Zhao’s guilty plea stems from accusations that Binance violated the Bank Secrecy Act by knowingly allowing US customers on the platform without conducting proper KYC and AML checks.
In a recent development in the legal saga surrounding Binance Holdings Ltd‘s former CEO Changpeng ‘CZ’ Zhao, prosecutors are intensifying efforts to keep him within the United States ahead of his sentencing hearing on February 23, 2024. This follows Zhao’s guilty plea on Tuesday to violating US laws related to money laundering, a move that prompted his resignation as CEO and a significant legal battle for both him and Binance.
Prosecutors’ Plea to Introduce Travel Restrictions for Changpeng Zhao
Magistrate Judge Brian Tsuchida had previously ruled that Zhao could return to the UAE on the appearance bond of $175 million, with the condition that the court might review this decision before 5 p.m. Pacific Standard Time on November 27. Furthermore, Zhao was required to return to the US by February 9, 2024.
However, a court filing submitted on Wednesday suggests that prosecutors are urging a federal judge to enforce travel restrictions on Zhao, preventing him from returning to his residence in the United Arab Emirates (UAE) before his sentencing.
As highlighted in a recent report, the Department of Justice (DOJ) asserted that Zhao, a citizen of both the UAE and Canada, should not be permitted to return to his UAE residence due to the “substantial risk of flight posed by Zhao.”
They highlighted Zhao’s substantial assets and strong ties to the UAE, emphasizing the government’s inability to extradite him from the region. The prosecutors urged the court to mandate that Zhao remain in the United States until his sentencing date in February 2024.
Consequences of Zhao’s Guilty Plea
Zhao’s guilty plea stems from accusations that Binance violated the Bank Secrecy Act by knowingly allowing US customers on the platform without conducting proper Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.
Despite initially rejecting these allegations and filing a motion to dismiss the lawsuit, Zhao stepped down as CEO and agreed to a personal recognizance bond of $175 million. In addition to the bond, Zhao is required to post $15 million in a trust account and secure two guarantors pledging $250,000 and $100,000, respectively.
While awaiting sentencing, he must comply with strict conditions, including avoiding legal violations, staying away from controlled substances, refraining from tampering with witnesses or victims, and appearing in court as required.
Alongside Zhao’s legal troubles, Binance has agreed to pay $4.3 billion to the United States DOJ. Despite these substantial fines, Zhao maintains that the resolution with US agencies disproves allegations of misappropriation of user funds or market manipulation against Binance. A position that absolved him and the exchange from the Sam Bankman-Fried legal ordeal.
As the legal proceedings unfold, the case against Zhao and Binance continues to capture the attention of traders and investors in the crypto ecosystem. The upcoming sentencing hearing in February 2024 will very certainly determine the next chapter in this high-profile case.
