28th November 2023 – (New York) Binance Holdings Ltd co-founder Changpeng Zhao, commonly known as CZ, has encountered travel restrictions after a U.S. federal judge ruled against his return to the United Arab Emirates (UAE). The ruling comes as CZ pleaded guilty to criminal charges in the United States and awaits sentencing on February 23rd.
The charges against Zhao revolve around the failure to implement adequate anti-money laundering policies and violations of US sanctions. As part of a plea deal, CZ agreed to post a substantial $175 million bond, with $15 million in cash, to ensure his appearance at the sentencing. Binance, the world’s largest cryptocurrency exchange, also pleaded guilty and agreed to pay penalties.
As a consequence of the guilty plea, Changpeng Zhao stepped down from his position as Binance’s CEO. The potential repercussions of his actions could result in a maximum prison sentence of 10 years, although it is expected that he will receive no more than 18 months. Additionally, CZ has agreed to pay a $50 million fine.
The ruling by U.S. District Judge Richard Jones in Seattle has put a hold on Zhao’s plans to return to the UAE. The judge’s decision will remain in effect until a further ruling is issued regarding the prosecutors’ motion to keep Zhao in the U.S. until his sentencing.
The U.S. government had expressed concerns about the risk of CZ fleeing the country due to his significant assets, ties to the UAE, and the absence of an extradition agreement with the Persian Gulf state. However, Zhao’s legal team argued that he voluntarily came to the U.S. and demonstrated his willingness to accept responsibility for his actions.
Meanwhile, Binance, the cryptocurrency exchange associated with CZ, is facing additional challenges. The company is confronted with civil lawsuits filed by investors seeking to recover billions lost during the exchange’s struggles. Binance investors have recently sued prominent figures such as soccer star Cristiano Ronaldo, NBA player Jimmy Butler, and YouTube influencers Graham Stephan and Ben Armstrong, alleging that their paid endorsements contributed to misleading customers into purchasing unregistered securities.