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.
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