Key takeaways:
- Before his sentencing on February 23, 2024, Binance founder Changpeng “CZ” Zhao will pay a $175 million release bail and consent to return to the United States for 14 days.
- CZ plans to enter a guilty plea to multiple charges brought against him by the DOJ.
Before his sentencing on February 23, 2024, Binance founder Changpeng “CZ” Zhao will pay a $175 million release bail and consent to return to the United States for 14 days; this could allow him to return to Dubai.
CZ has officially announced his plan to step down as CEO of his cryptocurrency exchange, ahead of the US Department of Justice (DOJ) announcing that it has negotiated a $4.3 billion settlement with the company.
CZ plans to enter a guilty plea to multiple charges brought against him by the DOJ. His scheduled court appearance and plea hearing is set for November 21 in Seattle federal court.
Additionally, he will enter a guilty plea to “a criminal charge” related to violating laws against money laundering, the report claims.
Notwithstanding his inability to hold an executive role at Binance as a result of the plea deal, CZ is expected to avoid jail time by maintaining his controlling stake in the business.
Since the plea agreement excludes a settlement for the lawsuit the SEC filed against Binance in June, it has no bearing on the ongoing legal proceedings.
Attorney General Merrick Garland revealed in a press meeting on November 21 that CZ, despite living abroad, filed his plea in person in a US federal court.
The $4.3 billion settlement with Binance and CZ, he claimed, would cover “civil regulatory enforcement actions” by government agencies like the US Treasury and the Commodity Futures Trading Commission (CFTC).
Garland claims that Binance’s regulations made it possible for criminals engaged in illegal activity to transfer “stolen funds” through the exchange. He claimed that by providing ways for some customers to access Binance despite their connections to unlawful funds, the exchange “pretended to comply” with federal laws in the United States.
The attorney general stated that the exchange will have to notify any suspicious activity related to past transactions, be watched over, and provide reports.
Following Garland, Treasury Secretary Janet Yellen announced that, as part of the settlement, Binance would pay fines totaling more than $3.4 billion to the Financial Crimes Enforcement Network and more than $1 billion to the Treasury’s Office of Foreign Assets Control.
According to CFTC Chairwoman Rostin Behnam, the proposed settlement calls for Binance to pay $2.7 billion in civil monetary penalties and disgorgement, CZ to pay $150 million, and former compliance chief Samuel Lin to pay $1.5 million. About $1.8 billion will be provided by the Justice Department in relation to the latter resolutions.
Zhao consented to disclose to the court where he would live in a bail application filed in a federal court in Seattle on November 21. He also agreed that if Zhao missed his scheduled court appearance, a warrant for his arrest might be issued. Missing court dates carries a maximum punishment of 10 years in prison and a fine of $250,000.
Should Zhao break the conditions of the arrangement, he would forfeit the $15 million he put into a trust account maintained separate from his bond. Two guarantors who will provide contributions of $100,000 and $250,000, respectively, are also named.
It is expected that the US will examine Zhao’s bail judgment. The order will take effect on November 27 at 5 pm Washington time if the judge chooses not to revisit it. If the judge permits a review before that date, Zhao must stay in the US until a determination is reached.
Zhao has spent a number of years stationed in Dubai, despite the lack of an extradition agreement between the US and the UAE. A bilateral agreement was signed on February 24 to improve collaboration between the two countries law enforcement agencies.
