Changpeng "CZ" Zhao, founder and former CEO of Binance, has been released on a substantial $175 million personal recognizance bond after pleading guilty to violating the Bank Secrecy Act. Federal officials accused him of directing Binance to permit U.S. customers to use the platform without conducting proper know-your-customer or anti-money laundering checks.
Guilty Plea and Bond Conditions
In court on Tuesday, Zhao admitted to the charges, leading to his release under certain conditions. The court filing reveals that he posted $15 million held in a trust account by DWT and agreed to forfeit funds if he violates the release terms. Additionally, two guarantors, pledging $250,000 and $100,000, support his release. A sentencing hearing is scheduled for Feb. 23, 2024, at 9 a.m. Pacific Time.
Release Conditions and Departure Allowance
Under the terms of release, Zhao is prohibited from breaking the law, tampering with witnesses or victims, and using non-prescribed controlled substances – standard bond provisions. Interestingly, the order seemingly allows Zhao to leave the U.S., specifying a requirement to return 14 days prior to sentencing.
Resignation from Binance and Settlement
As part of the settlement with the U.S. Department of Justice, Zhao resigned from Binance, the exchange he founded in 2017. The company will pay $4.3 billion in penalties to various federal agencies and undergo monitoring by multiple entities for the next five years. The settlement encompasses charges with the Financial Crimes Enforcement Network (FinCEN), Office of Foreign Asset Control (OFAC), and Commodity Futures Trading Commission.
Attorney General Merrick Garland remarked during a press conference on Tuesday that this penalty is among the largest ever obtained from a corporate defendant in a criminal matter.