Binance founder CZ may stay in US until February 2024

abdelaziz Fathi

U.S. prosecutors are taking steps to keep Changpeng “CZ” Zhao, the founder and former CEO of Binance, in the United States until his sentencing hearing set for February 2024.

Following Zhao’s guilty plea to a charge related to Binance’s anti-money laundering protocols, prosecutors filed a motion to review his bond conditions, citing a substantial risk of flight due to his wealth and connections outside of the U.S., as well as minimal ties within the country.

Zhao, a citizen of both the United Arab Emirates (UAE) and Canada, proposed to return to the UAE against a $175 million appearance bond secured by $15 million in cash and property pledges from three individuals. While a magistrate judge initially allowed this conditional return, prosecutors are now challenging the decision, claiming that Zhao’s strong ties to the UAE—a nation without an extradition treaty with the U.S.—pose an unacceptable risk of nonappearance.

The former CEO was released on the mentioned bond after his plea, but prosecutors are advocating for his retention in the U.S., particularly due to the limitations in securing his return if he were to not reappear for sentencing. The settlement with the DOJ has already led to Zhao stepping down as CEO and Binance agreeing to exit the U.S. market. Richard Teng has since taken over Zhao’s role at Binance.

CZ’s plea is part of a broader settlement with the U.S. Department of Justice, which includes a hefty $4.3 billion fine levied against the cryptocurrency exchange. Alongside this, Zhao has consented to a personal fine of $50 million, with his sentencing to be scheduled for a future date.

In addition to leadership changes, the settlement stipulates that Binance must engage an independent compliance monitor, and as part of his plea agreement, Zhao will be barred from any operational role in Binance for a period of three years following the appointment of this monitor.

Despite stepping down from his executive role and facing limitations on his involvement with the company’s operations, Zhao will retain his majority stake in Binance, which is recognized as the world’s largest cryptocurrency exchange by trading volume. This condition of the settlement allows him to maintain ownership while the company navigates the aftermath of the DOJ’s investigation and works towards regulatory compliance.

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