May 29, 2024
Binance Founder CZ Restricted to U.S. Until February Sentencing
Policy & Regulation

Binance Founder CZ Restricted to U.S. Until February Sentencing

Changpeng “CZ” Zhao, the founder of Binance, has been directed to remain in the United States until his sentencing in February, as a federal judge expressed concerns about the potential flight risk if the former exchange CEO returns to the United Arab Emirates (UAE).

On December 7, Seattle District Court Judge Richard Jones issued the order, stating that Zhao must stay in the U.S. until his sentencing date of February 23, 2024. Zhao had pleaded guilty to money laundering on November 21 and faces a possible 18-month prison sentence. He has agreed not to appeal any sentence up to that length.

In his ruling, Judge Jones noted the significant wealth and property Zhao holds abroad, emphasizing the lack of ties to the United States. The judge concurred with federal prosecutors who argued that securing Zhao’s return would be challenging given his substantial overseas assets.

“The defendant has enormous wealth and property abroad, and no ties to the United States… The Court finds that the defendant has not established by clear and convincing evidence that he is not likely to flee if he returns to the UAE,” Judge Jones stated.

The decision follows the acceptance of Zhao’s guilty plea on December 6, submitted almost two weeks prior, without a prior ruling on a federal prosecutor’s motion to prevent his return to Dubai, where he currently resides.

Zhao is presently under a $175 million bond, a significant portion of which, Judge Jones noted, seems to be comprised of assets beyond the government’s reach. Despite the order, the bond conditions still permit Zhao to travel freely within the U.S. and allow his family to visit, conditions that the judge deemed as “hardly burdensome impositions on the defendant’s freedom.”

In November, both Binance and Zhao settled with U.S. regulators for $4.3 billion, acknowledging their involvement in operating an unlicensed money-transmitting business and violating the Bank Secrecy Act. As part of the settlement, Zhao stepped down as the CEO of Binance.

The recent legal developments underscore the challenges faced by high-profile figures in the cryptocurrency industry amid increasing regulatory scrutiny and enforcement actions.

Image: Wallpapers.com

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