Changpeng Zhao, the co-founder of Binance, is scheduled to be released from US custody on Sept. 29, as reported by the US Federal Bureau of Prisons website. Zhao has been serving a four-month sentence and was recently moved to the Long Beach Residential Reentry Management (RRM) facility in central California.
RRMs act as local federal prison liaisons, providing support to inmates nearing release by collaborating with federal courts, the US Marshals Service, and local corrections.
Zhao’s legal troubles began in November when he and Binance admitted to violating US federal laws. The charges included Zhao’s failure to establish an effective anti-money laundering program, as mandated by the Bank Secrecy Act. Additionally, it was alleged that Binance had facilitated transactions associated with illicit activities, including those involving US citizens and individuals in sanctioned regions like Iran.
As part of the settlement, Binance was directed to pay $4.3 billion in fines, while Zhao agreed to a personal payment of $50 million. Zhao also stepped down as Binance’s CEO but still holds an estimated 90% ownership in the company.
While Zhao’s legal issues are coming to a close, Binance is still facing legal challenges. The US Securities and Exchange Commission (SEC) recently filed an amended complaint against the exchange, reiterating its claim that Binance violated federal securities laws.
The SEC alleged that Binance plays a significant role in the cryptocurrency market by republishing and amplifying information from issuers and promoters. The filing also accused Binance of promoting digital assets it lists and trades by sharing information on asset development, trading volumes, and price details.
Furthermore, the SEC maintained its position that Binance’s token, BNB, was sold as a security. The regulator highlighted the expectation among customers, employees, and investors that BNB would appreciate in value due to efforts by issuers and promoters.
Despite a previous court ruling dismissing charges related to the secondary sale of BNB by third parties, the SEC continues to pursue legal action against Binance.
As Zhao prepares to be released from custody, the future of Binance remains uncertain as it navigates through ongoing legal battles with regulatory authorities.