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Binance Founder CZ Faces Uncertain Fate as Sentencing Postponed

Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange by trading volume, will have to wait two more months to learn his fate in a US court. Zhao, also known as “CZ,” is facing charges of failing to maintain an effective anti-money laundering (AML) program within his company, which allegedly facilitated illicit transactions worth billions of dollars.

Zhao was arrested in Seattle in December 2023 and pleaded guilty to one count of violating the Bank Secrecy Act, a federal law that requires financial institutions to report suspicious activities and implement AML policies. He was released on a $10 million bond and agreed to cooperate with the authorities. He also surrendered his passports and agreed not to leave the US without permission.

Zhao was scheduled to be sentenced on Feb. 23, 2024, but a notice from the Seattle federal court announced that the sentencing hearing has been postponed to Apr. 30, 2024, without giving any reason for the delay. This has raised questions and speculations among the cryptocurrency community, as Zhao faces a maximum sentence of 18 months in prison, according to the federal sentencing guidelines. However, some reports suggest that the prosecutors may seek a longer sentence, citing the severity and scale of Zhao’s offenses.

Zhao’s legal troubles are not limited to the US. He is also wanted by authorities in several countries, including China, Japan, and the UK, for allegedly operating Binance without proper licenses and enabling money laundering, tax evasion, and fraud. Binance has been banned or restricted in several jurisdictions, and has faced investigations and lawsuits from regulators and customers.

Zhao’s personal life has also been affected by his legal woes. He has been denied permission to visit his family in the UAE, where he has a residence and where his children live. He has offered to post his equity in Binance, estimated to be worth over $1 billion, as security for his travel, but the court has rejected his requests, citing flight risk and public safety concerns.

Zhao’s sentencing postponement comes at a time when the cryptocurrency industry is facing increased scrutiny and regulation from governments and agencies around the world. The US Department of Justice, the Securities and Exchange Commission, the Internal Revenue Service, and the Financial Crimes Enforcement Network have all ramped up their efforts to crack down on crypto-related crimes and enforce compliance with existing laws. Zhao’s case is seen as a test case for the future of the crypto sector, as it could set a precedent for how other crypto exchanges and platforms are treated by the law.

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