Binance Founder, Changpeng Zhao, to Remain in U.S. Temporarily
Changpeng Zhao, the founder and CEO of Binance, recently pleaded guilty to federal charges associated with his cryptocurrency exchange. This has led to the ruling by a federal judge, stating that Zhao must remain in the United States at least temporarily. Zhao was released on a $175 million bond last week and has a sentencing hearing scheduled for Feb. 23.
Prosecutors have requested that Zhao be barred from leaving the country before his sentencing, while his lawyers have asked that their client be able to travel, noting in a briefing that he “voluntarily flew” to the U.S. for his guilty plea. Zhao is currently residing in the United Arab Emirates, which does not have a formal extradition treaty with the U.S. Richard Jones, a U.S. District Court Judge in Seattle, said Zhao cannot return to the UAE “until such time as this Court resolves the Government’s motion for review.”
Government Filing and Plea Arrangement with Department of Justice
The government wrote in a filing to the court expressing its concerns over Zhao traveling back to the UAE, stating that in the vast majority of cases, a multi-billionaire defendant who has pleaded guilty and faces possible prison time would be detained. Prosecutors claimed they’d already made an “exceptional recommendation” in suggesting that Zhao be allowed to remain free until his sentencing. They cited that Zhao presents a flight risk that “could be managed by requiring him to remain in the U.S. and preventing him from returning to the safe haven of the UAE.”
As part of a $4.3 billion settlement with the Department of Justice, Zhao agreed to step down as CEO of Binance. The plea arrangement resolved a multiyear investigation into the world’s largest cryptocurrency exchange. Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money laundering program and for willfully violating U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law,” according to the Justice Department.
Impact on Binance
Binance will continue to operate but with new ground rules. The company will be required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money laundering standards. Binance must also appoint an independent compliance monitor. The company and the cryptocurrency industry, as a whole, await further developments in this case.
The decision to allow Zhao to remain free until his sentencing could have a ripple effect on the future of both Binance and the cryptocurrency market. Many are closely watching how this high-profile case unfolds, as it carries significant implications for the industry.
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