Changpeng “CZ” Zhao, who is anticipated to be released from U.S. custody in a few weeks, may face a permanent prohibition from overseeing or managing the cryptocurrency exchange Binance as part of his plea agreement with federal prosecutors.
A report from Axios on September 5 revealed that Binance CEO Richard Teng stated CZ has been handed a lifetime ban from managing or operating the exchange, contrary to earlier reports which suggested the restriction would last only three years. While the exchange acknowledged that Zhao is prohibited from holding any managerial position, this appears to be more of an internal decision rather than a stipulation of his or Binance’s official plea agreements.
Zhao’s Plea Agreement In November 2023, U.S. authorities reached a $4.3 billion settlement with Binance, during which Zhao admitted 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 release expected on September 29.
As part of his plea agreement, CZ resigned from his role as Binance’s CEO, with Richard Teng taking over the position. At the time, Zhao stated he would “remain available to the team for consultation when needed,” but was stepping down to allow Binance to “stand on its own and grow.”
The plea agreement, filed on November 21, outlined that Binance agreed CZ would be barred from “any present or future involvement in the operation or management” of the exchange. However, this prohibition was listed as a “consideration” by prosecutors, seen as part of Binance’s “remedial measures,” rather than a mandatory legal stipulation.
Additionally, the settlement required Zhao to personally pay $50 million to U.S. regulators. Despite the agreement, Binance’s legal battle with the U.S. Securities and Exchange Commission (SEC) was still ongoing as of September 2024, even amid recent Supreme Court rulings that may restrict the SEC’s authority in cryptocurrency-related enforcement cases.
