Former SEC Official Says Changpeng Zhao is Going to Jail, Binance and CZ’s Guilty Plea “Was Expected”
Changpeng Zhao “CZ,” CEO of Binance, the largest global cryptocurrency exchange, has pleaded guilty to criminal charges brought by the U.S. Department of Justice. According to John Reed Stark, a former chief at the SEC’s Office of Internet Enforcement, this significant legal twist was anticipated.
John Stark: “A Predictable Outcome”
Stark commented that CZ’s resignation and subsequent guilty plea were not surprising. The high-profile CEO reportedly appeared in a Seattle federal court, where he entered a guilty plea and agreed to pay a hefty fine of $50 million. In addition, Binance, under CZ’s ownership, will also plead guilty to a criminal charge, with fines totaling an astonishing $4.3 billion. This includes settlements for civil allegations made by various regulators.
The nature and specifics of these guilty pleas remain unclear, awaiting further details from the DoJ press conference, which is expected to arrive any moment now. The indictment against Binance involves three counts related to significant violations of critical money laundering statutes, including violating the International Emergency Economic Powers Act (IEEPA) and operating an unlicensed money transmitter business.
CZ Will Go to Jail?
Violating sanctions under IEEPA carries severe civil and criminal implications, with penalties including hefty fines and prison sentences. By this, Stark confidently says that he believes CZ is going to jail.
In his own words:-
“Based on the allegations in the Binance indictment (which is all I have read so far), IMHO, CZ is looking at definite prison time.”
The cryptocurrency community is now on edge, awaiting an official statement from CZ. His guilty plea and departure from Binance mark a pivotal moment in the crypto industry, highlighting the ongoing tension between cryptocurrency enterprises and regulatory authorities in the United States.