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Binance Founder CZ Zhao to Be Released from Prison on September 29, 2024

AuthorEzra kaimenyi
Crypto News Author
Fact Checked by Joshua Downes
Last updated: September 17, 2024
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Binance Founder CZ Set for September 29 Release Amid SEC Legal Battles

Highlights:

  • Binance founder CZ Zhao will be released on September 29 after serving a four-month sentence.
  • Zhao’s imprisonment stems from violating the Bank Secrecy Act and failing to implement a proper KYC program at Binance.
  • Binance continues to face legal challenges, including SEC accusations of violating federal securities laws and promoting questionable digital assets.

Binance founder Changpeng “CZ” Zhao will be released from prison on September 29, 2024, after serving a four-month sentence. The U.S. Federal Bureau of Prisons (BOP) confirmed Zhao’s release, listing the details on its website and identifying him as inmate 88087-510.

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Zhao’s Imprisonment and Fine for KYC Violations at Binance

Zhao reported to a low-security prison, Lompoc II, in California on May 1. After three months, officials transferred him to a halfway house in San Pedro, California, in late August. His release will come 118 days after his sentence began.

Zhao was imprisoned for four months in April after pleading guilty to violating the Bank Secrecy Act. The violation stemmed from his failure to implement an adequate know-your-customer (KYC) program at Binance. In addition to his prison sentence, Zhao agreed to pay a $50 million fine and step down from his role as CEO of Binance.

Binance and Zhao Face Legal Challenges Amid SEC Issues

Zhao’s sentencing followed five months after his guilty plea. Prosecutors initially suggested three years in prison, but Zhao’s legal team sought probation. The four-month sentence was a compromise, much shorter than the prosecutors had recommended but still more than Zhao’s legal team had hoped for.

Richard Teng has since taken over as Binance’s CEO following Zhao’s resignation as part of the plea agreement. The U.S. has criminally charged Binance with violating sanctions and money-transmitting laws, adding to its legal issues. The company has agreed to pay a settlement of $4.3 million to resolve those charges.

While Zhao’s legal issues are nearing an end, Binance’s troubles continue. The U.S. Securities and Exchange Commission (SEC) has recently filed an amended complaint against the cryptocurrency exchange. The SEC accuses Binance of violating federal securities laws and engaging in questionable practices within the cryptocurrency market.

The SEC’s complaint highlights Binance’s role in republishing and amplifying information from issuers and promoters of digital assets. It also claims that Binance promotes the digital assets listed on its platform by sharing information on asset development, trading volumes, and price data.

Zhao’s Release and Binance’s Future Amid Regulatory Scrutiny

Zhao’s involvement with Binance has been instrumental in shaping the company into one of the largest cryptocurrency exchanges in the world. However, his legal troubles and the increasing regulatory scrutiny on Binance have raised questions about the company’s future direction.

With Zhao stepping down and Teng becoming CEO, Binance is focused on addressing its ongoing legal challenges. As Zhao nears release, attention will shift to how the company handles regulatory scrutiny, including the SEC’s accusations. Binance’s response to these issues will be crucial in determining its future in the U.S. and globally.

Zhao’s release on September 29 marks a significant moment in the ongoing saga of Binance. Both Zhao and Binance will likely remain under the watchful eye of regulators as the cryptocurrency industry faces increasing oversight and regulation.

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