DOJ requests Changpeng Zhao be barred from leaving the US pending sentencing
Binance founder could face up to 18 months in prison
23.11.2023 - 09:28
316
4 min
0
What’s new? The US Department of Justice (DOJ) said that the court should order Changpeng Zhao to stay in the country until sentencing, which is scheduled until February 23, 2024. Earlier, Binance’s founder voluntarily came to the States to settle claims against the crypto exchange. As part of the settlement, he pleaded guilty to failing to maintain an effective anti-money laundering program, resigned as CEO, and paid a $50 million fine and $175 million bail. At the same time, the court allowed Zhao to return to the UAE, where he lives with his wife and three children, on the condition that he would arrive back in the United States two weeks before the meeting.
What else is known? In response, the DOJ urged not to allow Zhao’s departure to the UAE because of “an unacceptable risk of flight.” Officials emphasize that they will not be able to ensure the businessman’s return to the US because he has a privileged status in the UAE and, in addition, there is no extradition treaty between the countries.
“Faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family,” the prosecutor’s office said.
Officials also noted that most of Zhao’s fortune is held outside US jurisdiction, which also increases the risk of failure to appear. The businessman should remain in the continental United States for the next three months, they said.
As part of the agreement with US authorities, Binance also agreed to pay fines to the DOJ’s anti-money laundering (FinCEN) and sanctions enforcement (OFAC) divisions and the commodities’ regulator (CFTC) totaling $4,3 billion.
The global platform will completely cease operations in the country and allow US officials on its supervisory board for five years to monitor compliance. Zhao was replaced as CEO by regional senior executive Richard Tan.
Changpeng Zhao steps down as Binance CEO as part of a settlement with the US DOJ
The exchange will pay a total of $4,3 billion in fines to various federal agencies
Consequences for Binance. Against the background of this news, the rate exchange of the token, BNB, collapsed by 14% over the day and reached $228, while users withdrew more than $1 billion from the platform. On November 23, 09:00 UTC, the rate of BNB partially recovered to $235, and the daily outflow from Binance was less than $0,5 billion.
Along with this, CryptoQuant analysts noted that Binance’s bitcoin reserves decreased by 5000 coins, while the indicator of the American crypto exchange Coinbase increased by 12 000 BTC.
Coinbase CEO Brian Armstrong said that his exchange, unlike its competitors, was initially focused on compliance, which required significant resources, but brought positive results in the long term.
“We now have an opportunity to start a new chapter for this industry,” the businessman said, adding that the events surrounding Binance should be a catalyst for clear rules for crypto regulation in the country.
JPMorgan was also positive about the implications of the agreement between Binance and the US Department of Justice, as it will eliminate the systemic risk associated with a hypothetical collapse of the exchange.
Useful material?
Market
According to the founder of TRON, the leading US crypto exchange asked for several hundred million dollars for the listing of TRX
Nov 4, 2024
Incidents
The company conducted fictitious trading for six years to inflate the trading volume of tokens of several companies, receiving payment for these services
Nov 1, 2024
Market
1,5 million addresses have already left applications
Oct 31, 2024
Business
The company began investing in bitcoin in 2020, and since then, the value of its securities has risen by 1700%
Oct 30, 2024
Mining
The Deputy Energy Minister explained that in deficit regions, it is impossible to allocate large capacities for industry enterprises until 2030
Oct 30, 2024
Market
Customers will also be able to withdraw funds to bank accounts using cards
Oct 30, 2024