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Money Laundering: US court orders Binance founder to surrender all passports

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Binance founder Changpeng Zhao faces tightened bond conditions as United States federal judge orders him to surrender his passport and report domestic travel.

The presiding judge, Justice Richard A. Jones mandated that Zhao notify the court’s Pretrial Services before traveling to the U.S. and prohibited him from leaving the country before sentencing.

Furthermore, Zhao must relinquish his Canadian passport to a designated third-party custodian appointed by his legal team for any travel requiring identification.

All current and expired passports must be surrendered to his lawyers, with new passport acquisition subject to court approval.

In June 2023, the SEC sued Binance and Zhao for deception and unregistered operations. The SEC urged the court to consider admissions from a DOJ settlement.

In the case between the U.S. and Zhao as the defendant, the court ruling of March 11, 2024, is as follows, “Defendant must remain in the continental United States through the imposition of sentence.

“Defendant must notify Pretrial Services before any travel within the continental United States.

“Defendant must surrender his current Canadian passport to a third-party custodian employed and supervised by his counsel of record.

“The third-party custodian must retain control over that Canadian passport and must accompany Defendant on any travel that requires identification documents.

“Defendant must surrender all other current and expired passports and travel documents to his counsel of record, who may return those documents to defendant only with authorization from Pretrial Services or the Court.

“Defendant may not apply for or obtain a new passport or travel document from any country without the Court’s permission.”

In November 2023, Zhao pleaded guilty to criminal charges and violating the Bank Secrecy Act. He subsequently agreed to pay a fine and stepped down as the company’s CEO.

Zhao was released on bail of $175 million.

This was part of a $4.3 billion settlement with the Department of Justice, according to court documents.

The plea arrangement with the government followed years of investigation into the dealings of the world’s largest cryptocurrency exchange.

In December, Judge Jones barred Zhao from leaving the U.S. pending a verdict in his case.

His sentencing date initially fixed for March has been postponed to April 30 and the businessman may face up to 18 months in prison after pleading guilty to violating anti-money laundering laws in the U.S.

In February, the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said $26 billion passed through Binance Nigeria from unknown sources and users in one year.

The allegation came amid the free fall of the naira and clampdown on Bureaux de Change by President Bola Tinubu’s administration in an attempt to steady the rapid decline.

Cardoso said the government was “concerned that certain practices go on that indicate illicit flows going through a number of these entities, and suspicious flows at best”.

The National Assembly later agreed to issue warrants of arrest against Binance executives in Nigeria.

This decision came after a resolution was passed to that effect by the House of Representatives Committee on Financial Crimes during a hearing on a petition brought against the crypto firm.

 

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