New York, NY – A federal judge in the United States has officially accepted the guilty plea of Changpeng Zhao, the former CEO of Binance, for one count of anti-money laundering violations under the Bank Secrecy Act. While the guilty plea has been acknowledged, the judge has yet to determine whether Zhao will be permitted to return to his residence in the UAE before the scheduled sentencing in February.
Zhao, who last month admitted to anti-money laundering charges as part of Binance’s settlement with federal prosecutors, involved a payment of $4.3 billion. The settlement also mandated Binance’s complete exit from the US market, prompting Zhao to step down from his role as CEO. Richard Teng, a former Binance director, has assumed the position of CEO in the aftermath.
As per the terms of the plea deal, Zhao faces a potential prison sentence of 18 months, with the sentencing slated for February 2024. In the absence of the plea deal, the maximum prison term for money laundering in the US could extend to 20 years.
Zhao was granted bail on a $175-million bond agreement, securing $15 million in a trust account and additional funds through guarantors. Although the initial agreement permitted him to travel to the UAE, Zhao was required to return to the US two weeks before the trial. However, concerns over the flight risk associated with Zhao’s visit to the UAE were raised by federal prosecutors, citing the absence of an extradition treaty between the US and the UAE. Furthermore, the location of Zhao’s assets outside US jurisdictions posed challenges in recovering bail funds if he failed to return for sentencing.
While a temporary stay order preventing Zhao from leaving the US has been issued by the judge, the final ruling remains pending.
This development follows a broader crackdown on cryptocurrency violations in the US. Sam Bankman-Fried, the founder and former CEO of FTX, recently faced convictions on seven criminal charges in a high-profile trial. Meanwhile, Binance, in addition to its settlement with federal prosecutors, paid $2.85 billion to the US commodities regulator to resolve civil charges. The crypto exchange continues to confront the US securities market regulator in court, contesting 13 charges, including allegations of commingling customer and company funds.
Despite these legal challenges in the US, Binance remains a dominant global venue for cryptocurrency trading, facilitating approximately $19.5 billion in spot trading and over $82.7 billion in derivatives trading in the past 24 hours.
