Judge Greenlights Deal Between Binance, CEO Changpeng Zhao, and DOJ

A federal judge has accepted former Binance CEO Changpeng ‘CZ’ Zhao’s guilty plea to a single charge of violating the Bank Secrecy Act, which carries a penalty of up to 18 months in prison. Zhao’s sentencing hearing is scheduled for February 23, 2024.

The charge against Zhao formed part of a settlement Binance and Zhao made with the US Department of Justice (DOJ) last month, which also included penalties and other payments of over US$4 billion (AU$6 billion), and was claimed by the DOJ to be the largest corporate resolution to include criminal charges for an executive in US history.

The courts are still yet to decide if Zhao will be free to travel back to the United Arab Emirates, where he and his family reside, before his sentencing.

Zhao Adjudged Guilty Of Money Laundering Relating Crime

As reported by CoinTelegraph, in accepting Zhao’s guilty plea, Federal Judge Richard Jones of the U.S. District Court for the Western District of Washington, has adjudged the former Binance CEO guilty of the charge against him, which relates to his failure to implement an effective anti-money laundering program at Binance. 

In his ruling the judge wrote:

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 … the defendant is adjudged guilty of such offence.

Federal Judge Richard Jones of the U.S. District Court for the Western District of Washington

In addition to pleading guilty to the criminal charge, Zhao’s deal with the DOJ also saw him step down as CEO of Binance and personally pay US$150 million (AU$229 million).

Courts Yet To Rule If Zhao Can Leave US 

Zhao is currently free, having posted a US$175 million (AU$267 million) bond, but the courts are yet to decide if the former Binance CEO should be permitted to leave the US to return to the UAE as he awaits his sentencing.

Prosecutors argue that Zhao represents an “unacceptable risk of flight”, warning in a November 22 motion to review his bond conditions that if Zhao were to return to the UAE before sentencing there would be no way to force him to return as the US lacks an extradition treaty with the UAE.

The prosecutors also pointed out that staying in the UAE with his family and enjoying his substantial wealth will be a much more attractive option than returning to the US to face up to 18 months in a federal prison, stating:

For his part, Zhao insists he poses no risk of flight, saying he has demonstrated he takes responsibility for his actions by coming to the US to appear in court. For now Zhao has been blocked from leaving the US until a court has ruled on the prosecutor’s application to review his bond conditions.