Former Binance CEO CZ Required to Stay in US Ahead of Prison Sentencing

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A federal judge has ordered former Binance Chief Changpeng Zhao (CZ) to remain in the United States until his sentencing in February 2024. This directive follows his guilty plea for violating anti-money laundering laws.

Zhao Restricted From United Arab Emirates’ Safe Haven’

Following his guilty plea last week for violating the Bank Secrecy Act by failing to establish an effective anti-money laundering program that circumvented US economic sanctions, Changpeng Zhao is required to remain in the country.

Federal Judge Richard Jones issued a ruling on Monday, stipulating that Zhao is prohibited from leaving the country until his sentencing.

Although he is not currently facing imprisonment, the Binance founder is presently released on a $175 million bail until his scheduled sentencing on February 23, 2024.

Zhao’s guilty plea coincides with recent developments involving his rival, FTX founder Sam Bankman-Fried, who was recently found guilty of seven fraud charges in a Manhattan federal court.

Deep Insights on CZ vs. US Government

Zhao was released on a $175 million personal recognizance bond last week. As per a court filing, CZ committed to posting $15 million held in a trust account by Davis Wright Tremaine (DWT) and agreed to forfeit funds in case of a violation of his bail terms.

Additionally, the former CEO was tasked with securing two guarantors pledging $250,000 and $100,000, respectively.

The conditions of CZ’s release explicitly prohibit him from engaging in illegal activities, tampering with witnesses or victims’ accounts, manipulating documents, or ingesting any non-prescribed substances. The order also allowed Zhao to depart from the US and return 14 days before his sentencing.

On November 21, the US government announced its intent to appeal the decision to a higher-ranking judge. Zhao, in agreement, opted to stay in the state until November 27, allowing Department of Justice (DOJ) attorneys to resolve disputes with the district judge overseeing the case.

However, the recent decision by Judge Jones puts a pause on and reviews the earlier ruling by Magistrate Judge Brian A. Tsuchida, which permitted CZ to travel to the UAE while adhering to the conditions of his appearance bond. This automatically mandates the defendant to remain within the United States pending the completion of the review.

The ex-CEO, reportedly facing up to 18 months in prison under federal guidelines, has agreed to waive his right to appeal any sentence exceeding this duration due to a guilty plea. Prosecutors will now determine their stance on the appropriate jail term.

Binance Operations Will Continue

In a November 21 post on X (formerly Twitter), Zhao acknowledged making mistakes and emphasized the need to take responsibility. He also disclosed the appointment of Richard Teng, the former global head of regional markets for the trading platform, as Binance’s new CEO.

This was closely followed by a live press conference by Attorney General Merrick Garland, announcing that CZ’s plea and a $4.3 billion settlement with Binance would cover all previous legal actions and additional charges.

The investigation and spate of legal actions against Binance and its founder was a collaborative effort by the DOJ, the Commodity Futures Trading Commission (CFTC), and the Treasury Department.

Nevertheless, Binance will continue to operate on new rules, which entails maintaining and improving its compliance program to ensure all business operations align with the US anti-money laundering standards.

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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.