Binance Founder Changpeng 'CZ' Zhao Released on $175M Bond, Will Be Sentenced in February

Binance settled charges with the DOJ, agreeing to pay $4.3 billion.

AccessTimeIconNov 22, 2023 at 12:42 a.m. UTC
Updated Jan 26, 2024 at 2:58 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Binance founder and former CEO Changpeng "CZ" Zhao has been released from custody on a $175 million personal recognizance bond.

Zhao pleaded guilty to violating the Bank Secrecy Act in court earlier on Tuesday, after federal officials alleged he directed Binance to allow U.S. customers to use the platform without conducting proper know-your-customer or anti-money laundering checks.

According to a court filing, he's posting $15 million held in a trust account by Davis Wright Tremaine (separate from the bond) and agreeing to forfeit funds if he violates the terms of his release. He's also finding two guarantors, who are pledging $250,000 and $100,000 respectively. A sentencing hearing has been scheduled for Feb. 23, 2024, at 9 a.m. Pacific Time.

The terms of Zhao's release bar him from breaking the law, tempering with witnesses or victims or taking any non-prescribed controlled substances – normal provisions in a bond release.

The order also appears to allow Zhao to leave the U.S., saying he has to return 14 days prior to sentencing, though federal prosecutors said during a hearing earlier on Tuesday that they wanted to appeal that provision to a more senior judge.

Zhao agreed to remain in the Seattle area until Monday, Nov. 27, allowing DOJ lawyers and his attorneys to hash out that disagreement with the district judge overseeing the case.

Because Zhao pleaded guilty pursuant to an agreement, he waived his right to appeal any sentence over 18 months, Magistrate Judge Brian Tsuchida said in court Tuesday. According to another court filing, the DOJ and Zhao agreed to a $50 million fine, but no prison time was mentioned.

Zhao resigned from Binance, the exchange he founded in 2017, as part of the company's settlement with the U.S. Department of Justice on Tuesday. Binance will pay $4.3 billion in penalties to various federal agencies and allow multiple monitors to oversee its operations through the next five years. Alongside the DOJ, Binance settled charges with the Financial Crimes Enforcement Network (FinCEN), Office of Foreign Asset Control (OFAC) and Commodity Futures Trading Commission – respectively, the U.S.'s money laundering watchdog, sanctions watchdog and federal commodities regulator.

"This is one of the largest penalties we have ever obtained from a corporate defendant in a criminal matter," Attorney General Merrick Garland said during a press conference on Tuesday.

UPDATE (Nov. 22, 2023, 01:15 UTC): Adds clarifying detail about whether Zhao can leave the country.

UPDATE (Nov. 22, 2023, 16:40 UTC): Adds link to filing.

Edited by Nick Baker.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.