The US Department of Justice and Changpeng Zhao dispute the terms following CZ’s guilty plea for AML-ing violations.
Changpeng Zhao, the former CEO of Binance, and the US Department of Justice (DOJ) are engaged in a heated discussion after Zhao entered a guilty plea for violating US anti-money laundering regulations.
Despite not supporting CZ’s detention right away, the DOJ has opposed CZ’s exit from the country, Coindesk reports. He has been listed by the Justice Department as a “flight risk that could be managed.” This position is taken in spite of CZ’s voluntary court appearance, during which he claimed that his presence demonstrated non-flight tendencies.
CZ’s attorney has emphasized his willing self-surrender, desire to settle the matter, and offer of a significant bond amount. The harshness of the possible sentence, according to US Attorneys, might compel him to return to the United Arab Emirates, where he holds primary citizenship and where there is no extradition agreement with the US.
Changpeng Zhao Gazing Potentially at a 10-Year Prison Sentence
The impending prison term might range from 18 months to the statutory maximum of 10 years. After admitting admission to charges of money laundering, CZ resigned as CEO of Binance.
At the same time, Binance entered guilty pleas to several criminal and civil crimes and agreed to pay a hefty $4.3 billion in fines. In addition, CZ admitted guilt to breaking the Bank Secrecy Act and executed a substantial $175 million bond arrangement, according to Reuters. The US authorities contend that rather than doing time in a US prison, he might decide to remain in the United Arab Emirates with his family.
Binance and the DOJ reached an agreement for Binance to leave the US market and name a new CEO after Zhao entered a guilty plea. During this legal tumult, Binance experienced a significant withdrawal of its Bitcoin reserves.
Legal Challenges’ Effect on Binance
Recent information from CryptoQuant revealed that the cryptocurrency exchange’s reserves dropped by 5,000 BTC. In comparison, Coinbase, a rival cryptocurrency exchange, had a rise of almost 12,000 BTC within the same time frame.
After Changpeng Zhao resigned and acknowledged his culpability, Binance experienced withdrawals of more than $1 billion in less than a day. A 25% drop in market liquidity followed this exit, suggesting that market makers were cutting back on their positions in reaction to the legal unrest. On the day of settlement, BNB, Binance’s native coin, also saw an 8% decrease.
