May 23, 2024
Binance's Founder CZ Walks Free on $175 Million Bond Amid Legal Drama
Policy & Regulation

Binance’s Founder CZ Walks Free on $175 Million Bond Amid Legal Drama

Binance founder and former CEO Changpeng “CZ” Zhao has been released from custody on a $175 million personal recognizance bond, marking a significant development in the legal proceedings against him. Zhao recently pleaded guilty to violating the Bank Secrecy Act, an allegation that stemmed from the accusation that he directed Binance to permit U.S. customers to use the platform without conducting proper know-your-customer or anti-money laundering checks.

The conditions of Zhao’s release involve posting $15 million held in a trust account by Davis Wright Tremaine, in addition to agreeing to forfeit funds if he violates the terms of his release. The release also mandates two guarantors, who have pledged $250,000 and $100,000, respectively. A sentencing hearing is scheduled for Feb. 23, 2024, at 9 a.m. Pacific Time.

Zhao’s release comes with standard provisions, including refraining from breaking the law, tampering with witnesses or victims, and avoiding non-prescribed controlled substances. Notably, the order seems to allow Zhao to leave the U.S., requiring his return 14 days before sentencing. However, federal prosecutors expressed their intention to appeal this provision to a higher-ranking judge during a hearing earlier on Tuesday.

As part of the plea agreement, Zhao has agreed to remain in the Seattle area until Nov. 27, providing an opportunity for the Department of Justice (DOJ) lawyers and his attorneys to resolve any remaining disagreements with the district judge overseeing the case. By pleading guilty according to this agreement, Zhao has waived his right to appeal any sentence exceeding 18 months.

In a separate court filing, the DOJ and Zhao reached an agreement on a $50 million fine, although no prison time was specified. As a result of the legal proceedings, Zhao resigned from Binance, the cryptocurrency exchange he founded in 2017. The settlement between Binance and the U.S. Department of Justice includes a substantial penalty of $4.3 billion, distributed among various federal agencies. Furthermore, Binance has committed to allowing multiple monitors to oversee its operations for the next five years.

The legal saga involving Binance, Zhao, and the U.S. authorities has drawn considerable attention within the cryptocurrency industry. The settlement and release of Zhao mark significant developments, shaping the future trajectory of Binance and its founder in the aftermath of the legal actions brought against them.

Image: Wikimedia Commons

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