CZ Released on $175M Bail, Binance Pays Penalties of $4.3B

Changpeng “CZ” Zhao, the founder and now ex-CEO of Binance, has been released on a bond of $175 million after pleading guilty to violations of the Bank Secrecy Act, CoinDesk reported. According to Attorney General Merrick Garland, no corporate defendant in a criminal matter has ever paid a penalty of this magnitude.

Federal regulators allege Binance let US customers sign up under his guidance without implementing proper know-your-customer or anti-money laundering procedures.

Assisted by anonymous guarantors

CZ will post $15 million held by Davis Wright Tremaine in a trust account and has agreed to lose this money if he violates the terms of his release. He has found anonymous guarantors who pledged $250,000, resp. $100,000. He awaits sentencing in February.

He can leave the country

His terms of release include standard provisions, such as a bar on tampering with victims or witnesses and on taking non-prescribed drugs. He may leave the US, but has to return two weeks before his trial. Earlier on Tuesday, federal prosecutors shared plans to appeal that provision to a more senior court.

Zhao has agreed to stay in Seattle until next Monday, which will let his legal team negotiate that issue with DOJ lawyers.

He may not appeal any sentence

Zhao may not appeal any sentence in the next year and a half because he pled guilty pursuant to an agreement. A court filing cited by CoinDesk shows the DOJ and Zhao agreed to a $50 million fine, but there was no mention of doing time.

He also resigned as CEO of Binance

As part of Binance’s settlement with the DOJ, Zhao has resigned as CEO of the exchange he founded in 2017. Binance will pay penalties of $4.3 billion to various watchdogs and let agencies oversee its operations in the next five years. The exchange also settled charges with the US CFTC, OFAC, and FinCEN – the country’s federal commodities regulator, sanctions regulator, and money laundering watchdog.