Former Binance CEO Changpeng Zhao (CZ) has been transferred from his prison to the RRM Long Beach halfway house in California. However, X-users and numerous crypto companies have mistakenly interpreted the news as an early release for Zhao.
Zhao to be released in September
CZ was initially held at FCI Lompoc II Prison, also in California. Zhao, who began serving his sentence in late May for violating U.S. anti-money laundering laws, is scheduled to be released on September 29, according to the U.S. Bureau of Prisons. He stepped down as Binance CEO, and as part of the legal resolution, Binance was also fined $4.3 billion, with Zhao personally agreeing to pay a $50 million fine.
While he is now out of prison. But he is definitely still under the care of the U.S. government and is not free to move or do as he pleases. RRM Long Beach is classified as a residential reentry management (RRM) field office, often referred to as a halfway house. It is a residential program that prepares inmates nearing the end of their sentences for their reentry into society.
CZ faces new lawsuit
While that sentence may be nearly over, he now has another lawsuit to worry about. CZ and Binance have been accused by three crypto traders of losing their money due to relaxed money laundering regulations. The lawsuit, filed on August 16, alleges that Binance’s failure to implement and enforce effective anti-money laundering (AML) and know-your-customer (KYC) regulations allowed criminals to move stolen funds to Binance so they could be covertly laundered.
Zhao, one of the richest figures in crypto, has also been banned from managing Binance for three years following a settlement with the US government. The entrepreneur wants to use that period to focus on other ventures, such as education and passive investing.
Binance's Commitment to Regulatory Compliance
This lawsuit could further complicate Binance’s operations, leading to increased regulatory scrutiny and stricter compliance measures in the future. However, in a recent interview, CEO Richard Teng said that Binance would spend a significant amount of money on regulatory compliance. He also suggested that the exchange will focus more on compliance and plans to hire more people to achieve that.
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