Binance's Former CEO Faces Sentencing: US DOJ Addresses Flight Risk Concerns

<p><span>Binance's Former CEO, Changpeng Zhao (CZ), is
embroiled in a contentious debate with the US Department of Justice (DOJ)
following his guilty plea for breaking anti-money laundering laws in the US.</span></p>
<p><span>Although the DOJ is not advocating immediate
incarceration, it has opposed CZ's departure from the United States, <em>Coindesk</em>
reported. The Justice Department has cited him as a "flight risk that could be
managed." This stance arises despite CZ's voluntary appearance in court, where he argued that his presence is proof of non-flight tendencies.</span></p>
<p><span>CZ's counsel has highlighted his voluntary
self-surrender, intent to resolve the case, and a proposal for a significant bail package. However, US Attorneys contend that the severity of potential
sentencing could force&nbsp;him to flee back to the UAE, his primary
citizenship, which lacks an extradition treaty with the US.</span></p>
<h1><span>Changpeng Zhao Staring at a Possible 10-Year Prison
Term</span></h1>
<p>The looming prison sentence&nbsp;is potentially between 18
months to a statutory maximum of 10 years. Following his guilty plea for money
laundering violations, <a href="https://www.financemagnates.com/executives/binance-ceo-changpeng-zhao-to-step-down-in-4b-doj-settlement-report/" target="_blank" rel="follow">CZ stepped down</a> as Binance's CEO. </p>
<p><span>Simultaneously, Binance pleaded guilty to multiple
criminal and civil charges, agreeing to pay a substantial $4.3 billion in
penalties. Besides that, CZ signed a hefty bond agreement worth $175 million
after pleading guilty to violating the Bank Secrecy Act, <em>Reuters</em> reported. The
US prosecutors argue that he might opt to stay in the UAE with his family
instead of facing prison time in the US.</span></p>
<p>Following Zhao's guilty plea, Binance struck a deal
with the DOJ to exit the US market and to appoint a new CEO. In the
midst of this legal turmoil, Binance witnessed a <a href="https://www.financemagnates.com/cryptocurrency/binance-shrinks-coinbase-expands-in-shifting-bitcoin-reserves/" target="_blank" rel="follow">substantial outflow of its Bitcoin reserves</a>.</p>
<h2><span>Impact of Legal Challenges on Binance </span></h2>
<p><span>Recent data from CryptoQuant unveiled that the crypto
<a href="https://www.financemagnates.com//">exchange</a> witnessed a decrease of 5,000 BTC in reserves. This is in contrast to
rival crypto exchange, Coinbase, which recorded an increase of approximately
12,000 BTC in the same period. </span></p>
<p><span>Following Changpeng Zhao's resignation and admission
of guilt, Binance faced outflows exceeding $1 billion within a day. This
departure was accompanied by a decrease of 25% in market <a href="https://www.financemagnates.com//">liquidity</a>, indicating
the impact of market makers reducing their positions in response to the legal
turmoil.&nbsp;</span>Additionally, Binance's native token, BNB, experienced a decline of 8%
on <a href="https://www.financemagnates.com/cryptocurrency/binance-will-exit-the-us-paying-over-76-billion-in-settlements/" target="_blank" rel="follow">the settlement</a> day.&nbsp;</p>
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This article was written by Jared Kirui at www.financemagnates.com.