Changpeng Zhao, better known as CZ, the mastermind behind Binance, is facing a complicated situation. He pleaded guilty to failing to maintain an effective anti-money laundering program at Binance, the world’s largest cryptocurrency exchange, on November 21.
As part of his guilty plea, he agreed to resign as CEO of Binance and pay a $50 million fine.
Binance also pleaded guilty to conspiring to conduct an unlicensed money transmission business, conducting such business and violating the International Emergency Economic Powers Act. The crypto exchange agreed to pay $4.3 billion in fines and restitution as part of its plea deal.
CZ’s sentencing on the money laundering charge has been postponed until April 30. In the meantime, he is free on a not-inconsiderable $175 million bail in the US. This postponement fuels uncertainty not only for CZ but also for Binance.
How will this affect its operations? These unanswered questions may have some in the crypto community worried about their assets on the exchange platform.
However, this extra time could also allow CZ to negotiate a better deal or present additional evidence that would influence his sentencing.
CZ’s attorney, William Burck, has not commented on the continuance, and an explanation from the Justice Department is awaited. The guidelines suggest a maximum penalty of 18 months in prison, although prosecutors reportedly could seek a more severe punishment.
With CZ out on bail, he has to abide by certain restrictions, especially when it comes to travel.
This definitely puts a damper on his ability to handle Binance’s affairs. Binance’s reputation is also in line with CZ admitting guilt and paying hefty fines; it’s a tough blow to the company’s image.