NEW YORK – Zhao Changpeng, the founder of Binance, the world’s largest cryptocurrency exchange, should serve 36 months in prison after pleading guilty to violating laws against money laundering, US prosecutors said in a court filing on April 23.

Zhao, who is expected to be sentenced on April 30 in Seattle, stepped down as Binance’s chief in November, when he and the exchange admitted to the violation, and the firm agreed to a penalty of US$4.32 billion (S$5.88 billion).

“Given the magnitude of Zhao’s wilful violation of US law and its consequences, an above-guidelines sentence of 36 months is warranted,” prosecutors told the US District Court for the Western District of Washington.

Federal sentencing guidelines set a maximum sentence of 18 months in prison for Zhao, who agreed not to appeal against any stretch up to that length. He has been free in the US on a US$175 million bond.

The US authorities have said Binance failed to report more than 100,000 suspicious transactions with designated terrorist groups, including Hamas, Al-Qaeda and ISIS.

Prosecutors said Binance’s platform also supported the sale of child sexual abuse materials and was a recipient of a large portion of ransomware proceeds.

Zhao, commonly known as CZ, agreed to pay US$50 million and cease involvement with Binance, which he founded in 2017.

Binance’s penalty comprised a US$1.81 billion criminal fine and restitution of US$2.51 billion. REUTERS