The US demands a 36-month prison sentence for ex-Binance CEO Changpeng Zhao

U.S. prosecutors are seeking a 36-month prison sentence for the former CEO of cryptocurrency exchange Binance on charges of facilitating money laundering, according to a sentencing memorandum published late Tuesday.

The memorandum, filed in the U.S. District Court for the Western District of Washington, states that Zhao should serve a longer sentence, which the advisory guidelines say “reflects the seriousness of his crimes.”

Under advisory guidelines, Zhao’s sentence would range from 12 to 18 months in prison.

“A custodial sentence of 36 months – twice the high limit of the guidelines – would reflect the seriousness of the crime, promote respect for the law, provide sufficient deterrence and be sufficient, but not greater, than necessary to achieve the objectives of sentencing . US prosecutors said.

Zhao is accused of willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act, and of effectively allowing Binance to process transactions involving proceeds from unlawful activities, including transactions between Americans and individuals in sanctioning jurisdictions.

Binance has been separately sued by the US Securities and Exchange Commission and the Commodity Futures Trading Commission for allegedly misusing customer assets and operating an illegal, unregistered exchange in the US.

The US, which separately accuses Binance and Zhao of violating the US Bank Secrecy Act and sanctions against Iran, has ordered Binance to pay $4.3 billion in fines and forfeitures. Zhao agreed to pay a $50 million fine.

Zhao resigned as CEO of Binance in November last year after reaching this plea and was replaced by former Abu Dhabi market regulator chief Richard Teng.

Zhao was not immediately available for comment when contacted via social media platform X. Binance did not return a request for comment when contacted by CNBC.

Prosecutors say Zhao violated U.S. law on an “unprecedented scale” and that he “willfully ignored Binance’s legal responsibilities.”

In Tuesday’s memorandum, prosecutors said Binance, under Zhao’s control, operated under a “Wild West” model.

“Zhao bet that he would not get caught, and that if he did, the consequences would not be as serious as the crime,” the memorandum said.

“But Zhao was caught and now the Court will decide what price Zhao must pay for his crimes.”

Zhao’s official sentencing is expected to take place on April 30.