Reports of former Binance CEO, Changpeng Zhao (CZ), being stuck in the US made rounds over the last week following the array of events that led to his resignation from the top position. This happened as he pleaded guilty to the charge of violating the Bank Secrecy Act.
The world’s largest crypto exchange by volume had also admitted to the charges of violating sanctions and money transmission laws, agreeing to pay a hefty $4.3 billion fine.
On Monday, the former CEO responded to a post made by blockchain news platform Watcher.Guru on a US Judge denying Zhao from leaving the country before sentencing. CZ dropped a ‘4’ in its reply, which is a number that he often uses to indicate fake news, FUDs, and attacks.
The timeline
After CZ’s guilty plea, he was granted a release on a $175 million personal recognisance bond. Under its terms, he was free to return to the UAE, where he is based along with his wife and children.
However, in last week’s Wednesday filing, prosecutors called the bond release insufficient, arguing that if Zhao did not return to the US they wouldn’t be able to secure the $175 million bond as most of his assets are outside the country. According to them, CZ was wealthy enough to pay off the rest of the funds without an issue,. There was also the issue of the lack of an extradition treaty between the UAE and the US.
Tagging the possibility of a ‘flight risk’, the attorneys of the US Department of Justice moved to keep Zhao in the country as the former CEO had “minimal ties to the US” and, therefore, might not return should he be allowed to leave. They also clarified that this did not mean CZ would be jailed ahead of his sentencing, which is scheduled for February next year.
When Watcher.Guru reported on the same, Serbia’s consul to Singapore, Calvin Cheng, replied, contradicting the story saying that the judge stayed the ruling pending a full hearing. To this, CZ posted an emoji showing appreciation, along with the number ‘4’.
Zhao’s attorneys had also argued that the former CEO demonstrated his intent to take responsibility by coming to the US to plead guilty in the first place. Along with this, they stated the inability of his wife and children to relocate for the few months just before his sentencing.
A ‘backdoor’ access to funds
Despite the settlement with the US Department of Justice (DOJ) on the charges alleging the operation of an anti-money laundering system, the Securities and Exchange Commission (SEC) continues to hound Binance and its former CEO.
As per reports from Wall Street Journal, the regulatory watchdog now seeks to obtain evidence that CZ might still have a ‘backdoor’ entry to the exchange’s US assets.
Along with accusing Binance of operating a securities exchange illegally in the June 2023 lawsuit, the SEC is also investigating the possibility of a scenario similar to the collapse of crypto exchange FTX in November 2022.
However, Binance, now headed by its new leadership under Richard Teng, has committed to regulatory compliance, focusing on collaborating with regulators globally and building a reputation centered on trust.
