A US federal judge has approved the guilty plea of former Binance CEO Changpeng Zhao for one count of anti-money laundering violations under the Bank Secrecy Act. Despite this acceptance, the judge has yet to determine whether Zhao will be allowed to return to his residence in the UAE before the scheduled February sentencing.
US Federal Legal Proceedings and Settlement
Last month, Zhao admitted guilt to the anti-money laundering charges in the US, leading to a settlement between his exchange and federal prosecutors. Binance paid a hefty $4.3 billion as part of the agreement, with the exchange committing to a complete exit from the US. Simultaneously, Zhao stepped down as CEO, and Richard Teng, a former Binance director, assumed the role.
As per the plea deal, Zhao could face an 18-month prison sentence slated for February 2024. However, without the plea deal, the maximum penalty for money laundering in the US stands at 20 years.
Flight Risk Concerns and Legal Hurdles
Zhao secured a $ 175 million bond for bail, placing $15 million in a trust account and acquiring additional funds through guarantors. Initially permitted to travel to the UAE, concerns arose regarding Zhao’s potential flight risk. The absence of an extradition treaty between the US and the UAE and Zhao’s assets held outside US jurisdictions raised apprehensions about bail recovery if he failed to return for sentencing.
The judge temporarily restrained Zhao from leaving the US, pending the final ruling.
US Crackdown on Crypto Violations
The legal actions against Zhao aren’t isolated incidents in the crypto space. FTX’s Founder and former CEO, Sam Bankman-Fried, faced a New Jersey jury trial and was convicted on seven criminal charges. His sentencing awaits, and he remains in custody.
Aside from the settlement with federal prosecutors, Binance paid the US commodities regulator an additional $2.85 billion to settle civil charges. The exchange is concurrently battling the US securities market regulator, defending itself against 13 charges, including allegations of fund commingling.
Despite the regulatory setbacks in the US, Binance remains a dominant force in the global cryptocurrency trading sphere. Recent data from Coinmarketcap.com, a platform owned by Binance, indicates substantial trading volumes, with approximately $19.5 billion in spot trading and over $82.7 billion in derivatives trading in the past 24 hours.