Changpeng Zhao, popularly known as ‘CZ’ and the former CEO of Binance has pleaded guilty to anti-money laundering violations. This plea comes as a conclusion to a years-long investigation by federal regulators and has led to one of the largest corporate settlements in legal history.
US District Judge Richard Jones, presiding in Seattle, Washington, accepted Zhao’s plea.
Former Binance CEO ‘CZ’ Officially Takes Guilty Plea
Judge Jones stated:
“This Court, having considered the Report and Recommendation of the United States Magistrate Judge, to which there has been no timely objection … hereby accepts the plea of guilty of the defendant.”
This acceptance concludes an extensive investigation by federal regulators into Binance’s operations.
Binance, as part of the settlement, has agreed to pay one of the largest fines in corporate history, totaling $4.3 billion. Zhao himself agreed to a personal fine of $50 million.
Reflecting on the gravity of the situation, Zhao stated,
“10 years ago today, I quit my job, sold my house, and aped into #bitcoin. No, I am not saying you should do the same. Many people asked, how could you take such risks? Me, I knew I could easily get a job… Everyone’s risk profile is different. Learn risk management.”
Following his guilty plea, Zhao also stepped down from his roles as CEO of Binance and chairman of the board of directors for Binance.US. This decision effectively diminishes his direct influence over the US operations of Binance, relegating his interest to a purely economic one.
Read more: 7 Best Binance Alternatives in 2023
Zhao to Be Sentenced in 2024
Zhao’s sentencing is scheduled for February 23, 2024, with a potential 18-month prison term. He is, however, currently released on a $175 million bond. The decision about his travel back to the United Arab Emirates, where he resides, remains under judicial consideration. Federal prosecutors also expressed concern, stating,
“He has three young children and a partner in the UAE; once in the UAE and faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family.”
As a part of its plea, Binance will also need to implement regulatory oversight, allowing monitors to report back to the Department of Justice and the Treasury Department. Richard Teng stepped in as the new CEO. Many are confident that he can guide Binance through this new regulatory phase
All in all, this case underscores the evolving regulatory grip that regulators have on the cryptocurrency industry. It also serves as a stern warning about the consequences of non-compliance with established financial regulations.
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