Changpeng Zhao, the former CEO of the crypto exchange giant Binance, has been denied permission to leave the US despite offering a staggering $4.5 billion bond.
This development follows Zhao’s guilty plea to US anti-money laundering charges and marks a significant chapter in authorities’ ongoing scrutiny of the cryptocurrency industry.
Zhao Blocked from US Exit Despite Binance Stake Offer
Zhao, who stepped down from his role at Binance in November 2023, found himself entangled in a complex legal situation with the US justice system.
He proposed to pledge his entire $4.5 billion stake in Binance.US for permission to travel to the United Arab Emirates. However, this request was firmly denied by the US District Court in Seattle. This denial underscores the severity of the charges against him and the gravity with which the court views his case.
The ruling, detailed in a court filing, came from Judge Richard A. Jones of the Western District of Washington at Seattle. The document highlights the substantial financial offer made by Zhao in his bid to secure travel approval.
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Despite the enormity of the bond, the court upheld its decision to keep Zhao within US borders. It cited the need to ensure his presence through the sentencing process set for February 2024.
“It is ordered that the condition permitting Defendant to return to the UAE pending sentencing is stayed until such time as this Court resolves the Government’s motion for review.”
This legal saga represents a significant moment in the ongoing regulatory and legal challenges faced by the cryptocurrency industry. Zhao, a citizen of both Canada and the United Arab Emirates, now finds himself at the center of a case with potentially far-reaching implications.
The court’s decision to deny his travel signals a no-tolerance stance by US authorities towards any infringement of anti-money laundering laws.
CFTC’s Landmark Ruling Against Binance and Zhao
Zhao’s situation is further complicated by the substantial financial penalties imposed on both him and Binance. These penalties are part of the settlement with the Commodity Futures Trading Commission (CFTC).
The court has ordered Zhao to personally pay a $150 million civil monetary penalty. Additionally, Binance is required to disgorge $1.35 billion of alleged ill-gotten transaction fees. It must pay a further $1.35 billion penalty to the CFTC.
These penalties underscore the severity of the violations and the US government’s commitment to enforcing its regulations within the cryptocurrency sector.
Zhao faces a maximum prison sentence of 10 years. However, he has agreed not to appeal any sentence of up to 18 months. This signifies his acknowledgment of the missteps and the need to take responsibility for them.
“I made mistakes, and I must take responsibility.”
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