Changpeng “CZ” Zhao, who is expected to be released by United States prison authorities in a few weeks, could potentially be permanently prohibited from operating or managing the cryptocurrency exchange Binance as part of his plea deal with prosecutors.
According to a report by Axios on September 5, Binance CEO Richard Teng stated that CZ has received a lifetime ban from managing or operating the exchange, contrary to previous reports that suggested a three-year ban. The crypto exchange indicated that the former CEO was banned from holding a management position at the firm, although it was not explicitly specified in either Zhao’s or Binance’s plea agreements.
CZ’s plea deal
In November 2023, US authorities reached a $4.3 billion settlement with Binance, where Zhao pleaded guilty to a felony charge related to violations of the Bank Secrecy Act. In April, a judge sentenced him to four months in prison, with his expected release date on September 29.
As part of the plea deal, CZ stepped down as CEO of Binance and was succeeded by Teng. Zhao stated at the time that he would be available for consultation with the team as needed, but he was stepping down as CEO to allow Binance to operate independently.
According to Binance’s plea agreement filed on November 21, the crypto firm agreed that CZ would be prohibited from any involvement in operating or managing the exchange in the future. However, this action was listed as a “consideration” for prosecutors as part of the remedial measures taken by Binance, and not a legal requirement.
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Cointelegraph reached out to Binance for comment but did not receive a response at the time of publication. Zhao was not available for comment.
The settlement required Zhao to personally pay $50 million to US regulators. However, as of September 2024, Binance’s case with the US Securities and Exchange Commission was still ongoing, despite recent Supreme Court rulings that could limit the SEC’s authority in cryptocurrency enforcement cases.
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