Binance founder CZ to stay in US until February sentencing
Changpeng ‘CZ’ Zhao, the founder and former CEO of Binance, has been ordered by U.S. District Judge Richard Jones to remain in the United States pending further court review.
The decision comes after prosecutors voiced concerns that Zhao, who recently pleaded guilty to charges related to violations of the Bank Secrecy Act, poses a flight risk due to his substantial wealth and the fact that the UAE, where he resides, does not have an extradition treaty with the U.S.
Zhao’s guilty plea also included an agreement to pay a $50 million fine. In a related case, Binance, the crypto exchange Zhao founded, agreed to pay a $4.3 billion fine, one of the largest corporate settlements in U.S. history, addressing allegations of money laundering, fraud, and sanctions violations.
The former Binance chief stepped down from his role at the exchange after his guilty plea and is currently on a $175 million bond as part of his bail agreement. With a potential maximum prison sentence of 18 months as per federal guidelines, Zhao has committed not to appeal any sentence up to that duration.
The Justice Department indicated that it would decide on the specific recommendation for Zhao’s jail time closer to the February sentencing date. In the meantime, Zhao acknowledged his mistakes and the necessity of taking responsibility for his actions. The court’s review will determine whether he will be permitted to return to the UAE before his sentencing or be required to stay in the U.S. until then.
Binance responded to the settlement by stating its commitment to making the company “safer and even more secure.” Zhao’s legal representation has not provided immediate comments on these latest developments. But they requested the court last week to dismiss the prosecutors’ motion to retain him in the U.S. until his February sentencing.
Zhao’s defense argues that he does not pose a flight risk, as previously determined by Judge Brian Tsuchida, and that the government has not provided adequate grounds for an appeal to overturn this finding. They elaborated on CZ’s visibility as a global public figure and his track record, including a lack of criminal history and the non-violent nature of his offenses, to argue against the necessity of him staying in the U.S. before sentencing.
The defense also suggests that since Binance founder could serve a portion of his sentence in a non-jail setting, there is little motivation for him to flee and face additional charges. They point out that his family ties and residence in the UAE should not inherently mark him as a flight risk, especially given his willingness to face the legal consequences and return to his family post-sentencing.
Refuting the prosecutors’ concern over Zhao’s wealth and the absence of a U.S.-UAE extradition treaty, the defense notes his voluntary return to the U.S. to face charges. They mentioned his bail conditions, including a $175 million personal bond backed by guarantor pledges, as evidence of his commitment to comply with U.S. judicial proceedings.