Binance’s Former CEO Plans to Commit Entire $4.5B Stake for January Exit from the US

Jimmy Aki
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Former Binance CEO Changpeng Zhao (CZ) made an unsuccessful attempt to pledge his $4.5 billion stake in Binance.US as collateral to secure temporary travel permission to the United Arab Emirates (UAE).

Equity Stake as Security Collateral for Return

A court filing dated January 24 revealed a previously undisclosed letter dated December 22 sent by Changpeng Zhao’s legal team to Judge Richard Jones.

In this letter, Zhao proposed leveraging his $4.5 billion equity in Binance.US as collateral, citing a valuation from a funding round two years ago.

Changpeng Zhao
Source: CourtListener

This proposal emerged from Zhao’s intention to travel to the UAE for up to four weeks in early January to support a friend or family member undergoing surgery. However, federal prosecutors rejected the request, expressing concerns about Zhao’s “enormous wealth and property abroad” preventing his return.

This decision was linked to Zhao’s guilty plea to money laundering on November 21, where he admitted to operating an unlicensed money-transmitting business and violating the Bank Secrecy Act.

Simultaneously, Binance pleaded guilty and agreed to pay a substantial $4.3 billion in fines and restitution as part of settlements with the Justice Department, Treasury Department, and the Commodity Futures Trading Commission.

As part of his guilty plea, Zhao accepted a $50 million fine and agreed to step down as the CEO of Binance. Currently out on a $175 million bond in the U.S., Zhao faces a potential 18-month prison sentence.

According to the plea agreement, he has committed not to appeal any sentence up to that duration. Additionally, Senior Justice Department officials have indicated the possibility of seeking a more severe penalty.

The former Binance CEO has been ordered to remain within the United States until his scheduled sentencing on February 23.

Binance Compliance With Law Enforcements Indicates Integrity Rebuild

Throughout the CZ saga with the U.S. Department of Justice (DOJ), Binance openly acknowledged its shortcomings and conceded the lack of sufficient compliance controls.

In adherence to its plea agreement with federal prosecutors, the exchange committed to the appointment of a government monitor to oversee its operations.

Additionally, the trading firm announced that Richard Teng, a key executive, would assume the CEO role, while Zhao would remain available for consultation on historical aspects of the business.

Binance has also outlined its objectives, placing significant emphasis on a commitment to enhancing compliance with law enforcement. This effort is geared towards rebuilding trust and garnering support within the global crypto and blockchain ecosystem.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.