Court unseals indictments against Binance and CZ, detailing expected guilty pleas
A federal court released indictments against Binance and CEO Changpeng “CZ” Zhao filed under seal on Nov. 14, in which the U.S. government said it expected the cryptocurrency exchange and CZ plead guilty.
In documents filed Nov. 14 in the U.S. District Court for the Western District of Washington in Seattle, the U.S. government said it requested to file the indictments against Binance and CZ under seal because any plea agreement potential with the exchange and CEO as well as regulatory settlements were “It is likely to have a major effect on the company, its customers and the global cryptocurrency markets.” Authorities charged CZ with one count of failure to maintain an effective anti-money laundering program at Binance, in violation of the Bank Secrecy Act.
“On the day of the plea hearings, the Government expects that criminal resolutions with Defendant Zhao and Defendant Binance will be announced simultaneously with important civil resolutions by the U.S. Department of the Treasury’s Office of Financial Control. Foreign Assets Control (OFAC), the U.S. Department of Foreign Assets Control. the Treasury Financial Crimes Enforcement Network (FinCEN) and the Commodity Futures Trading Commission (CFTC),” the November 14 filing said, adding:
“Although Binance is not a publicly traded company, Binance is the largest cryptocurrency exchange in the world and news related to the criminal and civil liability of Zhao and Binance is likely to have a significant effect on trading of various cryptocurrencies.”
“Cryptocurrency markets are volatile and subject to significant fluctuations based on external events,” the filing said. “Here, given the status of Binance and Zhao among participants in cryptocurrency and related markets, even the mere filing of a federal criminal case against either would itself have a significant impact on the market .”
The government compared the potential price volatility of Binance Coin (BNB) to that of the FTX token (FTT) when the crypto exchange collapsed in November 2022, and former CEO Sam “SBF” Bankman-Fried was charged with federal fraud. SBF was subsequently convicted on seven counts and awaits sentencing in March 2024.
According to court records, attorneys representing Binance and CZ appeared in court for separate hearings scheduled for the morning of November 21 to discuss pleas and possible detention. CZ’s lawyers filed sealed motions regarding the Binance CEO’s parole pending sentencing in the case, but the content was not available at the time of publication.
Related: Binance’s $3.9B USDT Move Draws Community Attention Amid DOJ Settlement Claims
A settlement for numerous criminal and civil cases against Binance and CZ in the United States is expected to be announced at 8:00 p.m. UTC on November 21 as part of a joint statement from the Department of Justice, the CFTC, and the Department of Justice. Treasury. According to multiple reports, CZ has agreed to plead guilty and Binance will pay over $4 billion as part of the settlement.
At the time of publication, it is unclear whether any part of the announcement will relate to Binance’s ongoing civil case with the United States Securities and Exchange Commission (SEC). In June, the regulator filed 13 charges against the crypto exchange, Binance.US and CZ for securities law violations.
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