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Recently, Changpeng “CZ” Zhao, the creator of Binance, entered a guilty plea to one count of breaking the Bank Secrecy Act, which was approved by US Judge Richard Jones. Zhao’s request to return to the United Arab Emirates prior to his anticipated sentence in February 2024 is still pending before the judge.
The guilty plea was formally accepted by the U.S. District Court for the Western District of Washington, a little more than two weeks after Zhao and Binance admitted to many infractions pertaining to insufficient anti-money laundering procedures at the top cryptocurrency exchange. As part of the guilty plea, Zhao resigned as CEO of Binance.
The court stated, “This Court… hereby accepts the plea of guilty of the defendant… the defendant is adjudged guilty of such offense.” Sentencing is scheduled for February 23, 2024, and Zhao has been released on bond pending that date.
Prosecutors have requested the court to order Zhao to remain in the United States until his sentence, despite Zhao’s attorneys’ contention that he is not a flight risk and should be let to return to the United Arab Emirates, where his family resides, until February. Zhao can now go back to the United Arab Emirates under the terms of his bail release, but he must return to the United States two weeks before to his sentence.
But this portion of Zhao’s release is postponed while Judge Jones weighs the arguments and makes a decision. Zhao must stay in the United States until a final decision is reached.
In its guilty plea, Binance admitted to three crimes, one of which was connected to sanctions and carried a hefty $4.3 billion punishment. Binance has to allow monitors to report to the Treasury Department and the Department of Justice as part of the plea agreement. Since Zhao’s resignation, Binance’s previous director Richard Teng has taken over as CEO.
Strong compliance controls are necessary, as the scenario highlights the increasing legal scrutiny and leadership changes within the bitcoin business.