agreed to a hefty $4.3 billion punishment in a historic act that will go down in the records of FinCEN and the US Treasury. Additionally, as part of a plea agreement, Binance committed to a thorough set of compliance, monitoring, and collaboration measures.

Although Zhao claims that Binance has not been accused of misappropriating user funds or manipulating the market in the resolutions with US agencies, legal experts predict that the former CEO will spend 12 to 18 months in minimum-security jail. The most recent DOJ complaint again highlighted concerns over Zhao’s possible flight risk, which mentioned his enormous wealth and UAE citizenship.

DOJ Is Concerned About Changpeng Zhao Running Away to the UAE

Ex-Binance Chief Changpeng Zhao Could Spend Up To 10 Years in Prison

In support of stringent pre-sentencing guidelines, the DOJ notes that the US may argue for a sentence of up to the statutory maximum of 10 years.

The DOJ attorneys are asking the court to order Zhao to remain in the continental United States pending his plea and sentencing to reduce the possibility of his escape. They are raising concerns about the UAE’s potential unwillingness to extradite Zhao if he does not return.

The DOJ’s stance aligns with a contentious ruling made by Magistrate Judge Brian Tsuchida, who permitted Changpeng Zhao to live in the United Arab Emirates up to two weeks before his sentencing.

Judge Tsuchida emphasized that Zhao’s actions were more significant than worries, pointing out that Zhao did not need to travel to the US but decided to avoid it.

Zhao’s voluntary surrender, his desire to settle the case, and the high bail amount that was suggested led the judge to conclude that Zhao did not represent a flight risk, even while living in the United Arab Emirates.

But the DOJ voiced its dissatisfaction, highlighting how peculiar it was to allow a wealthy defendant to go to jail while living in a nation that does not export much and offers much freedom.

Further Complications for The Ex-Binance Chief

Ex-Binance Chief Changpeng Zhao Could Spend Up To 10 Years in Prison

Binance’s serious infractions, including its refusal to stop transactions with terrorists and other criminals, further complicate Zhao’s case. The DOJ linked Binance’s activities to acts of mass destruction and accused Zhao of aiding and abetting horrific crimes.

Zhao’s sentencing hearing is set for February 23, 2024, pending Judge Richard A. Jones’ critical determination about Zhao’s pre-sentencing travel plans.

The DOJ will likely seek a sentence that acts as a deterrent against future cryptocurrency-related money laundering, even though Zhao’s legal team may push for leniency.

John Reed Stark, a former SEC employee, voiced concerns, saying that the plea agreement might backfire on the DOJ if Zhao doesn’t cooperate, breaks the terms of the deal, or does anything to upset the plea bargain. He also suggested that Zhao might take action to prevent future money laundering in the crypto world.

The potential ten-year prison sentence for Changpeng Zhao, the former head of Binance, indicates severe legal challenges. The outcome will depend on the specific charges and legal proceedings, shaping the future for Zhao and the cryptocurrency exchange industry.