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CZ an ‘unacceptable risk of flight,’ should stay in US: DOJ

November 23, 2023 Coin Telegraph

Binance

U.S. prosecutors are pushing for CZ to stay in the country, saying they “would not be able to secure his return” if he’s allowed back to Dubai.

United States government prosecutors are trying to stop former Binance boss Changpeng “CZ” Zhao from leaving the country, expressing concern about his potential flight risk.

In a Nov. 22 filing to a Seattle federal court, U.S. prosecutors requested a review and overturn of a judge’s decision that would allow Zhao to return to his home in the United Arab Emirates (UAE) on a $175 million bond under the condition he returns to the U.S. two weeks before his February 2024 sentencing.

In a proposed order, U.S. prosecutors wrote Zhao “presents an unacceptable risk of flight and nonappearance if he is allowed to leave the United States pending sentencing.”

In an accompanying letter, prosecutors said if Zhao decided not to come back to the U.S., then the government "would not be able to secure his return."

In its argument, the government pointed to Zhao’s ties and favored status in the UAE along with the country’s lack of an extradition treaty with the U.S. as reasons to block him from leaving the country.

“He has three young children and a partner in the UAE; once in the UAE and faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family.”

Prosecutors said Zhao could live on his wealth in the UAE indefinitely as a vast majority of it is held overseas away from U.S. jurisdiction.

*Excerpt of the motion to review Zhao’s bond conditions. Source: PACER*

The government also argued Zhao’s bond was inadequate as a majority of the $175 million used to secure his release was outside the reach of the U.S.

Zhao recently confessed to failing to maintain an effective Anti-Money Laundering program at Binance and part of his plea agreement saw him step down as CEO of the exchange and pay a $50 million fine.

Industry experts and observers have argued that Binance’s settlement with the Justice Department is a positive outcome for the crypto industry, further legitimizing it in the U.S.

Additionally, crypto markets have already rebounded from the bad news regarding one of the industry’s most enigmatic and influential players.

Total market capitalization has already returned to pre-Binance news levels, hitting $1.48 trillion during the Thursday morning Asian trading session.

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US Justice Dept. is reportedly ready to settle with Binance for $4 billion

November 20, 2023 Coin Telegraph

Binance

According to a report, an agreement to settle Justice Department charges against the company may be settled by the end of the month.

The US Justice Department is negotiating with Binance in an attempt to resolve its investigation into the company, according to a November 20 report from Bloomberg citing people familiar with the discussions. The agreement would require Binance to pay $4 billion in fines. In return, the company would be allowed to keep operating while complying with US laws. According to the report, the announcement of an agreement “could come as soon as the end of the month.”

*US SEEKS MORE THAN $4 BILLION FROM BINANCE TO END CRIMINAL CASE

Source: Bloomberg | Coins: BNB
— db (@tier10k) November 20, 2023

As part of the agreement, Binance CEO Changpeng Zhao (also known as “CZ”) would face the possibility of criminal charges as part of an investigation into “alleged money laundering, bank fraud and sanctions violations.” The report states that CZ is currently living in the United Arab Emirates (UAE), which does not have an extradition treaty with the US. This seems to imply that charges filed in the US would be unlikely to result in CZ’s arrest.

The report claims that Binance is seeking a “deferred prosecution agreement.” Under the terms of this deal, the Justice Department would make a criminal complaint, but would not actually prosecute the company so long as it complies with three conditions.

First, it would need to pay $4 billion in penalties. Second, Binance would need to publish a detailed document admitting areas where it didn’t comply with the law. Third, a monitoring process would be set up to ensure Binance complies with laws and regulations in the future, and the company would need to comply with this process.

Cointelegraph reached out to Binance for comment on the report but did not receive a response by the time of publication. In 2022, CZ sued a Bloomberg subsidiary for allegedly publishing false stories claiming he was running a “Ponzi Scheme.”

US Justice Department charges two men in Mt. Gox Hack

June 9, 2023 Coin Telegraph

Aleksandr Verner

The Justice Department claims Alexey Bilyuchenko and Aleksandr Verner took control of a Mt. Gox server and stole 647,000 Bitcoin from the exchange.

The United States Justice Department has unsealed charges against two men it says are responsible for the $400 million hack of former Bitcoin (BTC) exchange Mt. Gox. According to the announcement, 43-year-old Alexey Bilyuchenko and 29 year old Aleksandr Verner allegedly conspired to launder 647,000 BTC they stole from Mt. Gox through a hack of the exchange’s servers.

Bilyuchenko is also charged with conspiring to operate the BTC-e exchange, which was shut down in 2017 due to money laundering allegations.

The DOJ unsealed charges related to the 2011 hack of the cryptocurrency exchange Mt. Gox and the operation of the illicit cryptocurrency exchange BTC-e.

Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, both Russian nationals, are charged with conspiring to launder approximately…
— db (@tier10k) June 9, 2023

Prosecutors claim the hack occurred over a period of more than a year, from September 2011 until at least May 2014. During this time, the two men allegedly gained control of a Mt. Gox server located in Japan. They then proceeded to periodically make transfers of BTC from Mt. Gox to themselves, until the “vast majority” of customers’ BTC had been drained from the exchange.

After gaining possession of these Bitcoin, the men attempted to sell them through another exchange they controlled. To facilitate these sales, the two men entered into an allegedly fraudulent contract with a Bitcoin brokerage firm located in New York. The brokerage firm purchased the stolen BTC from the hackers by sending wire transfers to various offshore bank accounts. The Bitcoins themselves were left in the possession of the hackers’ exchange, but were credited to the brokerage firm’s account within it.

The announcement does not say whether BTC-e was the exchange used in the fraudulent deal, instead referring to the exchange used as “Exchange-1.” Prosecutors claim that the pair received approximately $6.6 million from the deal.

Mt. Gox was one of the first major cryptocurrency exchanges. It filed for bankruptcy in March 2014 after claiming the hack pushed it into insolvency.

BTC-e operated from 2011 to 2017. In 2017, the FBI liquidated some of its cryptocurrency, claiming that the funds were earned through money laundering. BTC-e’s founder, Alexander Vinnik, is currently serving prison time for his connection with the exchange. In May, Vinnik's attorney attempted to get him released as part of a prisoner swap with the Russian Federation.

justice department