Binance co-founder Changpeng Zhao, aka “CZ” in the crypto world, was released from prison on Friday, September 27, following a four-month sentence for failing to establish an adequate anti-money laundering (AML) program. Zhao’s release, which comes two days ahead of his official September 29 release date, has raised eyebrows regarding his early release.
Why Was CZ Released Early?
While the early release seems peculiar, it’s not as it adheres to the prison policies. CZ’s release today adheres to a policy allowing inmates to be freed on the last weekday if their release date falls on a weekend or holiday. For context, Zhao, the co-founder of the world’s largest crypto exchange, has faced mounting legal issues since 2021.
While his prison term was relatively short, the fallout from his conviction has been significant. Authorities have placed strict limitations on his future involvement with Binance. They have barred him from taking any executive or strategic role within the company he helped launch in 2017.
Zhao’s legal challenges began as the crypto exchange rapidly expanded its global operations. Regulators worldwide started to take notice, questioning the exchange’s compliance with financial regulations. Moreover, Binance was accused of operating without the necessary licenses and running an unlicensed securities exchange.
Additionally, the company faced accusations of inadequate AML measures and Know Your Customer (KYC) protocols. It led to concerns that the platform may have been used to facilitate illicit trading activities. Thereafter, the U.S. Commodity Futures Trading Commission (CFTC) escalated the regulatory scrutiny by filing a lawsuit against the exchange in March 2023.
The CFTC claimed the platform had allowed U.S. customers to trade crypto derivatives without proper registration, a violation of federal laws. The lawsuit also highlighted Binance’s weak AML controls. It accused the platform of failing to prevent potentially illegal transactions under CZ’s leadership.
What’s Next for CZ and Binance?
The U.S. Department of Justice (DOJ) soon followed suit with additional charges against Binance and Zhao. The suit included accusations of operating an unregistered exchange and engaging in market manipulation. By 2024, Zhao was convicted, resulting in substantial fines for both him and Binance, amounting to hundreds of millions of dollars.
His conviction also included stringent restrictions on his future activities in the crypto domain. Despite his early release from prison, Zhao’s professional future remains uncertain. He is now prohibited from holding any leadership or operational role within Binance and is barred from engaging in crypto trading or exchange services for a predetermined period.
A spokesperson for Binance stated, “We are delighted that CZ will be home with his family. While he is no longer managing or operating Binance, we are excited to see what he does next,” according to a Decrypt report.
“Since last year, Binance has continued to thrive under the leadership of our current team, surpassing 230 million users globally, and we are proud to continue leading the industry responsibly,” the spokesperson added.
Also Read: World’s Richest Inmate & Binance Founder CZ To Leave Prison Today With His $60 Billion Fortune
Source: https://www.cryptonewsz.com/binances-cz-walks-free-early-whats-the-reason/