Binance, the world’s leading cryptocurrency exchange, finds itself entangled in a legal storm as it faces three serious criminal charges. Adding to the shock, Changpeng Zhao (CZ), the CEO of the company, has resigned and pleaded guilty in a Seattle federal court in connection with the charges.
The Securities and Exchange Commission first sued Binance and Zhao in June, accusing the crypto exchange of operating illegally in the US while defrauding investors. The agency also attempted to freeze Binance’s assets over claims the exchange engaged in “violative conduct” in “disregard of the laws of the United States.”
Binance ultimately avoided the freeze by implementing a set of restrictions that prevented Binance and Zhao from having access to customer funds, among other things.
On November 22, a Seattle federal court pronounced Binance and CEO CZ guilty on three criminal charges: operating an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy charges.
CZ & Binance Settlement Deal
In a deal with the US authorities, CEO Changpeng Zhao admitted breaking money laundering rules and agreed to pay a $50 million fine under a sweeping deal worked out with the Justice Department designed to keep the company operating.
Meanwhile, Zhao agreed to step down as part of the settlement, which included the Treasury Department and the Commodity Futures Trading Commission.
The agreement is designed to allow Binance to continue global operations, even though the company has committed to paying a substantial $4.3 billion fine. Although, the company will likely be subject to strict oversight and monitoring by U.S. regulators moving forward.
Where is CZ now?
Reports indicate that Zhao currently resides in the United Arab Emirates (UAE). Despite the UAE having a mutual legal assistance treaty with the US, facilitating information exchange for criminal investigations, there is no formal extradition treaty. This absence makes it challenging to bring him to court in the US.
While Binance CEO Changpeng Zhao has not directly commented on the settlement details, he has previously expressed Binance’s commitment to full compliance with regulations across all jurisdictions.
