Binance and CZ’s plea deal with US Government revealed in court filing

  • CZ will be required to pay a fine of $50 million as part of the plea deal, which will absolve the CFTC’s charges
  • Binance will have to pay a fine of over $4 billion and accept CZ’s resignation
  • CZ is barred from acting as the CEO for a period of three years

The plea deal between the largest crypto exchange – Binance, its founder – Changpeng Zhao aka CZ, and the US Government has been revealed in a court filing. The filing also revealed that CZ would be the first to make the plea deal, followed by Binance, which will be represented by a corporate officer. The filing was released minutes before the US Department of Justice is set to give a public statement on the matter

Notably, as per CZ’s plea deal, the crypto kingpin will plead guilty “to violating and causing a financial institution to violate” various sections under the Bank Secrecy Act (BSA). In addition, Zhao will also pay a fine of $50 million, which, in turn, would be directed to the Commodity Futures Trading Commission (CFTC). This would absolve the commission’s lawsuit against the exchange and Zhao. The filing also explicitly forbids CZ to,

“Defendant Zhao also agrees that he shall not— either directly or through present or future attorneys, agents, or any other person authorized to speak for him—make any public statement, in litigation or otherwise, contradicting his acceptance of responsibility, the facts described in the Information and Statement of Facts (…)”

Binance to accept Zhao’s resignation

Meanwhile, Binance as a firm will plead guilty to conspiring to “knowingly conduct, control, manage, supervise”  unlicensed money-transmitting business  (MTB) and violating the Bank Secrecy Act (BSA). The firm will also plead guilty to conducting “unlicensed MTB affecting interstate and foreign commerce”. Binance will also take accountability for sanctions violations, with the court filing saying,

“Knowingly and willfully causing the exportation, sale, and supply, directly, and indirectly, from the United States, and by a United States person, wherever located, of services to Iran, without first having obtained the required authorization or license from the U.S. Department of the Treasury’s Office of Foreign Assets Control”

The settlement for these charges includes full cooperation with the US government “in any and all matters relating to the conduct described in the Plea Agreement”. Moreover, the exchange will accept Zhao’s resignation from the CEO position and will bar his involvement in its operations or management. Interestingly, the ban on CZ’s presence will only stay for three years from “the date a monitor is appointed”.

A fine of over $4 billion was also imposed by the US government on the crypto exchange, part of which it will be required to pay within 15 months of sentencing.

Source: Court Filings

Source: Court Filings

The filing read,

“Binance agrees the appropriate sentence is a fine of $1,805,475,575 (“Criminal Fine”), which reflects a 20 percent discount off the bottom of the applicable Sentencing Guidelines fine range for Binance’s partial cooperation and remediation (…) an Order of Forfeiture requiring Binance to pay a money judgment, representing property forfeitable to the United States, in the amount of $2,510,650,588 “

Article updated with extra information.

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