Changpeng “CZ” Zhao, the founder of Binance, remains under legal scrutiny despite soaring rumors on the X platform suggesting his release. Notably, a new report clarifies that while Zhao has been moved from prison to a halfway house, he is not yet free. However, it also suggests that this transition marks the final phase of his sentence, but new legal challenges continue to loom over the prominent crypto figure.
Binance Founder Changpeng Zhao Not Released Yet
The recent rumors circulating on the X platform suggested that the Binance founder has been released from custody. However, a Protos report refutes these claims, clarifying that Changpeng Zhao, also known as CZ, has been moved from his initial prison at FCI Lompoc II in California to the RRM Long Beach Halfway House. Besides, the report also affirmed that he is not yet released.
Notably, this move, as per the report, is part of the standard process for inmates nearing the end of their sentences. In other words, it would offer them a controlled environment in which to reintegrate into society.
Meanwhile, the RRM Long Beach facility is classified as a “residential reentry management” field office. It is also known as a halfway house, and unlike traditional prisons, it allows inmates certain freedoms while still enforcing strict compliance with the rules.
In this setting, CZ is technically out of “prison” but remains under the supervision of the Bureau of Prisons. However, it appears that the development was mistakenly interpreted by many X users as an early release. This has also fueled excitement and discussions among crypto market enthusiasts recently.
In addition, the misunderstanding was further enhanced due to confusion over Zhao’s release date. Initially, it was believed that he would be released at the end of August, based on his sentencing date of April 30. However, since the Binance founder was not imprisoned until May, his release date has been adjusted to September 29. It leaves him around 38 days of his sentence to serve as of the time of the report.
CZ’s Legal Trouble Continues
As the sentencing nears its conclusion for the Binance founder, he faces another significant legal hurdle recently. On August 16, a lawsuit was filed against Changpeng Zhao and Binance by three crypto traders.
The plaintiffs have accused the exchange of enabling the laundering of stolen funds due to its failure to implement robust anti-money laundering (AML) and KYC protocols. The lawsuit alleges that these regulatory lapses allowed criminals to funnel illicit gains through the leading crypto exchange, compromising the security of the user’s funds.
The accusations add to the mounting legal pressures on Changpeng Zhao and Binance, which have already faced scrutiny from various regulatory bodies worldwide. This latest lawsuit could further complicate Binance’s operations, potentially leading to increased regulatory oversight and stricter compliance measures in the future.
However, in a recent interview, CEO Richard Teng said that Binance would spend a hefty amount on regulatory compliance. He suggests that the exchange will further increase its focus on compliance and hire more people to achieve that.
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