Last November, the world’s biggest cryptocurrency exchange, Binance, reached a resolution with U.S. authorities, which would see it remain in business by paying $4.3 billion in penalties for failing to comply with money transmission laws and numerous other infringements. Meanwhile, CZ has had to step down as CEO and also plead guilty to various charges.
The U.S. prosecutors asked a federal judge to accept the conditions of the plea deal last Friday, justifying the penalty to the court as appropriate taking into account the severity of the crime.
"given the nature and seriousness of Binance's misconduct - it was intentional and led by senior executives, with hundreds of millions of dollars of collateral consequences."
The prosecutors also reportedly highlighted the fact that Binance's failure to properly register or implement an effective anti-money laundering (AML) policy exposed the exchange and its customers (and potentially the U.S. financial system) to malicious expoloits.
In addition to the penalty, the plea deal also requires the monitoring of company activities for up to five years, as the exchange has admitted that it allowed transactions involving terrorist groups on its platform. This part of the deal could be beneficial for the U.S. authorities as they will get access to information from one of the largest crypto platforms.
CZ could still face up to 10 years in jail, although it is expected that his sentence will be no more than 18 months. Following prosecution claims that the ex-CEO was a severe flight risk, the judge ruled that Zhao must remain in the United States until his sentencing, even though CZ offered his equity in Binance.US, worth around $4.5 billion, as collateral.
Unfortunately for Zhao, sentencing was recently postponed to April 30, with some believing that prosecutors might need more time because they are seeking a harsher sentence.
The legal issues never seem to end for Binance. While the exchange settled with the DoJ and CFTC, the SEC is still pursuing Binance.US, although the exchange is trying to have the lawsuit dismissed, claiming SEC overreach. On top of this, U.S. authorities are investigating a possible vulnerability in the Trust Wallet iOS app. Despite a Binance spokesperson saying that Trust Wallet is a separate legal entity that is not part of the group, many still associate the wallet with the exchange.
